If you are choosing a slippage setting before a token swap, start low and widen it only when a clear execution need justifies the extra price risk. Slippage tolerance sets the worst output you agree to accept if the price moves before the swap completes.
What does slippage tolerance control?
For an exact-input swap, the setting creates a minimum output: the least amount of the token you will accept. If the swap would return less, the transaction fails instead of completing at that price.
Say a quote offers 1,000 USDC. A tolerance of 0.5% sets the minimum at 995 USDC; 2% lowers it to 980. The quote already reflects the route’s estimated price impact, so tolerance covers further movement between the quote and execution. Before setting it, check how ParaSwap weighs gas and output to understand the route’s estimated result.
Price impact is the effect your trade has on the quoted price; slippage is the change after that quote. Keeping them separate helps you spot a poor route instead of hiding it with a wider tolerance.
Which setting should you choose?
A tight setting protects your minimum output but can make a trade fail if the price moves. A wide setting is more likely to let the swap complete, but permits a worse result. I would begin with the app’s normal setting, then use a custom value only when the quote and market conditions support it.
- Check the pair and trade size. A liquid pair and small trade usually need less room for movement. A thinly traded token or large trade may move more before execution.
- Check the quote’s minimum output. Compare it with the expected output. If the minimum feels too low, reduce tolerance or choose a better route; do not accept it just to avoid a failed swap.
- Consider how long execution may take. Busy or fast-moving markets can change while a transaction waits. A tighter tolerance may fail more often there, but a wide limit can expose you to a worse fill.
What should you do after a failed swap?
If a swap fails because output fell below your minimum, first refresh the quote. A new quote may reflect changed prices or a better route. For example, if the old quote showed 1,000 USDC and a 995 minimum, but the refreshed quote offers only 988, widening tolerance to 2% would allow 980. That may make execution possible, but it accepts less.
Before changing the setting, check whether the token charges a transfer fee, sometimes called a tax. That fee can reduce what arrives, and some routes may not handle it correctly. Confirm the token and route are supported; blindly raising tolerance can allow a poor trade without fixing the cause.
A failed on-chain swap typically still costs a network fee, called gas, because the network processed the attempt. If the price has moved sharply, waiting for a steadier quote can cost less than repeatedly retrying.
How does this fit with ParaSwap?
ParaSwap can compare routes across liquidity sources, but a good quoted route does not remove the need for a sensible minimum output. Check the quote, expected output, and tolerance together before signing. A route that looks best on its estimate may still fail if prices move beyond your limit.
Choose the tightest tolerance that gives the trade a fair chance to complete; widen it only when you understand and accept the lower minimum output.