Slippage simulator: how order books and AMMs move prices

What is slippage?

Slippage is the difference between the price you expect when you place a trade and the price you actually receive when the trade executes. If you see ETH quoted at $2,000 and click "buy," but your order fills at an average price of $2,012, you just experienced 0.6% slippage. That $12 gap might seem small, but on a $100,000 position it translates to $600 in unexpected cost.

Slippage is not a fee set by an exchange. It is a natural consequence of how markets work. Every market, whether a centralized order book on Binance or a decentralized AMM on Uniswap, has a finite amount of liquidity at any given price. When your order is large relative to that available liquidity, you push the price against yourself as your order gets filled across progressively worse price levels.

There are two fundamentally different mechanisms that cause slippage, depending on where you trade:

• Order book depth (centralized exchanges). Your market order consumes resting limit orders starting at the best price and working outward. A thin order book means your order walks through many price levels before being fully filled.
• AMM price impact (decentralized exchanges). Your swap changes the ratio of tokens in a liquidity pool, and the pool's bonding curve sets a new, worse price for every incremental unit you buy.

Think of it like buying concert tickets. The first few are at face value, but once those sell out, you pay more from resellers at each price tier. The more tickets you need, the higher the average price you end up paying. This analogy applies whether you are buying ETH, selling a memecoin, or swapping stablecoins. Slippage affects both sides of a trade: buyers push the price up, and sellers push it down.

The simulators on this page let you see slippage in action. Drag the sliders, watch the bars and curves move, and build an intuition for how liquidity depth determines execution quality.

How order books work

A centralized exchange like Binance, Coinbase, or Kraken maintains an order book — a list of all outstanding buy orders (bids) and sell orders (asks) organized by price. The highest bid and the lowest ask define the spread, and the midpoint between them is the mid price, which is typically the "price" you see quoted on a ticker.

When you place a market order to buy, the exchange matches your order against the cheapest available asks first. If the cheapest ask has only 2 ETH available and you want 10 ETH, the exchange fills 2 ETH at that price, then moves to the next ask level, and the next, until your entire order is filled. Each successive level is at a slightly higher price. The weighted average of all those fills is your actual execution price, and the gap between that average and the mid price is your slippage.

Order book depth refers to the total amount of liquidity stacked at each price level. A deep order book has large resting orders at tight price intervals — common for major pairs like BTC/USDT on high-volume exchanges. A shallow order book has small orders spread across wide price gaps — typical for altcoin pairs, smaller exchanges, or periods of low activity. The deeper the book, the less your market order moves the price.

Understanding depth is critical for large traders. A whale trying to buy 100 ETH on a shallow book might see 2-3% slippage, while the same order on a deep book costs only 0.01%. The simulator below lets you see this difference visually: watch how a shallow book's ask levels get consumed rapidly while a deep book barely flinches at the same trade size.

How AMMs and constant product pricing work

Decentralized exchanges like Uniswap, SushiSwap, and PancakeSwap do not use order books. Instead, they rely on automated market makers (AMMs) that hold reserves of two tokens in a liquidity pool and price trades using a mathematical formula. The most common formula is the constant product model:

Here, x is the reserve of Token A (say ETH), y is the reserve of Token B (say USDC), and k is a constant that stays the same before and after every trade (ignoring fees). The spot price at any moment is simply the ratio y / x. If the pool holds 50 ETH and 100,000 USDC, the spot price of ETH is $2,000.

When you swap USDC for ETH, you add USDC to the pool and remove ETH. The pool must maintain the invariant x × y = k, so as y increases, x must decrease — but not linearly. The curve is a hyperbola, which means the first units of ETH you buy are close to the spot price, but each additional unit costs progressively more. This is price impact, and it is the DEX equivalent of slippage.

The key variable is trade size relative to pool size. Swapping $1,000 in a $10 million pool barely moves the curve — price impact might be 0.01%. The same $1,000 swap in a $100,000 pool moves the curve significantly, causing 1% or more in price impact. This is why deep liquidity pools are critical for large trades on DEXs, just as deep order books are critical on CEXs.

The math works as follows. Suppose you want to buy ETH by depositing dy USDC into the pool:

The simulator below plots the constant product curve and shows exactly how your trade moves along it. Toggle between a small and large pool to see how pool depth transforms the same dollar trade from painful to negligible.

Slippage vs price impact vs spread

These three terms are often used interchangeably, but they describe different things. Understanding the distinction helps you diagnose why a trade cost more than expected and where to focus your optimization efforts.

On a centralized exchange, slippage is the sum of the spread plus the price impact of walking through order book levels. On a DEX, slippage is almost entirely price impact (since there is no spread in the traditional sense), plus any price movement that occurs between when you submit the transaction and when it is mined on-chain. This on-chain delay component is sometimes called execution slippage and is closely related to MEV (maximal extractable value), where bots can front-run your transaction to extract profit from the price movement your trade will cause.

How to minimize slippage

Slippage is a cost you can manage. Here are six practical strategies, applicable to both centralized and decentralized trading.

1. Use limit orders on centralized exchanges

A limit order specifies the maximum price you are willing to pay (for buys) or the minimum price you are willing to accept (for sells). Unlike a market order, a limit order will not execute at a worse price than you set. The trade-off is that your order might not fill immediately — or at all — if the market moves away from your limit price. For large trades where slippage is a concern, limit orders are the single most effective tool.

