Purchasing memecoins in 2021 gave me exposure to what slippage is in crypto. A term that seemed complex but ended up being quite simple.
“Slippage refers to when the order goes through at a different price.”
During the latest memecoin mania, learning this became an absolute must.
When market prices are moving up and down like crazy, making an order for the actual price is quite an accomplishment.
Every pro trading platform had slippage settings available, and people left and right were telling me to adjust them to make my transactions land fast.
At a cost, though, because soon enough I would realize I was losing money and opportunities partially because of my slippage percentage settings.
"I must have lost over $2k last year in 2025 due to slippage issues alone. Don't let this be you."
It all sounded so complicated.
As a noob, I eventually figured out that each transaction could have slippage.
Especially when assets are volatile, the order would land slightly over or under the expected price you saw, scoring me more or less than expected.
Later, I figured out that it could be due to my slippage tolerance settings, a percentage you set on your exchange settings.
That’s why you need your slippage tolerance to be just right, to give the buy or sell order some flexibility on the price of the asset for the order to settle.
If Bitcoin shifts 5% within a minute and you made an order right then, then it is likely your slippage tolerance was key to making the transaction happen.
Although it is worth checking because you might have made slightly more or less than what you would have expected from the straight swap.
If you are new to crypto trading and want to trade when the market price moves dramatically, then this article is a must for you.
Let’s jump into an example and see how slippage happens.
Example: A completed 3% slippage order
Before we start, note that a 5% slippage is high, and common orders are less than 0.5%.
Only in very unique scenarios do you put high slippage, maybe with memecoins.
Anyways, let’s dive into an example.
Let’s assume you are buying $100 of Bitcoin, which is trading at $100k.
The slippage is set for up to 5% slippage on the order, which is very high!
Then, Bitcoin moves up and down, with market volatility, with many orders happening at once.
Bitcoin moved from $100k, to $97k, which is a 3% drop. A 3% discount if you were planning to buy at a higher price!
And because it’s below the 5% max slippage you set, the order goes through.
Your order goes through, but with a 3% positive slippage.
In this case, the slippage ended up being positive. You got 3% more than expected.
At the original $100k price, that extra BTC would have cost you $103 worth of Bitcoin (BTC) at the new price, giving you $3 more than expected!
Be careful, because this could happen the other way around.
If BTC rose to $103k, you would get $97 worth of Bitcoin (BTC) from your $100 order, that’s negative slippage.
At the end, your goal should always be to minimize slippage that makes you lose money.
Slippage Calculator
To showcase what a positive and negative slippage might be, test it out yourself in our very own slippage calculator.
All you have to do is set the order amount you are buying, and the difference between the expected price and the executed trade price.
Adjust the executed price to see how different scenarios affect your slippage.
Once done, the calculator will give you the percentage slippage of the order, or the potential slippage of a hypothetical order.
This will help you identify the right slippage tolerance for your settings.
You might realize that you are not willing to operate with a slippage of over 5%, or even less. This calculator was built to optimize your crypto trading strategy.
When does slippage in crypto happen?
Slippage typically occurs when there is a gap between the expected and the actual executed price. Crypto’s volatility makes slippage tolerance settings extra useful.
When volatility spikes or liquidity pool issues hit, the chart takes investors for a wild ride.
A few reasons why slippage happens:
- Low Liquidity: When there are not enough orders at your specific price, and the order fills at worse levels. For example, there are no matching buyers at your selling price
- Low Trading Volume and Large Trades: When you consume the tokens' available liquidity, more than the exchange can handle in one trade
- Network Congestion: When a blockchain gets congested, and transactions get clogged, price drifts
A technical audience would also appreciate explaining how slippage occurs between AMMs and the role of MEV attacks. Something that we will explore in a different article.
How to set slippage
Slippage is something that is automatically set in your trading platform’s settings. Whether you use a centralized exchange (CEX) or a decentralized exchange (DEX), you can adjust them at any time.
In fact, you could have tons of presets for buy and sell orders if you need to be fast at putting the orders.
Aside from my CEX, I use Axiom (DEX) to jump in on new projects in Solana.
If you need more options and like the Solana ecosystem, check out some of the best Solana DEX trading platforms out there. Any of these will have similar slippage settings.
Slippage Tolerance By Asset Type
It’s all subjective, really, but at least we can attempt to draft a guideline to navigate market conditions.
Traditional Digital Assets and Larger Orders
If you are doing larger orders on a CEX, your slippage is typically low.
Let’s say you are making an order that is over $1k, as an example. And you want a common crypto asset like Bitcoin, Ethereum, Solana, or any other large market cap asset.
