Compare price impact and slippage on CEX and DEX with Marsbase calculator
Every transaction carried out with any asset changes its value to some extent. That is why the total of the transaction at the creation and execution time can be very different. There are two factors that negatively affect the transaction price, as well as the asset as a whole.
These are price impact and slippage.
Slippage is the difference between the value of a trade at the time of its creation and its final execution. This happens on CEX - centralized exchanges due to the difference in prices for buying and selling and the amount of available liquidity at certain prices in the order book.
The price impact happens due to the limited liquidity available for the transaction. The exhaustion of available liquidity significantly reduces the price of an asset and results in the loss of money on any transaction associated with it.
This is especially true for large transactions of hundreds of thousands or millions of dollars. There are a lot of such transactions in the crypto market, and they take place every minute.
In the new DeFi niche, liquidity problems are more obvious. Sometimes a $50k or $100k dollar trade is enough to make the token rate fluctuate by 10-15%.
If you have ever lost money on large trades in liquid assets or on small trades in illiquid assets, then you will probably be interested to know how to save money on this and how much potential losses you can avoid without affecting the market price.
Now you have the opportunity to compare in real time the conditions for transactions on Marsbase dOTC with those presented on the top CEX and DEX exchanges (Huobi, Binance, Uniswap etc.)
We present you Marsbase Smart Calculator. It will take into account not only the final cost of buying / selling, but also display the price of gas per transaction, as well as the average commission of exchanges.
- To get started, select the trading pair that interests you. Let's say it's LOOKS/USDT.
- Specify the number of tokens you plan to exchange.
- Click "Calculate".
- The calculator will show the potential losses on the CEX and DEX, taking into account slippage, the impact on the price.
As can be seen from the example, the losses on a centralized exchange in such a transaction will be simply gigantic. 40% of the total trade volume will disappear. Instead of half a million dollars, you will receive a little over $300,000.
There will be smaller losses on the DEX. But keep in mind that there is less liquidity on DeFi exchanges, which means that such a large deal will greatly affect the price of the token. Most likely, the price impact will be even higher and entail more serious consequences for the price: a negative mood of the token community and even a panic sale due to a huge liquidity drain.
- Once you understand how much is lost on CEX/DEX, try comparing these terms with Marsbase. Click on Compare with Marsbase. Next, you will see the following window.
Here you can set a different size discount. Even the biggest discount will be much more advantageous for you. This way you will attract more bidders who will buy up the offer at a price much lower than the market price. And you will not lose as much as you would spend on CEX or DEX. In addition, you avoided panic in the token community.
- Feel free to switch to the Marsbase platform and trade without huge losses.