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- Slippage - an unexpected change in price that occurs between order initiation and execution (confirmation).
- Price impact - a predictable change in price caused by all orders depending on order size, direction, and available liquidity.
- There is no price impact while adding and removing liquidity.
- Oracle/index price is used to calculate token values while adding and removing liquidity.
- Slippage may occur when adding or removing liquidity due to:
- Change in mark price
- Mark price reflects the ratio of tokens in the pool. If the ratio in the pool changes, the ratio of tokens you add/receive will change.
- Change in oracle price
- Applies when removing tokens. When you add liquidity, if a portion of your liquidity is in base token (ETH, BTC, etc.), you must pay back these borrowed tokens when removing liquidity. If the oracle price changes during your transaction, slippage will result.