Price Slippage

Price Slippage refers to the difference between the expected price of a token after a trade and the actual price received after the trade is completed. It is affected by the overall movement of the market. The minimum amount received from a trade is determined by the market price and the user-set slippage limit. When using the USDFI dApp, the market price offered will be based on the slippage limit, with a default setting of 0.50%.

Two main factors can contribute to Price Slippage:

a) Liquidity: Some tokens and token pairs have low liquidity due to low demand, resulting in a high difference between the lowest asking price and the highest bid. This can cause a dramatic change in price when a trade is executed.

b) Price Volatility: Tokens with high price volatility can experience rapid and unexpected changes in price, which can impact the market for that token.

You can adjust your slippage at your own risk using Settings Menu. The Settings Menu provides experienced users with the option to make high slippage trades. High slippage trades may lead to a lower exchange rate when swapping tokens, resulting in lower returns. Despite this, experienced traders may choose to override the default settings as they believe they can achieve a high rate of return from the trade, even with the potential losses.

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