What Is 'Slippage Tolerance' and How Does a Trader Use It to Mitigate Front-Running Risk? ▴ Learn

What Is ‘Slippage Tolerance’ and How Does a Trader Use It to Mitigate Front-Running Risk?

Slippage tolerance is the maximum percentage of price change a trader is willing to accept between the time they submit a trade and the time it is executed. By setting a very low slippage tolerance, a trader limits the potential profit a front-runner can extract from a price manipulation.

If a front-runner's preemptive trade causes the price to move beyond the set tolerance, the original transaction will automatically fail. This forces the front-runner to pay the gas fee without gaining a profit.

What Is the Role of Slippage Tolerance in Protecting against Front-Running?

In What Scenario Might an Attacker Try to Manipulate the Raw Transaction Data?

How Does ‘Slippage Tolerance’ Make a Transaction Vulnerable to a Sandwich Attack?

What Is a ‘Price Tolerance’ Setting and How Does It Manage Slippage Risk?