What is Slippage?

Slippage refers to the difference between the expected price of a trade and the actual price at which it is executed. It occurs when market conditions cause price fluctuations between the time a trade is placed and when it is completed.

Why does Slippage occur?

Slippage happens due to market volatility and liquidity constraints. In highly volatile markets, prices can change rapidly, causing trades to execute at different rates than expected. In low-liquidity markets, large orders can shift prices significantly, leading to slippage.

How can I reduce Slippage?

• Use Auto slippage or a carefully chosen tolerance — a lower tolerance keeps Minimum Received closer to the quote, but can make execution more likely to fail when the market moves.
• Reduce the swap amount — smaller trades can have less price impact in limited liquidity.
• Choose a more liquid asset pair or provider — compare the current routes shown in Gem Wallet.
• Avoid high volatility — rapid price movement makes a quote more likely to change before execution.

What is the difference between Slippage and Price Impact?

• Slippage happens due to market volatility and execution delays, affecting how much of a trade fills at a different price.
• Price Impact occurs when a trade itself moves the market price due to liquidity constraints.

Can I avoid Slippage completely?

No. Slippage is a normal risk for swaps, especially during volatile or low-liquidity conditions. A very low tolerance may cause the transaction to fail rather than guarantee the quoted output.

How Does Slippage Work in Gem Wallet?

Open Swap, select the assets, enter an amount, and open the swap details. Gem Wallet shows Slippage and Minimum Received for the current quote.

Gem Wallet supports Auto slippage and custom values from 0.1% to 20%. Auto currently uses 1% by default and 3% on Solana unless a provider supplies its own supported value. A custom value of 3% or more displays a warning; Auto does not display that warning solely because Solana uses 3%.

Changing slippage requests a new quote. Review the provider, receive amount, minimum received, price impact, and fees again before proceeding.

Gem Wallet uses the quoted output and slippage to calculate the protected output shown before a swap. See What Does Minimum Received Mean in a Swap? for the formula and examples.