Slippage, Spread and Network Fee Explained

Every exchange quote hides three separate costs. They are often blamed on each other, so it helps to see what each one really is.

Spread

The spread is the gap between the price at which the market buys an asset and the price at which it sells. It is the compensation of whoever provides liquidity, and it widens on thin pairs and quiet hours. A rare token against a rare token will always show a wider spread than a major pair.

Slippage

Slippage is the change in price between the moment you accept a quote and the moment the trade actually executes. It grows with volatility and with the size of the order relative to available liquidity. A fixed rate removes slippage for you by moving that risk to the service.

Network fee

The network fee is paid to the blockchain, not to the exchange. Neither side controls it: it rises when the chain is busy and falls when it is idle. This is why the same swap can cost noticeably more at some hours than at others.

Reading a quote with all three in mind

When two services show different numbers for the same pair, the difference usually sits in the spread and in which network fee they assume. Comparing the final received amount, not the headline rate, is the only fair comparison.