Slippage refers to the difference between the actual transaction execution price and the expected price. Slippage usually occurs when market liquidity is insufficient or trading volume is large, resulting in orders not being fully filled at the expected price, resulting in price deviations.
Slippage can occur due to the following factors:
Insufficient liquidity: When there are fewer buy and sell orders in the market, there may be large gaps in the exchange's order book, and the price difference between the buy and sell orders is large, resulting in a large deviation between the transaction execution price and the expected price. . To put it simply, there are few people buying this token. Some people only sell it at 0.5, but the price set by the buyers is 0.4. There is a large gap between them, so the order cannot be completed.
Large trading volume: When trading volume is large, the market depth may not be able to meet all order demands, causing some orders to be filled at a higher or lower price, resulting in slippage.
Market volatility: Prices in the cryptocurrency market fluctuate greatly, especially in times of high volatility. Order execution prices may experience slippage due to changes in market prices.
Slippage is usually not discovered until after a trade has been executed because it is the difference between the actual trade price and the expected price. Slippage may have an impact on trading results, especially for trading strategies that require a high degree of execution precision or where trading volumes are large.
Many people want to buy Tugo when the fluctuations are large, but they can't buy it anyway. They can increase the slippage. For example, if you set a slippage of 5% on okx to buy Tugo, it means that when executing the transaction, you Be willing to accept price fluctuations of up to 5%. This slippage is calculated relative to the transaction price you set, or the market price.
Let's say you plan to buy an asset for $100 and set a 5% slippage. Then when executing the transaction, if the actual execution price does not fluctuate by more than $105 (price of $100 plus 5% slippage), your transaction will be executed according to the market price. If the actual execution price exceeds $105, your transaction may be canceled and gas fees will be incurred. The slippage can be raised higher. If you set the slippage to 50%, it does not necessarily mean that the transaction will be completed at a price of 150%. It mainly depends on the market fluctuations. If a local dog goes crazy, it will be no problem to pull dozens of points in tens of seconds.
The setting of slippage can help you protect yourself from adverse effects when the market is volatile, but it may also affect the efficiency of transaction execution. Therefore, when setting slippage, you need to weigh the relationship between transaction price and execution risk to determine the most appropriate slippage value.
There are also some reminders for newcomers, be careful when you want to rush into BOME. For example, if you want to rush into BOME, there are many fake ones, which are all air coins. You must check the contract address. If you buy the wrong one, you will end up with a bunch of fee coins, which is a special trap. Novice.
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