Slippage is the difference between the price a trader expects when placing a trade and the actual price at which the trade executes. Slippage occurs because token prices in liquidity pools change as trades are executed against them.

Higher slippage is more likely for large trades relative to pool liquidity, or for tokens with low liquidity. DEX aggregators like Jupiter minimise slippage by routing trades across multiple liquidity sources.

Slippage tolerance is a setting in most DEX interfaces that specifies the maximum acceptable price difference between expected and executed price. If slippage exceeds the tolerance, the transaction fails.