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    50. THORChain: Swap n' Slippage

    By definition, slippage is the difference between the price you expect to get on the crypto you have ordered and the price you actually get when the order executes. But in crypto, most of the assets are highly volatile thus the executed price will be different from quoted and expected price. Low liquidity in pool also will cause high slippages which is why we're seeing high slippage on large swaps. In this dashboard, we will investigate the swap size and how it can affect the slippage percentage.

    First, we will take a look at the average slippage percentage by USD amount of swap for the past 30 days. From graph below, we can see that the slippage percentage increase exponentially with logarithmic increase of swap size. For swap size below $100 USD, there is basically zero slippage which mean users will get almost exact the quoted price and slippage is at 6% for swap of over $1M USD. But there is only 1 swap of over 1M for the past 30 days.

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    Graph below shows the slippage percentage by swap size and also by different pool. We can see that slippage percentage are different for different pool even in same swap size.

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    Let's take a look at how liquidity of different pool affects slippage percentage. For this section, we will take a look at swap size of 1000-10,000 USD and average slippage for past 7 days. We will use the liquidity balance of pool for today.

    Scatter graph below shows the slippage percentage against the liquidity of the pool. We can see that the slippage decreases exponentially as liquidity balance increases.

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    In conclusion, the higher the swap size will cause higher slippage percentage. Other than that, the larger the liquidity of the pool, the lower the slippage percentage will be.