How Does Slippage on Decentralized Exchanges (DEXs) Differ from That on Centralized Exchanges (CEXs)?

On CEXs, slippage is caused by insufficient order book depth. On DEXs using Automated Market Makers (AMMs), slippage is an inherent part of the pricing model.

The price on an AMM is determined by the ratio of assets in a liquidity pool. A trade of any size will alter this ratio, thus changing the price.

The larger the trade relative to the size of the pool, the more the price will 'slip' along the pricing curve. While CEX slippage depends on other traders' orders, DEX slippage is a predictable, mathematical function of trade size and pool depth.