Slippage refers to 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 transaction processing.

Slippage tolerance is the percentage difference you're willing to accept between these prices, especially in volatile cryptocurrency markets.

Moonshot is not an exchange—it’s a self-custody blockchain wallet that lets you interact with decentralized exchanges (DEXs) on the blockchain through Jupiter Aggregator, a smart contract that routes through several DEXs for better pricing. Instead of using traditional order books, these platforms rely on automated market makers (AMMs) and liquidity pools to process trades.

For a better understanding of decentralized exchanges and automated market makers, check out this article.

By default, Moonshot applies a dynamic slippage tolerance of up to 5% to accommodate market volatility. For example, if you’re purchasing $100 worth of a token, you may receive tokens valued between $95 and $105, depending on market conditions at the time of execution.

You can modify the slippage tolerance from 0.5% to 20% by clicking the filter button at the top left of the buy/sell modal.

Common Trading Challenges Related to Slippage 1. Selling Large Token Amounts When selling large volumes of tokens, significant price changes can occur due to the transaction's impact on the liquidity pool, resulting in less favorable execution prices. Increasing slippage tolerance allows these transactions to proceed despite price differences. 2. Difficulty with Low-Liquidity Tokens If you encounter issues selling a token despite adjusting slippage tolerance, the problem might be due to insufficient liquidity. It's recommended to verify the legitimacy and liquidity of tokens before purchasing them.

Please note: Change these settings at your own risk; you are responsible for your transactions.

Price Impact refers to how your trade affects the market price, particularly for large orders relative to the token’s liquidity. Placing a significant order can consume much of the available liquidity, pushing the price up or down, which might result in you paying more or receiving less than the price displayed when you place your order.

Placing a large buy order in a low-liquidity market can increase the token’s price as you compete for a limited supply. Similarly, a large sell order can decrease the price due to increased supply.

To minimize price impact on a large position, people often split their trade into smaller transactions. This can help distribute the effect over time or across different price points, reducing market movement caused by your order.

Content on this page is for information purposes only and does not constitute a recommendation by Moonshot to buy, sell, swap, or hold any product referenced in the content. Moonshot reserves the right to periodically make any changes, modifications, or amendments to this page, in its sole discretion, by posting or making available to you an updated version of this page. The updated page will be effective immediately, and your continued use of Moonshot will constitute your acknowledgment and acceptance of the updated contents of this page. If you do not understand or agree with Moonshot’s terms or any updated content on this page, you must immediately stop using Moonshot.