Slippage is the difference between:
The price you see when you submit your transaction, and
The price you actually get when the transaction is executed on-chain.
Because blockchains are not instant, and other trades can be included before yours, the final execution price can move a bit between the moment you click “swap” and the moment your transaction confirms.
Most DEXs let you set a maximum slippage tolerance. If the price moves more than that tolerance while your transaction is pending, the trade will fail instead of filling at a much worse price.
Price impact is related but different. While slippage comes from market movement while you wait, price impact is how much your own trade moves the price. The larger your trade relative to the pool's liquidity, the more you push the price against yourself.
In traditional AMMs, every trade — no matter how small — has some price impact because the price moves along a curve. This is an important distinction: slippage is external (other activity), price impact is internal (your trade size).
The important thing to remember is that you only know your real slippage after the transaction is complete. Before confirmation, the interface can show you an estimate, but the final price is only locked in once the trade is actually mined on-chain.
In HODLMM, slippage is tightly connected to bins and bin steps:
Each bin has a single fixed price.
When a swap is small enough to be filled entirely inside one bin, and there is enough liquidity in that bin, the trade executes at that exact bin price, with 0% price impact inside the bin.
Price Impactappears when a trade is large enough to cross multiple bins, because each bin sits at a slightly different price level.
So, in summary: slippage is the gap between your expected price and the final execution price — only truly known after the transaction confirms. In HODLMM, trades within the active bin execute with zero price impact. Higher slippage only appears when trades are large enough to cross into additional bins. This is why HODLMM can offer better rates than traditional AMMs.