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What is slippage?

Price Slippage is when the price of a trade is impacted by external market moves as opposed to the price changing because of the individual impact of a trade. 

Like Price Impact, slippage is highly dependent on the liquidity of a pool and it also has the potential to affect a trader’s bottom line. 

Stabull.Finance is laser-focused on improving “capital efficiency” for an FX stablecoin-focused AMM to enable stables waps in their purest form by building on top of the lessons learned of earlier iterations from AMMs like Uniswap, Curve, and DFX. It is designed to minimize slippage as much as possible considering pool liquidity and other factors.   

Slippage is often a self-correcting issue. Slippage incentives arbitrageurs to rebalance pools. They can swap the overvalued asset for the undervalued asset and make an easy return. The Stabull pricing curve is designed to incentivize Arbs to operate in the most functional way possible.

Additionally, the UI for Stabull is set up to provide transparent, accurate information on potential slippage. 

Users can set a maximum slippage to reduce any potential impact and ensure that a trader is not blindsided by a trade affected by high slippage.

Slippage is reduced by factors like increased liquidity. Individuals can also play an active role in reducing how slippage affects them by assessing slippage tolerance when trading.  More information on these systems can be found in the Stabull whitepaper—stabull-whitepaper-v1.pdf

Still need help? Check out our knowledgebase, ask one of our helpful community members on the Stabull Discord, or submit a ticket via our helpdesk to our team for help.

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