A swap can have a large expected price impact even when its slippage tolerance is small. The first describes how the trade interacts with available liquidity; the second constrains how far execution may differ from the quote.
The protocol documentation separates the concepts
Uniswap’s developer documentation distinguishes price impact during a swap from price changes while a transaction is pending. It also describes minimum-output protection for exact-input swaps and maximum-input protection for exact-output swaps. Those constraints can cause a transaction to revert when execution would breach the user’s bound. Uniswap developer documentation — Swaps
Read the expected output before reading the tolerance
Consider an invented exact-input quote that exchanges 1,000 units of Token A for 970 units of Token B. Suppose a displayed 1% tolerance is implemented as a minimum output of 960.3 units of B: 970 multiplied by 0.99.
That bound applies to the quoted 970 units. It does not imply that the trade can lose only 1% relative to some external reference value. The quote may already incorporate fees and a sizeable effect from trading through the available liquidity. The tokens also need not have equal economic values.
If execution would return 965 units, the trade satisfies this assumed minimum. If it would return 955, the protection would reject the swap under the stated implementation. A rejected swap is not a successful conversion at the desired price; any transaction costs need their own review.
Changing tolerance from 1% to 5% would lower the illustrative minimum to 921.5 units. That gives execution more room, but does not improve the quote itself. Conversely, a very tight tolerance can increase the chance that changing conditions prevent execution.
Route comparisons should use the same input amount, output token identity and cost scope. A better displayed amount can be less attractive once route-specific charges are included. An interface percentage is useful only when the reader understands its reference amount and the exact constraint submitted to the contract.
Check the transaction, not just the display
Review the expected output, minimum output, token contract addresses, network and deadline before signing. Identify which costs are included in the quote and which are paid separately.
After execution, compare actual token movements and charges with the submitted constraint. This creates an auditable account of the swap. Neither a low tolerance nor a low-impact label, considered alone, establishes that a transaction is economical or suitable.