Slippage happens when the actual price of a trade differs from the price expected by the trader. It is the gap between what was anticipated and what actually occurs during the trade execution. It occurs due to the rapid and volatile nature of digital asset markets, where prices can change rapidly between when a trade is initiated and when it is executed.

Slippage is encountered when purchasing or selling digital assets. When buying, slippage can result in a higher purchase price than initially expected. On the other hand, when selling, slippage can result in a sale price that is lower than what was initially anticipated. This discrepancy is primarily caused by the insufficient market depth to fulfil the trade causing the market's movement. The factors that contribute to slippage in blockchain trading include market volatility, low liquidity, trade size or/and order execution speed.

Traders and investors should be aware of slippage as it can affect the profitability and execution of their trades. By setting appropriate price limits, using limit orders, or employing advanced trading strategies, traders can minimize the impact of slippage and improve the accuracy of their trade executions.