Slippage and price impact
Why you get filled at a worse price than you clicked, how big your trade is compared with the pool, and what your slippage setting really allows.
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You click buy at one price and get filled at another. Two things cause it. Price impact is you. Slippage is everyone else.
Price impact: your own trade moves the price
A memecoin's price comes from a pool, or from a bonding curve before it graduates. When you buy, you put SOL in and take tokens out, and the price climbs while you buy. The bigger your buy compared with the pool, the more you pay on average.
A 3 SOL buy into a thin pool
A coin's pool holds 30 SOL on one side. You buy 3 SOL worth, a tenth of the pool.
- Step 1: In a standard pool, your average price ends up about 10% above the price on the screen.
- Step 2: The price right after your buy is about 21% higher than before it, and your wallet now values your tokens at that new price.
- Step 3: That paper gain is not real. Selling pushes the price back down, so an instant sell would only hand back about your 3 SOL, minus the pool fee on both trades.
- Step 4: If other traders sell first and the price falls back to where it was before you bought, the same tokens fetch only about 2.5 SOL, before fees.
- Step 5: The same 3 SOL into a pool holding 300 SOL would cost only about 1% more than the screen price.
The rule of thumb is simple. Compare your size with the liquidity. If your buy is a real slice of the pool, you are the one moving the chart. You fill worse than the screen price on the way in, and again on the way out.
Slippage: the price moves before you land
Between the moment you click and the moment your transaction lands, other trades land first. In a busy coin that can be dozens of trades in a second. Slippage is the gap between the price you were quoted and the price you actually get.
Your slippage setting, also called slippage tolerance, is the worst gap you will accept. Set 10% and the trade fails if the price has moved more than 10% against you. Set 50% and you will accept almost anything.
Why memecoin traders set it so high
New coins move fast. With a tight setting, many buys fail because the price ran while the transaction was in flight, and each failure still costs fees. So traders turn slippage up to 20%, 30% or more just to get filled.
High slippage gets you in, but it is an open invitation. It tells anyone watching that you will pay far more than the screen price. Some bots exist to make you do exactly that. That is the next lesson.
| Slippage setting | What happens | Main risk |
|---|---|---|
| Low, 1% to 5% | Fills only near the quoted price | Fails often on fast coins, and every failure still costs fees |
| Medium, 10% to 20% | Fills on most memecoins | You can lose up to that much to price moves or a sandwich |
| High, 30% and up | Almost always fills | An open door for sandwich bots and very bad fills |
Price impact and slippage never show up as a line called fee, yet on a thin coin they can cost more than every fee in the stack put together.
Next: MEV and sandwich attacksCheck what you learned
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This guide is for learning. It is not financial advice. Most memecoins go to zero and most people who trade them lose money. Only ever trade what you can afford to lose.