Slippage Protection

Overview

DEXes often indicate quoted prices that do not factor in slippage, as a result, users often find that the realized price can be drastically different to what a front-end estimates. It is not uncommon to see an option for slippage tolerance in a DEX’s transaction settings. Users should be aware, however, that setting a low slippage tolerance can often result in the trade failing.

One method of slippage protection that 0x uses is to utilize slippage statistics to predict slippage outcomes for different trade sources, pairs, and sizes. The slippage statistics are incorporated into the trade routing algorithm to quote more accurately and execute at a better price.