What Role Does Slippage Tolerance Play in Protecting a Trader from Being Front-Run?
Slippage tolerance is a setting on DEXs that specifies the maximum percentage deviation a trader is willing to accept between the expected trade price and the executed price. By setting a low slippage tolerance (e.g.
0.5%), a trader limits the potential profit a front-runner can extract from their trade. If a front-runner attempts to sandwich the trade, and the resulting price movement exceeds the low tolerance, the original transaction will revert or fail.
This mechanism makes the attack less profitable or even impossible, thus acting as a deterrent.