What is Auto-Slippage?
The Auto-Slippage feature on BroccoliSwap is a game-changer, especially for those who are new to the crypto trading scene. Here's a simplified breakdown of what it does and why it's beneficial:
What is Slippage?
Slippage in crypto trading refers to the difference between the expected price of a trade and the price at which the trade actually executes. Markets move quickly, and prices can change in the blink of an eye, especially in volatile crypto markets. When you're trading, especially in large amounts or in less liquid markets, slippage can significantly impact the cost and outcome of your trades.
The Challenge of Setting Slippage Tolerance Manually
Traditionally, traders have to set a slippage tolerance manually when placing an order. This is a percentage that indicates the maximum price change you're willing to accept for the trade to go through. Setting this tolerance too low might result in failed transactions during volatile market conditions, as the actual price exceeds your tolerance. Conversely, setting it too high might lead to less favorable trade prices.
How Auto-Slippage Works
BroccoliSwap's Auto-Slippage feature automates the process of determining the ideal slippage tolerance for each trade. It takes into account several factors that can affect the execution of your trade, such as:
- Liquidity Provider (LP) Fees: The fees charged by liquidity pools for facilitating your trade.
- Swap Type: Whether your trade is happening within the same blockchain (same-chain) or across different blockchains (cross-chain), which can affect the complexity and cost of the transaction.
- Token Fees: Any additional fees associated with the specific tokens you are trading. By analyzing these factors, Auto-Slippage dynamically adjusts the slippage tolerance to ensure that your trade is executed under the most favorable conditions possible. This means you're more likely to have your trade executed close to the expected price, without needing to worry about the technicalities of setting slippage manually.
Benefits for Traders
- Simplicity: Removes the guesswork and need for technical understanding of market conditions.
- Efficiency: Increases the likelihood of trade execution at desirable prices, even in fast-moving markets.
- Cost-effectiveness: Aims to minimise unnecessary costs by optimising the slippage tolerance.
In essence, Auto-Slippage on BroccoliSwap makes trading more accessible, especially for newcomers, by automating a complex part of the trading process. This feature ensures that users can focus more on their trading strategies rather than worrying about the technical nuances of each trade.
For information about monitoring Auto-Slippage and manually changing slippage on BroccoliSwap, read our guide "Adjusting slippage on BroccoliSwap"