Slippage in Crypto: Why You Got a Worse Price Than You Expected

Bisi spotted a small coin trading at 0.500 USDT, tapped "Buy" with a market order for 1,000 USDT and expected about 2,000 coins. About 1,921 arrived. The average price came out at roughly 0.521, more than 4% worse than the price on the screen.

Nobody stole anything, and the exchange didn't glitch. That gap is slippage, and once you see how it happens, most of it is avoidable.

What slippage is

Slippage is the difference between the price you expected when you placed a trade and the price you actually got. It can go either way, but with market orders and fast markets it usually goes against you.

It isn't charged as a fee, so you won't find it on a fee page. It shows up in your average price.

It's also different from the spread, the gap between the best buy price and the best sell price at any moment. You pay the spread even on a tiny order. Slippage is the extra you pay when your order is too big for the best price on offer, or when the price moves before you're filled.

Cause 1: the order book is thinner than it looks

On an exchange, the price on the screen is the best price available for a small amount. Behind it sits a queue of sell orders at gradually higher prices. A market order eats through that queue until it's filled.

Here's what Bisi's order ran into. The numbers are invented to show the mechanics.

Sell orders waiting (price per coin)	Coins available	Cost to buy them all
0.500 USDT	400	200 USDT
0.510 USDT	600	306 USDT
0.525 USDT	500	262.50 USDT
0.550 USDT	1,000	550 USDT

The order bought everything at 0.500, 0.510 and 0.525, which came to 1,500 coins for 768.50 USDT. The last 231.50 USDT went on about 421 coins at 0.550. Total: about 1,921 coins at an average of roughly 0.521.

On a busy pair like BTC/USDT, the same 1,000 USDT order would barely move the price, because far more orders are stacked close to the top. How much is waiting near the current price is called depth, and it's one of the things our guide to analysing a coin's liquidity shows you how to check.

Cause 2: the price moves while your order travels

Even in a deep market, the price can move between your tap and your fill. It's worst:

• around big news, when everyone acts at once;
• during sharp falls, when leveraged positions are liquidated in a chain and sell orders flood in;
• in the first minutes after a coin is listed, or while it's being "pumped".

Stop orders are especially exposed, because they trigger exactly when the price is moving fast. Our guide to using a stop-loss covers how to plan for it.

Cause 3: slippage on decentralised exchanges

On a decentralised exchange (DEX), you usually trade against a liquidity pool rather than an order book. The pool prices tokens by the balance between them, so your own trade shifts the price. DEX screens show this as price impact, and the smaller the pool, the bigger it gets. Our explainer on liquidity pools covers how they work.

Then there's the gap between sending your swap and the blockchain confirming it. Other trades can land first and move the price. That's what the slippage tolerance setting is for: it's the most you'll accept the price moving against you. If it moves further, the swap fails instead of filling.

Getting this setting right matters:

• Too low, and swaps keep failing. On many networks you still pay the network fee for a failed transaction.
• Too high, and you invite trouble. Bots watch for pending swaps with loose tolerance, buy just before yours to push the price up, then sell straight after you. This is called a sandwich attack, and your loose setting is what pays for it.

A sensible approach: keep tolerance low on large, liquid pairs, raise it slightly only when a swap fails for a clear reason, and be wary of any token whose website tells you to set it very high. Some tokens take a tax on every transfer, which forces a high setting, and that tax comes straight out of your money.

Seven ways to reduce slippage

1. Use limit orders when price matters. A limit order won't fill at a worse price than you set. Our guide to market vs limit orders explains when each makes sense.
2. Look at the order book before a big market order. If there's little depth near the top, your order will climb the book.
3. Split large orders into smaller ones, spaced out, on thin markets.
4. Avoid trading into news spikes and sharp crashes unless you have to.
5. Stick to liquid pairs where you can. Major coins paired with USDT usually have far more depth than small ones.
6. On DEXs, read the price impact before you confirm, and keep slippage tolerance tight.
7. Check your fill afterwards. Compare your average price with the price you saw. If the gap is often large, change how you trade.

Selling for naira is a different situation

All of the above applies when you trade on an exchange or a DEX. Selling crypto for naira on an instant-sell app works another way: there's no order book to climb and no tolerance to set. On KWIQ, the app shows the rate and the naira amount before you confirm, so you know the figure you're agreeing to. If you're not sure which route suits you, read crypto exchange vs instant-sell app.

Know your number before you say yes

If you'd rather cash out without guessing your average price, download the KWIQ app, open the wallet for your coin and check the naira amount before you sell. Selling crypto for naira is free, and if your phone is low on space you can also create a free account on the web.