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Research field guide

AMM price impact versus slippage tolerance

Price impact is a consequence of trading against the current liquidity curve. Slippage tolerance is a limit supplied to a transaction; it does not remove expected impact.

A worked distinction

For a constant-product pool, output depends on reserves and fee-adjusted input. Setting tolerance to 1% does not turn a trade with 3% expected price impact into a trade with only 1% impact. It constrains how far execution may move from the quoted output.

What to verify in your own analysis

Verify the route, reserve snapshot, fee tier, minimum received and gas cost. The basic constant-product model does not describe concentrated liquidity across multiple ticks.

Write down the market or protocol identifier, units, observation window and data source before comparing outputs. Keep unavailable values distinct from zero. Capture a baseline and change one assumption at a time so the resulting difference can be explained.

Use the linked working tools

Open the related tools below to inspect actual public observations or calculate a local scenario. The numerical example above is illustrative, not a current quote. Export the result together with its assumptions if you need a reproducible research record.

The review checklist records what you checked in this tab. Completion measures your own notes, not whether an investment is safe, suitable or profitable.

Primary documentation

Research review record

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