Slippage

In markets with good liquidity, such as BTC and ETH, traders can trade with no slippage.

But for ARB, UNI, DOGE, and other altcoins markets, there is slippage, which increases with the transaction volume.

Slippage is affected by two variables: 1. The maximum single transaction amount of the trading pair 2. The maximum slippage allowed for the trading pair. The slippage of each transaction is calculated below:

Slippage of a transaction = The maximum slippage allowed for the trading pair x (Transaction amount / The maximum single transaction amount of the trading pair)

For Example:

Let's say ARB is currently priced at 1 USDC. Assuming the maximum single transaction amount of ARB/USDC is 1,000,000 USDC, the maximum slippage allowed for ARB/USDC is 1%.

At this time, Alice placed an order of 100,000 USDC. The slippage for this order is 0.01 x 100,000 / 1,000,000 = 0.001. That is, the average price for Alice to long ARB is 1 USDC x (1 + 0.001) = 1.001 USDC and the average price for Alice to short ARB is 1 USDC x (1-0.001) = 0.999 USDC.