Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. This occurs when the market price moves unfavorably between the time an order is placed and when it is filled. In digital asset markets, particularly decentralized exchanges, slippage can be influenced by order size, market liquidity, and the speed of transactions. It represents a cost incurred by traders.
Context
The discussion around slippage in digital asset markets is predominantly focused on its impact on decentralized finance (DeFi) protocols and the strategies employed by traders to mitigate its effects. Concerns are often raised about the predictability of slippage in volatile markets and its potential to erode trading profits. Future considerations involve the development of more sophisticated order execution algorithms and improved liquidity aggregation techniques to minimize this phenomenon.
PancakeSwap's strategic multi-chain expansion and V3 concentrated liquidity upgrades redefine DEX capital efficiency and user experience, attracting significant cross-ecosystem liquidity.
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