The difference between the expected price of a trade and the actual execution price. In AMMs, larger trades relative to pool size cause more slippage because each unit bought moves the price further along the bonding curve. Slippage protection (minimum output amount) prevents front-running attacks.
AMM
Slippage
Related terms in AMM
Automated Market Maker (AMM)
A smart contract that holds token reserves and enables trading without an order book. Prices are determined al...
Constant Product Formula
The pricing invariant x * y = k, where x and y are token reserves and k is a constant. When one token is bough...
Liquidity Pool
A smart contract holding paired token reserves that enables trading. Liquidity providers deposit equal value o...
Liquidity Provider (LP)
A user who deposits tokens into a liquidity pool to facilitate trading, earning a share of trading fees in ret...