Slippage is the difference between the expected price of a trade when an order is placed and the actual price at which it is executed, caused by market fluctuations during the transaction process.

DexToro is not an exchange; it is a self-custody blockchain wallet that allows users to interact with decentralized exchanges (DEXs) on the blockchain. It achieves this through the Jupiter Aggregator, a smart contract that routes trades through multiple DEXs to obtain better pricing. Unlike traditional exchanges that use order books, these platforms rely on automated market makers (AMMs) and liquidity pools to facilitate trades.

To gain a clearer understanding of decentralized exchanges and automated market makers, read this article.

By default, DexToro applies a dynamic slippage tolerance of up to 10% to account for market volatility. For instance, if you purchase $100 worth of a token, you might receive tokens valued between $90 and $110, depending on market conditions at the time of the transaction.

You can adjust the slippage tolerance from 0.5% to 20% by clicking the settings icon in the buy/sell modal.

Price Impact refers to the effect your trade has on the market price, especially when placing large orders in relation to the token's liquidity. If you place a significant order, it may use up a large portion of the available liquidity, causing the price to rise or fall. As a result, you might end up paying more or receiving less than the price displayed at the time you place your order.

When you place a large buy order in a market with low liquidity, it can drive up the token's price as you compete for a limited supply. Conversely, a large sell order can lead to a decrease in price due to the increase in available supply.

To minimize price impact when dealing with a large position, many traders choose to split their trades into smaller transactions. This strategy helps distribute the effect of the trades over time or across different price points, thereby reducing the market movement caused by your order.