What does slippage mean in crypto? Quote versus execution

Imagine a pool containing a CAD-valued reserve of 100,000 and 100,000 tokens. The starting ratio is CAD 1 per token. Our CAD side is an accounting unit held constant at CAD 1 per unit, not a claim that this pool accepts bank dollars.

A CAD 1,000 input would buy 1,000 tokens if that starting rate remained unchanged for the whole trade. In the fee-free pool model below, the trade itself changes the reserves. The quote is therefore about 990.099 tokens. A further assumed 1% adverse change after quoting reduces the illustrated execution output to 980.198 tokens.

The experiment uses a simplified constant-product pool: reserve A × reserve B stays constant through a swap, with fees excluded. This relationship is described in Uniswap's v2 documentation. It is not a simulation of every exchange, concentrated-liquidity pool or routing system.

Here, quoted tokens = token reserve × CAD input ÷ (CAD reserve + CAD input). Substituting our values gives 100,000 × 1,000 ÷ 101,000 = 990.0990099 tokens. The shortfall from the 1,000-token baseline is 9.9009901 tokens, or approximately 0.990099%.

That percentage describes the output shortfall against the starting spot-rate baseline. It is not the percentage change in the pool's final spot price. Increasing the hypothetical order to CAD 10,000 yields 9,090.909 tokens against a 10,000-token baseline, a 9.090909% shortfall.

To interpret the reserves behind this example, separate pool liquidity from market cap rather than treating valuation as cash available to sellers.

Now hold the original quote at 990.0990099 tokens. We separately assume an adverse post-quote change of 1%: 990.0990099 × 0.99 = 980.1980198 tokens. This second reduction is the illustrated slippage. We measure this reduction as a share of the quoted tokens, not the original 1,000-token starting amount.

The experiment expresses slippage in output-token terms for a fixed input. A positive adverse percentage means fewer tokens; a negative percentage means more. At -1%, output becomes approximately 1,000 tokens. Favourable execution improves the quote, but does not mean the trade originally had no pool impact.

With tolerance set to 2%, minimum output is 990.0990099 × 0.98 = 970.2970297 tokens. The illustrated output of 980.1980198 is above that minimum, so it stays within the chosen limit. It does not lose an additional 2% merely because that limit was selected.

At an assumed adverse change of 3%, output is approximately 960.396 tokens and falls below the same minimum. Uniswap identifies exceeding a slippage limit as one reason a transaction can fail. This calculator does not submit a transaction or account for gas charges, timing or other reasons a trade might fail. Staying within the example limit does not guarantee a real trade will complete.

1. 1

   Change the order

   Keep both reserves at 100,000. Compare CAD 1,000 and CAD 10,000 inputs to see how the size of your order changes the quoted token amount.

2. 2

   Change the movement

   Return the input to CAD 1,000. Compare adverse changes of 1%, 3% and -1% while tolerance stays at 2%. Compare the quote with the assumed final amount.

3. 3

   Lower the allowed slippage

   Hold the assumed adverse change at 1% and reduce tolerance to 0.5%. The quote and assumed output stay unchanged. Only whether that output meets your minimum changes.

Raise tolerance from 2% to 5% while keeping every other input fixed. Neither quoted nor illustrated execution output improves. You have only lowered the minimum accepted output to approximately 940.594 tokens.

Likewise, changing the assumed adverse movement does not repair the original price impact. Each control answers a separate question. Treating them independently makes the source of a disappointing output visible without pretending that a single setting resolves every cause.

There are no trading fees, network costs, transfer taxes or live quotes here. The post-quote movement is an input you choose, not a forecast inferred from the pool. Displayed values are rounded; calculations use unrounded values.

Use the profit calculator for a separate calculation with entered fees. The impermanent-loss lab explores the liquidity provider's side of a pool. Its holding comparison answers a different question from the token output of this single swap.

The token pool reader shows provider observations for a selected pool; those records do not automatically become the hypothetical reserves in this experiment.