Understanding Slippage in Automated Market Makers: A Unified Deviation Framework and Survey

As a major cost in decentralized asset swapping, slippage is commonly measured as the relative deviation between realized and expected outcomes. However, existing studies adopt different benchmarks, leading to ambiguity in terminology and the positioning of prior works. We propose a unified deviation-based framework for understanding slippage, which reconciles existing definitions and enables further developments. Within this framework, the overall deviation can be decomposed into two components: endogenous deviation, arising from the swap itself, and exogenous deviation, which is induced by intervening swaps during the latency period. We review the existing literature along with the two components, covering their theoretical properties, further decompositions, and mitigation approaches. Finally, we outline several directions for future research.