In this case, then it's best to keep it around 0.5%, the smaller the better.
Memecoins
For memecoins, it’s a really tricky scene. It depends on the situation.
Bear in mind that these are highly volatile markets, perhaps the most volatile of them all. It's like trading penny stocks on steroids.
Many times, the idea is for the order to happen before volatility, catching the memecoin before a massive god green candle.
If you trade with volatility, and the asset has a low marketcap, then expect to hover between 5%-15%.
This is without a doubt an excessive slippage tolerance, so be careful.
I know it sounds crazy, but those who caught a memecoin runner as it peaked probably did so.
Some of these assets reach very high price levels and dump tremendously, all within minutes, hours, or days. The chances of catching a quick win are real in the crypto world.
That's why having a loose slippage tolerance is key, else the orders don't go through between the massive green and red candles.
Memecoin traders intentionally seek this increased risk with price volatility to score big.
Crypto Trading Platforms with Slippage Settings
Now that you know what slippage is in crypto, go ahead and set it up yourself on your favorite CEX, DEX, or swap aggregator.
Know that we can safely assume that any reputable platform or service offers slippage settings, a crypto market standard.
Platforms like Coinbase, Kraken, and Gemini offer it, essentially all CEXs.
DEXs like dYdX, Raydium, Orca, and more offer it too.
Memecoin-focused pro trading platforms like Axiom have advanced settings for it.
Along with popular aggregators like Jupiter, Uniswap, and 1inch.
Heck, even crypto and NFT wallets are offering swapping services that allow you to adjust your slippage tolerance.
Again, any reputable platform that offers buy and sell crypto services should have slippage settings available.
Strategies to avoid excessive slippage
Beyond slippage tolerance settings, there are a few strategies to keep in mind to reduce getting burned.
Setting up limit orders to completely avoid slippage
One strategy that will allow you to be more hands-off with your trades will be to set up a limit order.
Once you set up a limit order, you can forget about unexpected price changes. Pretty good thing to do if you want to catch some sleep in this market.
With a limit order, you simply execute the order at a specific limit price. The order won’t trigger unless it reaches the price you set, or something more favorable.
Although, know that limits can backfire if they are not triggered, consequently making you miss a potential opportunity at a better price.
Not trading when there’s high volatility
Completing an order of an asset that experiences volatility can cost you big bucks.
Ideally, you want to try to avoid volatile periods and operate with a conservative slippage tolerance level.
"One of the trades that scored me $30k in 2025 was done by doing the exact opposite, during peak volatility. The only way I could sell my asset as it tanked was to increase my slippage and earn less. Better than making nothing at the end of the day."
Rapid price fluctuations are not ideal for crypto trading if you are risk-averse. The mental rollercoaster these risky trades give you is quite steep.
Avoid trading on platforms with low liquidity
If you need to buy an asset that is selling like hot cakes, expect the exchange to give you fluctuating rates as it scrambles to increase its inventory and maintain the commerce going.
Liquidity refers to the availability of the asset.
If an exchange starts running out of Bitcoin (BTC), it then needs to figure out how to supply that demand without bothering its customers. In this case, the exchange has low liquidity pools of Bitcoin available. It's common terminology in financial markets.
On the other hand, exchanges with massive inventories are less likely to give you unfavorable slippage.
Remember to use crypto slippage to your advantage
Now that we have a better idea in terms of what slippage in crypto is, how it works, and where you can set it up.
Make sure to test it out yourself!
When in doubt, remember you have the calculator to forecast your trades.
In the calculator, set up the exact price you made the order and the final execution price, or the desired price movement you are looking for, to see the impact. It'll guide you as to what slippage tolerance is healthy for you.
With caution, of course.
"A reduced slippage tolerance is best, as long as it goes through."
Remember, your slippage tolerance should always differ depending on the type of assets you buy and sell, and the size of the order.
Navigating the crypto market
That's a wrap!
Let's face it: understanding slippage can be a bit complicated. Especially if you mix 'slippage' with 'slippage tolerance'.
"In my opinion, having positive slippage is great but unpredictable, and I'm more in favor of making more predictable trade outcomes. So to me, less slippage is best, and limit orders are your ally."
Time to give it all a test. Make informed trading decisions and avoid making market orders during less favorable prices.
Write down the certain price difference your slippage tolerance gives you, and ask yourself if this is okay with you.
If you are looking to test it out yourself, remember to check out Axiom to trade all Solana tokens with ease, or check out some of the other best Solana DEX trading platforms out there.
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