Low Slippage

Definition ∞ Low slippage refers to a minimal difference between the expected price of a trade and the price at which the trade is actually executed. This condition is ideal for traders, as it means their orders are filled very close to their desired entry or exit points. It typically occurs in markets with high liquidity and narrow bid-ask spreads. Avoiding significant price deviation is key.
Context ∞ In decentralized finance (DeFi) and digital asset trading, achieving low slippage is a critical performance metric for exchanges and liquidity pools. High slippage can result in substantial losses for traders, especially with large orders or during periods of market volatility. Protocols continuously work on improving liquidity and optimizing automated market maker algorithms to provide better execution prices for users.