Slippage Parameter Failure

Definition ∞ Slippage Parameter Failure occurs when the maximum acceptable price deviation set by a user for a decentralized exchange transaction is inadequate, leading to a trade executing at a significantly worse price than expected. This often happens in volatile markets or with low-liquidity asset pairs, where large orders can move the market price beyond the user’s specified tolerance. It results in unexpected financial losses for the trader.
Context ∞ Slippage parameter failure is a common issue reported by users interacting with decentralized exchanges, particularly during periods of high market activity or when trading illiquid assets. Understanding and correctly configuring slippage tolerance is crucial for mitigating these risks in DeFi. Protocols are working on features like advanced order types and improved liquidity aggregation to help users avoid detrimental price execution.