Summary
Trades on pairs with low or limited liquidity are subject to high slippage. If slippage is high, you may end up receiving tokens worth significantly less than the tokens you traded. Users are encouraged to always check the depth of the pair before trading, and to review the confirmation screens carefully before signing a transaction in your wallet.
Table of Contents
What is slippage?
Slippage refers to the change in price caused by market movements between when you generate an order for a trade and when the trade is executed onchain. Due to slippage, the amounts shown in the swap preview may differ significantly from the amounts you receive post swap. The final confirmation screen during the swap process will show the minimum amount of tokens you will receive, so you should check that amount carefully.
How to protect yourself from slippage
Check market depth to ensure there’s enough liquidity for your trade
In the Analytics section, check the liquidity for the pool you’d like to trade. If the dollar amount you want to trade is a significant percentage of the total liquidity for the pool, you will be exposed to high slippage. Continuing with such a trade is not recommended.
In the below screenshot, we can see that the SHIB/WETH pair has only $1075 in pool assets. Trading more than $50 on this pool would likely incur significant slippage.
2. Check the final confirmation screen carefully
The below is the swap preview for an ETH→VERSE trade. As you can see, the estimated amount of VERSE to receive is 1,015,464.
After selecting “Swap Preview,” you’ll be presented with the swap confirmation screen below. Note that in the below, the minimum amount to receive is 1,005,309 VERSE. This is within the Verse DEX’s slippage tolerance limit of 1%.
