Slippage
The difference between the expected price of a trade and the actual execution price, caused by insufficient liquidity.
Slippage occurs when a trade is large enough relative to pool liquidity that it moves the price during execution. In an AMM, buying token X depletes the X reserve and increases the Y reserve, pushing X's price up. The larger the trade relative to pool depth, the more price impact.
Most DEX interfaces show an estimated price impact and allow users to set a slippage tolerance — the maximum percentage deviation they'll accept. If the actual slippage exceeds the tolerance, the transaction reverts.
For illiquid tokens or large trades, slippage can be substantial (10%+). Routing aggregators (like 1inch or Paraswap) split large trades across multiple pools to minimise total slippage.