2. Set slippage tolerance on DEXs

Every DEX interface lets you set a slippage tolerance — the maximum percentage by which the execution price can deviate from the quoted price before the transaction reverts. Setting this to 0.5% means the swap will fail if the price moves more than 0.5% against you. This protects you from sandwich attacks and sudden price moves. For stablecoin swaps, you can often use 0.1%. For volatile tokens, 1-3% may be necessary. Never set it higher than you are comfortable losing.

3. Split large orders with TWAP

Time-weighted average price (TWAP) strategies break a large order into many smaller orders executed over a period of time. Instead of buying 100 ETH in one shot (and eating through the order book), you buy 10 ETH every 5 minutes for 50 minutes. Each small order has minimal price impact, and the average price tends to be much better than a single large fill. On-chain TWAP tools like CowSwap's programmatic orders or custom smart contracts can automate this for DEX trades.

4. Choose deep liquidity pools

Not all pools are created equal. The ETH/USDC pool on Uniswap V3 mainnet might have $500 million in concentrated liquidity, while the same pair on a smaller DEX might have $500,000. The same trade will experience 1,000x more price impact on the smaller pool. Before swapping, check the pool's total value locked (TVL) and the liquidity concentration around the current price. Tools like CleanSky surface this data so you can route your trade to the deepest pool available.

5. Avoid volatility spikes

Slippage increases during periods of high volatility because order book depth thins out (market makers widen their quotes) and AMM pool reserves can be temporarily skewed by large trades. Avoid trading immediately after major news events, token listings, or CPI/FOMC announcements. If you see abnormally wide spreads or unusually high estimated price impact, wait 15-30 minutes for liquidity to stabilize.

6. Use DEX aggregators

A DEX aggregator like 1inch, Paraswap, or CowSwap splits your trade across multiple liquidity sources — several Uniswap pools, Curve, Balancer, and others — to find the route with the lowest total slippage. Instead of sending your entire $50,000 swap through a single pool, the aggregator might split it 60/30/10 across three pools, each handling a trade size well within its depth. This is the DEX equivalent of smart order routing on a centralized exchange, and it can save 20-80% on price impact for large trades.

Slippage reference table

The table below shows approximate slippage (price impact) for different trade sizes and pool depths, assuming a standard constant product AMM with no fees. Real-world slippage may vary due to concentrated liquidity, fee tiers, and multi-hop routing.

Notice the pattern: slippage grows non-linearly. Doubling your trade size more than doubles your slippage because each incremental unit pushes the price further along the curve. A $50,000 swap in a $100K pool loses 40% to price impact — you would receive only $30,000 worth of the target token. This is why pool depth is arguably the most important factor for any trader to evaluate before executing a swap.

Frequently asked questions

What is slippage in crypto?

Slippage in crypto is the difference between the price you expect when you submit a trade and the price you actually receive when the trade executes. It occurs on both centralized exchanges (where your market order walks through order book levels) and decentralized exchanges (where your swap changes the reserve ratio in a liquidity pool). Slippage is usually expressed as a percentage of the expected price and is driven primarily by your trade size relative to available liquidity.

What causes slippage on a DEX?

Slippage on a DEX is caused by price impact — your trade changes the ratio of tokens in the liquidity pool, which moves the price according to the constant product formula (x × y = k). Larger trades relative to the pool's total liquidity cause more price impact. Additionally, front-running by MEV bots can worsen slippage by trading ahead of you and moving the price before your transaction executes. Network congestion can also cause delays that result in price changes between submission and execution.

What is a good slippage tolerance?

For most trades on major token pairs, a slippage tolerance of 0.5% to 1% is considered safe. Stablecoin swaps can use tighter tolerances of 0.1% to 0.3%. Volatile or low-liquidity tokens may require 2% to 5% or more. Setting your tolerance too low causes transactions to revert (wasting gas fees), while setting it too high exposes you to sandwich attacks where MEV bots exploit the gap between your expected and worst-case price. Start conservative and increase only if transactions are failing.

How is AMM price impact calculated?

In a constant product AMM (x × y = k), price impact is calculated by comparing the spot price before the trade to the average execution price. If you sell dy tokens of Y to buy X: new_y = y + dy, new_x = k / new_y, tokens received = x - new_x, average price = dy / tokens_received. Price impact = (average_price - spot_price) / spot_price × 100%. The larger your trade relative to pool reserves, the higher the price impact. For a trade of size d in a pool of total value V, the approximate price impact is d / V × 100% for small trades.

How do I reduce slippage on Uniswap?

To reduce slippage on Uniswap: (1) Trade on pairs with deep liquidity — major tokens like ETH/USDC have larger pools. (2) Split large orders into smaller trades spread over time using TWAP strategies. (3) Use a DEX aggregator like 1inch or CowSwap to route through multiple pools and find the best price. (4) Avoid trading during high volatility periods when prices are moving fast and liquidity is thin. (5) Set a reasonable slippage tolerance (0.5-1% for major pairs) to protect against sandwich attacks. (6) Consider using limit orders via protocols like UniswapX that let you specify your exact price.

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