Liquidity, slippage & “Insufficient Liquidity”

Liquidity, slippage & “Insufficient Liquidity”

When you swap a Stablebond on-chain, the price you get can differ slightly from its “official” value — especially on larger orders. This article explains why that happens, why it usually isn’t what it looks like, and how to avoid paying more than you need to.

Two prices: underlying value vs. market price

• Underlying value (NAV). Every Stablebond has a net asset value that comes from the underlying government bond, published through a price feed. Because Stablebonds are reward-bearing, this value rises over time as yield accrues — that is expected, not a glitch.

• Market price. On Stellar, Base, Polygon, and Monad, swaps are filled from market liquidity (pools). The pool price can drift slightly above or below NAV based on supply and demand at that moment.

What slippage is

Slippage is the difference between the price you expect and the price your trade actually executes at. In a pool, a large order moves the price against you — this is called price impact. The thinner the pool relative to your order, the bigger the impact:

• A large buy can temporarily push the pool price above NAV.

• A large sell can temporarily push it below NAV.

A price wobble is not the backing breaking

This is the most important point. If a pool price moves a few percent after a big trade, the Stablebond’s backing and NAV have not changed — only the pool price moved, and only temporarily. Arbitrage typically brings the pool price back in line with NAV shortly afterward.

Selling in a panic at a temporarily depressed pool price simply locks in the slippage as a real loss. Before reacting to a price move, check the Stablebond’s NAV / quoted value — if NAV is steady, the backing is fine.

The “Insufficient Liquidity” message

This means the pool doesn’t currently have enough depth to fill your order at an acceptable price. You can:

• Try a smaller amount.

• Wait for more liquidity to become available.

• Use one of the lower-slippage routes below.

How to avoid slippage (especially on large orders)

• Check the quote first. Review the price and any price-impact figure before confirming a swap.

• Split large orders into smaller pieces rather than one big ticket into a thin pool.

• Buy and redeem at NAV. Buying or cashing out through the on-ramp / off-ramp, or purchasing/redeeming on Solana, prices off NAV and is not subject to pool slippage. See How on-ramps & off-ramps work and How on-chain purchases & redemptions work.

• For very large size, contact support about an OTC option.