TLDR: LI.FI now recommends the right slippage tolerance for each swap based on the tokens involved and live market conditions, enabling integration partners to reduce transaction failures while protecting users from unnecessarily wide slippage settings.

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Traditionally, slippage has been treated as a static parameter in our industry – set once as a blanket setting for all types of transactions based on predetermined assumptions. This is the easy way to do it technically, but is it the right way? Arguably not.

This is because of a simple fact: markets are dynamic, and slippage tolerance needs to be dynamic as well, based on several different factors that make up each transaction – the tokens involved, transaction size, chains, underlying liquidity providers, and the settlement blockchain, among others.

This static approach to slippage is one reason many transactions fail or users lose unnecessary value to slippage, as market conditions change rapidly while their slippage settings remain static.

Today, we’re introducing Smart Slippage on LI.FI to overcome this problem.

Instead of relying on a fixed slippage setting, LI.FI uses live market data to recommend a slippage tolerance based on the tokens involved in the transaction and their current market behavior.

As a result, we’re already seeing fewer failed transactions, better price protection for users, and overall more reliable execution with the Smart Slippage feature enabled across select partners.

What this means for enterprise teams

Smart Slippage gives enterprise teams a more intelligent way to manage one of the fundamental tradeoffs in swap execution.

Instead of choosing between a conservative slippage value that may cause transactions to fail and a wider value that unnecessarily increases users' exposure to price movement, partners can use a recommendation calibrated to the transaction in front of them.

This enables teams to:

• Reduce failed transactions – Smart Slippage is already showing meaningful improvements over the static approach. In testing, Smart Slippage reduced transaction failures by up to ~75% for long-tail tokens. Even for highly liquid assets, Smart Slippage produced double-digit percentage reductions in transaction failures.

• Protect users from unnecessarily wide slippage – Incorrect slippage settings are an unwanted tax that users pay for poor execution. Smart Slippage improves execution quality and helps prevent users from unnecessarily losing value to the market.

• Adapt slippage settings automatically as markets change – Teams don’t need to monitor current market conditions and update their slippage settings accordingly. The Smart Slippage feature takes care of that automatically.

Built into LI.FI routing

Smart Slippage is built directly into LI.FI's routing infrastructure and works across both same-chain and cross-chain routes.

LI.FI continuously tracks market signals for supported tokens, including recent differences between quoted and executed amounts and changes in onchain prices. These signals are used to determine an appropriate slippage recommendation based on the token's execution profile and current market conditions.

Partners remain in full control of how the recommendation is used. They can use LI.FI's recommendation, incorporate it into their own execution logic, or continue providing their own slippage value. If a partner specifies a slippage value themselves, LI.FI respects it and does not override it.

Smart Slippage does not change how LI.FI ranks routes or determines the quoted output. It adds another layer of smart execution to how that quote is ultimately executed.

Smart Slippage is now available for your enterprise team

Smart Slippage is available as a smart execution capability for LI.FI's enterprise partners and can be enabled per integration.

If you want to improve your user experience and transaction reliability with fewer failed transactions, get in touch with us through your team’s primary communication channel with LI.FI (whether Slack or Telegram), and enable Smart Slippage for your users today.

About LI.FI

LI.FI is the universal liquidity layer trusted by more than 1,000 enterprises to unlock unified market access to digital assets.

LI.FI reduces the complexity of building digital asset products by orchestrating liquidity across permissioned and permissionless venues, powering stablecoin and RWA flows across more than 60 chains through a single integration.