# Slippage and price impact: two reasons a swap rate can differ Price impact describes how a trade changes execution price by consuming liquidity. Slippage commonly describes a difference between the quote and actual execution as conditions change. A slippage-tolerance setting permits a bounded worse result or rejects the trade; increasing it does not improve the quote. Evidence: [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing); [Uniswap v2 pair source](https://raw.githubusercontent.com/Uniswap/v2-core/v1.0.1/contracts/UniswapV2Pair.sol) Canonical: https://degreesofsatoshi.com/encyclopedia/slippage-and-price-impact/ Published: 2026-10-02 Substantively modified: 2026-10-02 Independently verified by an automated reviewer: 2026-10-02T18:17:57.897Z AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied. ## Key facts - **Price impact:** A trade’s size relative to reserves affects its rate. ([Uniswap v2 pair source](https://raw.githubusercontent.com/Uniswap/v2-core/v1.0.1/contracts/UniswapV2Pair.sol)) - **Slippage bound:** A minimum output restricts accepted execution. ([Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing)) - **Tolerance:** A wider permitted range does not add liquidity. ([Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing); [Uniswap v2 pair source](https://raw.githubusercontent.com/Uniswap/v2-core/v1.0.1/contracts/UniswapV2Pair.sol)) ## A trade moves along the curve In a fee-free pool with 100 A and 1,000 B, the starting marginal rate is 10 B per A. A trade of 10 A receives about 90.909 B, or 9.0909 B per A on average. Relative to the starting rate, that is about 9.09% lower. This gap exists even if no other trader acts between quote and execution. The trade itself changes inventory. Software sometimes includes fees or uses another reference rate in its displayed price-impact figure, so the definition matters. Evidence: [Uniswap v2 pair source](https://raw.githubusercontent.com/Uniswap/v2-core/v1.0.1/contracts/UniswapV2Pair.sol) ## Calculate the minimum acceptable output explicitly For an illustrative exact-input swap using a direct percentage reduction from a 100-unit quote, a 1% tolerance sets a 99-unit minimum before rounding. An interface can use a different convention, so inspect the actual encoded bound that the contract enforces. Raising tolerance to 5% changes the permitted minimum to 95; it does not improve the 100-unit quote. A looser bound can allow worse execution. A tighter bound can lead to failure when state moves, and an included failing transaction may still cost gas. Evidence: [UniswapX overview](https://docs.uniswap.org/contracts/uniswapx/overview); [EIP-140: REVERT instruction](https://eips.ethereum.org/EIPS/eip-140); [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing) ## Keep the reference and timing visible A useful comparison reports input, quote time or block, quoted output, minimum output and settled output. Separate pool fees from gas and interface charges. Otherwise two percentages can describe different economic effects while using the same word. Limits can reject an unfavorable transaction without preventing the gas cost of an included failure. A deadline can limit when a transaction is valid, but does not reserve the quoted pool state until then. Evidence: [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing); [EIP-140: REVERT instruction](https://eips.ethereum.org/EIPS/eip-140) ## Questions ### Will increasing slippage tolerance make the swap cheaper? No. It broadens the range of acceptable execution and may allow a worse result. The quoted output still comes from inventory, route, fees and the amount being traded. Evidence: [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing); [Uniswap v2 pair source](https://raw.githubusercontent.com/Uniswap/v2-core/v1.0.1/contracts/UniswapV2Pair.sol) ## Claims and scope ### slippage-and-price-impact-quick-answer Price impact describes how a trade changes execution price by consuming liquidity. Slippage commonly describes a difference between the quote and actual execution as conditions change. A slippage-tolerance setting permits a bounded worse result or rejects the trade; increasing it does not improve the quote. Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null} ### slippage-and-price-impact-fact-price-impact Price impact: A trade’s size relative to reserves affects its rate. Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null} ### slippage-and-price-impact-fact-slippage-bound Slippage bound: A minimum output restricts accepted execution. Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null} ### slippage-and-price-impact-fact-tolerance Tolerance: A wider permitted range does not add liquidity. Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null} ## Sources - [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing) — Uniswap. Reserve-dependent quotes, trade bounds and external price observations. Locator: Pricing Trades; Exact Input; Exact Output. Retrieved: 2026-10-02. - [Uniswap v2 pair source](https://raw.githubusercontent.com/Uniswap/v2-core/v1.0.1/contracts/UniswapV2Pair.sol) — Uniswap. Reserve accounting, LP shares, fee-adjusted invariant and optional protocol fee. Locator: mint; burn; swap; _mintFee. Retrieved: 2026-10-02. - [EIP-140: REVERT instruction](https://eips.ethereum.org/EIPS/eip-140) — Ethereum Improvement Proposals. Reverting rolls back state but does not refund work already executed; unused gas is not all consumed. Locator: Specification; Test Cases. Retrieved: 2026-10-02. - [UniswapX overview](https://docs.uniswap.org/contracts/uniswapx/overview) — Uniswap. Signed order execution through fillers; execution conditions are mechanism-specific. Locator: Signed orders; Fillers; Dutch auctions. Retrieved: 2026-10-02T17:21:47.712Z. ## Revision history - 2026-10-02: First publication after primary-source research and independent automated verification. - 2026-10-02: Before first publication, independent review checked and revised: sections, sources. Compared pricing guide trade bounds and v2 curve with the article’s explicit comparison conventions. Recomputed average-rate gap 9.09%, 1% haircut 99 from100, and 5% haircut95. Verified tolerance changes permitted minimum rather than quoted output or liquidity. Added EIP-140 evidence for included-failure gas and a Swap Lab exercise. No universal UI percentage convention is claimed. - 2026-10-02: Expanded explanation: Calculate the minimum acceptable output explicitly. Worked examples are illustrative; source checks and independent verification are recorded separately. ## Cite this entry Degrees of Satoshi editorial project. “Slippage and price impact: two reasons a swap rate can differ.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/slippage-and-price-impact/