Slippage is the difference between the expected execution price and the actual price due to reduced liquidity.

In the context of decentralized finance (DeFi), slippage refers to the difference between the expected price of a DeFi trade and the actual price at which the trade is executed.

Slippage can occur for a variety of reasons, such as changes in market conditions or the lack of liquidity in a particular market. In the case of DeFi, slippage can be especially significant due to the high volatility and fast-paced nature of the market.

Slippage can have significant impacts on DeFi investors, as it can lead to unexpected losses or gains on a trade. In order to minimize the impact of slippage, investors can use limit orders when placing trades, which can help to reduce the potential for slippage. Additionally, investors can monitor market conditions and liquidity levels in order to anticipate and avoid potential slippage.

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