Archived tweet

Tweet by Martin Grabina:

After today's unfavourable $50M swap on our interface, there's a lot of confusion around slippage I'd like to clarify: Slippage is the tolerance buffer on a market order: how much the final fill price can deviate from the quoted price due to market movement between signing and execution. On the Aave interface, suggested slippage is algorithmically calculated from asset pair volatility and order size. Since we offer both market orders (with adjustable slippage) and limit orders, our slippage and fee estimates are tuned for execution time. Users can always tighten it (or set limit amounts) and will typically get a surplus back thanks to @CoWSwap 's auction mechanism. In this case, the user sent a market order with the suggested 1.21% slippage. But the core issue wasn't slippage, it was just the accepted quote with 99% price impact: As you can confirm it yourself on the CoW explorer, the order includes a quote field showing the original rate (50M USDT -> <140 AAVE) presented to the user before fees and slippage. It was already a very bad rate. All the interactions were also verified via internal analytics, and the user even received a 0.7% surplus, confirming the swap mechanics worked exactly as intended. Thanks to our open-source nature, anyone can reproduce this. So, the price impact warning was displayed. The checkbox was checked, sadly. While we're working on stronger guardrails for all our users, we'll always believe in permissionless DeFi. Tweeted at 18h