By TenderDog Team
If you have ever swapped a small token and received less than the quote promised, you met slippage. Understanding it is one of the most useful bits of DeFi knowledge.
How a liquidity pool sets the price
On a decentralized exchange there is no order book. Instead there is a pool holding two tokens, for example SOL and $TENDOG. The price comes from the ratio between them. When you buy $TENDOG you add SOL and take $TENDOG out, so the ratio shifts and the price moves up.
The size of that move depends on how big your trade is compared with the pool.
Why small pools amplify everything
In a deep pool, a trade is a drop in the ocean. In a shallow one it is a wave:
- A buy of the same size pushes the price up much more.
- A sell of the same size pushes it down much more.
- Even a few big trades can change the price noticeably in minutes.
At the time of writing $TENDOG has a few thousand dollars of liquidity across its pools, so orders of a few hundred dollars already matter. That is the reality of a young community token.
Price impact vs slippage
- Price impact is how much your own trade moves the price. The swap screen shows it before you confirm.
- Slippage tolerance is the maximum worse price you accept between clicking and the transaction landing, because other trades can happen in between.
Practical tips
- Start small. Make a small first swap and look at the price impact it reports.
- Split big orders. Several small swaps usually get a better average price than one large one.
- Keep slippage tight. Very high tolerance (10% or more) is how bots take value from you.
- Check the contract address every time. See the buying guide.
Why this matters for the games
Because the market is small, paying tokens as prizes for every game would put steady selling pressure on the price. That is one reason the Arcade focuses on in-game perks first; read more in how TenderDog will handle rewards.
Educational content, not financial advice.
Solana Ecosystem