Can someone explain to me slippage and/or liquidity on new coins?

So I’m trying to purchase Novo on Pancake swap. It’s a new coin so most people on discord are saying to set slippage to 6% and use BNB to NOVO I’m wondering if I’m losing any coins by using different coins? For instant when I try transferring USDT to Novo it works just fine when set to 6% slippage and a nice whole number it goes through.

However it’s commonly said to use BNB to NOVO as that’s where the liquidity is. I guess my question is, how beneficial is it to use BNB over another coin? I feel like I’m saving money by skipping the fee with USDT -> BNB swap but am I really? Thanks In advance for anyone who helps. Just trying to understand the back end workings of how these things work especially when investing in lesser known coins.

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1 thought on “Can someone explain to me slippage and/or liquidity on new coins?”

  1. *Slippage*

    * Slippage is simply setting the minimum amount of coin that you’ll accept from a trade. Because prices can change after you submit a transaction, slippage is unavoidable, and you must specify the fewest number of coins you’ll accept for the txn to go through.

    Example: I am trying to buy 1,000 XYZ coins for $1000 XYZ coins. Right after I hit “Submit”, the price jumps to $1.25. Now, by the time my transaction is ready to process, my $1,000 can only buy 800 XYZ–I will lose 20% to slippage. If my slippage is set lower than 20%, Pancakeswap will cancel the transaction.

    * If you were trying to buy 1,000 XYZ coins, setting slippage to 5% means that you won’t accept less than 950 XYZ for the transaction to go through. A slippage of 10% sets the minimum to 900 XYZ, 20% means 800, etc.

    * Pancakeswap (or any DEX) will always get you the best deal possible. Setting 20% slippage is simply telling Pancakeswap “don’t let the transaction go through unless I receive at least 80% of the coins that Pancakeswap told me I would receive.”

    * Slippage only happens in the form of a loss. You don’t need higher slippage to receive *more* value than what Pancake is showing you.

    * Multi-hop swaps (i.e. BNB -> USDT -> XYZ) mean more opportunities for slippage to occur.

    * **If you’re trading shitcoins, the vast majority of slippage is caused by taxes.** Looking at NOVO, it defo looks like a shitcoin. To answer your question, the slippage from USDT -> BNB is negligible; the 6% slippage is mainly the result of NOVO’s taxes.



    * **Liquidity** is two piles: one of BNB, and one of the coin that the BNB gives value to (for our example, XYZ). If you remove the pile of BNB, the pile of XYZ no longer has backing, and becomes worthless. This is a rugpull.

    * A network’s native currency is what backs a coin’s value. On the Ethereum network, that’s ETH, on Solana it’s SOL, etc.

    * When you buy XYZ, you add to the BNB pile and take from the pile of XYZ. When you sell, you put your XYZ back, and take the equivalent value in BNB. Buys and sells change the ratio of BNB to XYZ, which changes XYZ’s price.

    * The smaller the pile of BNB is, the more effect buys and sells have on the price. A 1 BNB buy/sell changes the BNB to XYZ ratio of a 3 BNB pile much more than it does a 100 BNB pile.

    * Too small of a BNB pile and your price will be very volatile. Too large and your price will stagnate, because even large buys/sells change the ratio very little.



    As a sidenote, I make my living on shitcoins, so no judgement, but beware: you will lose your ass on shitcoins ten times over before you ever turn a profit. It takes months and months of learning how things work and how to read the blockchain, but it’s not just knowledge–it’s connections and culture and scams and stress and honeys and heartache and I don’t recommend it to anyone.


    Save your wallet and your sanity, stick with alt coins. Hit me up if you have questions.


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