Plain English
Slippage tolerance is how much price drift you allow on a DEX swap before the transaction cancels. Set it to 0.5%, and if the price moves more than 0.5% between submission and execution, your transaction reverts. Too tight: trades fail. Too loose: MEV bots eat your lunch.
How it actually works
When you sign a swap, the wallet calculates an “expected output” based on current pool state. Between signing and inclusion (often 12+ seconds on Ethereum), the price can move from other trades, MEV ordering, or block congestion. Slippage tolerance defines the worst-case output you will still accept.
What it means for you
For liquid pairs at small sizes, 0.1–0.5% is plenty. For illiquid pairs or larger sizes, you may need 1–3%, but that opens a sandwich-attack window. The professional answer for size: use aggregators (1inch, Odos) that split routes across many pools, or use private RPCs (MEV Blocker, Flashbots Protect) that hide your trade from public mempools.
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Educational content only. Not investment, tax, or legal advice.