What Is the Practical Impact of a High “Slippage Tolerance” Setting in a DEX Interface?
A high slippage tolerance allows the transaction to execute even if the final price is significantly worse than the quoted price. This increases the risk of being front-run by arbitrage bots, who can exploit the wide tolerance to execute a profitable trade before yours.
While a high tolerance ensures the transaction is more likely to succeed during volatile times, it exposes the user to potentially large and unfavorable price deviations.