What is slippage?
In a short sentence: “Slippage is a difference in the asset price from when a trade is placed to when a trade is completed.”
Crypto prices can change quickly, allowing for what is known as slippage to occur. This happens due to the delay that exists between the point of placing a trade to the time when the trade is completed.
Although slippage can occur at any time, it is more prevalent during periods of high market volatility when market orders are used. Slippage can also occur when a large order is executed but there isn't enough volume at the chosen price to fill the order.
How to minimize slippage?
Unfortunately, slippage can’t be predicted but there are some tools and best practices that can help you mitigate the impact of it.
Unlike market orders, that risk the order being filled at unwanted price(s), Emeris uses limit orders to ensure that every trade is filled at the correct price (or a better one).
Users have the option to set an acceptable deviation tolerance percentage from the price should the market fluctuate during the time the order is placed to when the order is filled.
Emeris allows users to customize their slippage tolerance percentage from within the swap widget. With a low slippage, only a small portion of your swap may be filled. The higher the slippage percentage, the higher the chances of the entire swap being filled successfully. Let's take a look at an example.
Scenario 1: The slippage tolerance is set to 3%. The current price of ATOM is $20 and the current price of OSMO is $5. Theoretically, you should receive 4 OSMO. You place your trade but due to extreme market conditions, the price of OSMO rises by 2% before the entire trade is complete. Your entire trade will still be completed because you have set a buffer of 3%.
Scenario 2: The slippage tolerance is set to 0%. The current price of ATOM is $20 and the current price of OSMO is $5. Theoretically, you should receive 4 OSMO. You place your trade but due to extreme market conditions, the price of OSMO rises by 2% before the entire trade is completed. The system will only swap whatever it can while the price of OSMO remains unchanged. Any ATOM balance that remains after the price of OSMO rises by 2% will not be swapped.
By default, Emeris sets the slippage tolerance percentage at 0.5%. This can be adjusted to between 0.1%, 0.5%, 1%, or a custom percentage that suits the user.
How to customize slippage on Emeris
Click on the 3 horizontal dots on the swap widget.
Select the Slippage tolerance: 0.1%; 0.5%; 1%.
The use of a Custom percentage has to be enabled in the settings by toggling the Allow custom slippage on the profile menu.
Allow custom slippage: