The variant of SLIP with compression is called Compressed SLIP (CSLIP) . CSLIP, specified by RFC 1144, reduces 40 bytes of headers from the TCP and IP protocols (20 from TCP and 20 from IP) to anything between 3 and 16 bytes. It is the TCP header and the IP header that are compressed, not the data!
It’s possible to use the same TCP and IP header compression with the PPP protocol. In contrast to CSLIP (where both ends of the connection have to be configured for the header compression in advance), when using PPP, one end of the connection offers the possibility of compressing the header to the opposite end of the connection—if both ends agree, they will then use compression.