How Does a Trader’s Order Size Relate to the Necessary Slippage Tolerance?

A trader's order size is directly proportional to the necessary slippage tolerance, especially on low-liquidity DEX pools. A larger order size will inevitably cause a greater price impact on the liquidity pool, meaning the executed price will be further from the quoted price.

Therefore, a larger order requires a higher slippage tolerance to ensure the transaction executes successfully and does not revert due to the self-inflicted price impact.