Slippage & Pricing

Price on DotSwap is determined by the liquidity curves advertised by Makers (Nexus Nodes) and DotSwap LP. When a Taker’s swap intent consumes depth from these curves, the execution price can move—this movement is slippage.

How Price Is Calculated

1. Curve‑Based Quote   Nexus Engine aggregates CPMM and CLMM curves into a single depth‑by‑price book.

2. Path Selection   Engine chooses the cheapest mix of Makers to satisfy the trade size within the Taker’s slippage tolerance.

3. Post‑Trade Price   Execution moves the pool reserves, shifting the marginal price up or down, depending on direction.

Slippage = Impact + Volatility

• Impact Slippage — Price movement caused by the trade’s own size relative to available depth.

• Market Volatility — External price drift between quote issuance and on‑chain confirmation.

Slippage Guard in PSBT

To protect Takers, Nexus Engine embeds a slippage‑guard output:

• If the final receive amount < (min amount) defined by user tolerance, the transaction becomes invalid.

• Cancels swap automatically; funds remain unspent.

User Controls

Parameter	Default	Notes
Slippage %	9 %	Adjustable per intent (1 % – 50 %).
Fee Ceiling	Dynamic	Engine rejects any route exceeding cap.

Pricing Examples

Model	Formula	Example
CPMM	x*y = k	1 BTC swap vs 100 BTC/10 k ORDI pool → ~10 % impact
CLMM	P = Δy/Δx within band	Same swap within tight band 120–130 DOG/BTC → ~1 % impact

Best‑Price Routing

• Engine may split orders across multiple Makers to minimise total slippage.

• Preference given to deeper CLMM bands; CPMM serves as fall‑back liquidity.

Takeaway: Takers can trade confidently knowing their maximum price drift is enforced on‑chain, while Makers compete to provide the tightest spreads.