The idea in one sentence
Your own trade moves the price against you, and the bigger it is, the harder it pushes.
On an exchange
In an order book the best price is available for a limited size. Say 20 coins are offered at $100, another 50 at $100.50, another 200 at $101.20. If you need 30 coins you take the first twenty at 100 and ten at 100.50. Your average is 100.17, not 100. That 0.17% is your slippage.
The spread shown in a table is computed from the top line of the book. For a size that fits there, it is correct. For anything larger, it is not.
In a DEX pool
Here the price comes from a formula rather than a book. Two coins sit in the pool and the rate between them is their ratio. When you buy, you remove one and add the other: the ratio shifts and the price moves away. For a classic pool the shift is roughly
S / (L/2 + S), where S is your trade size and L the pool's liquidity in dollars.
Put numbers in: a $200,000 pool and a $1,000 trade gives about 1% of slippage. The same trade at $10,000 gives 9%. Same pool, nothing changed except your size.
What follows from this
A spread is inversely proportional to size. That is arithmetic, not a figure of speech. A route netting 8% on a $60,000 pool is excellent at $500 and loss-making at $20,000. The Capital field in the DEX scanner is there for exactly this reason.
Liquidity beats spread. A 1.5% route on a five-million pool is almost always better than a 9% route on a fifty-thousand one, simply because you can actually enter it.
Splitting a trade helps, but not for free. Two $5,000 trades instead of one $10,000 trade mean less slippage, but the price moves between them, and on a DEX you pay gas twice.
Where we show the number
- In the DEX scanner — a dedicated Slippage column, recalculated for your capital.
- In cross-exchange arbitrage — the depth check button, which does not estimate but actually walks both books for your size.
- On P2P — the ad's limits are shown next to the price, so you can see how much is available at it.
Why it is the most underrated number
Everyone sees fees: they are published in the fee schedule. Slippage is published nowhere — it appears at the moment of execution. That is where most "profitable" trades fall apart: the trader budgeted 0.1% + 0.1% and lost 3% on the fill without understanding why.