What is Slippage?

Slippage 💸 is a common crypto term and it occurs when a trader doesn't get the exact price they were expecting for a trade. For example, you might see a price of $1.01 when you want to make a trade, but end up paying $1.02 when it's completed. This difference is what we call slippage.

There are two main types of slippage:

1. Price Impact Slippage: This happens when the price you're quoted for a trade is different from the current price in the pool. It's called "Price Impact" because it shows how your trade affects the pool's price. If you're making a big trade, it can have a bigger impact on the price.

2. Transaction Slippage: This occurs when the price you're quoted for a trade doesn't match the actual price you receive. It can happen if someone else makes a trade just before you do, and their trade changes the pool's asset balance, causing the price to shift.

Taking this into consideration, ION Finance AMM is designed to reduce both types of slippage. The way ION Finance pools are set up helps minimize price impact slippage, and the user interface checks for slippage to keep transaction slippage low! ⤵️