What Is “Slippage” and How Does Deep Liquidity Mitigate It?

Slippage is the difference between the expected price of a trade and the price at which the trade is actually executed. It commonly occurs in volatile markets or when executing large orders.

Deep liquidity, meaning a large total value locked (TVL) in the pool, ensures that large trades cause minimal movement along the bonding curve. This minimizes the price impact of the trade, thereby reducing slippage for traders.