What is Slippage?
Slippage is the difference between the price you want to trade and the price you traded.
It is difficult to eliminate slippage. Limit trading on a centralized exchange like Bithumb is the only way to eliminate slippage.
- You can also check related information within the Burrito Wallet.
Why Slippage Occurs
Slippage usually occurs in the following cases.
- Transaction processing takes a long time
- Swapping and trading volatile tokens
- When the trading volume is low
- If the order amount is large
How to reduce slippage
How to reduce slippage depends on whether you are using a decentralized exchange (DEX) such as 1inch or a centralized exchange (CEX) such as Bithumb. The swap of the Burrito Wallet is carried out through the DEX service.
- When using DEX
- You pay higher gas rates and trade and swap in a short time.
- The shorter the time from the start of a trade to the completion of a trade, the less likely it is that slippage will occur.
- There is also a way to trade in a DEX based on Layer-2.
- Layer-2 is faster than Layer-1. As such, the time it takes to complete a transaction is relatively short, so the probability of slippage occurring is also low.
- When using CEX
- Use limit order
- Slippage does not occur when trading at the limit price.
- Large-scale transactions are carried out several times in small quantities.
- Slippage may occur if a large amount of money is traded at once. You can lower the probability of slippage by dividing your trades into several smaller amounts.