

lctrader
76 posts




We need to stop with this nonsense of crowning RFQs over Orderbooks. I’ve written about this before but once more wanted to share Orderbooks like Lighter are venue for Price Discovery; where the price is set. The price is based on supply and demand. RFQ models like Variational is a venue for Price Taking. It literally copies the price from elsewhere; physically cannot offer better pricing than the venue it hedges on without taking directional risk. Simple math: RFQ Price = Source Price + Hedging Fees + Profit. Actually, Variational isn't even a competitor to Hyperliquid/ Lighter; it is a customer of them when you check deep. There is also the Last Look problem: - In orderbook: If you see a price and click buy, you get filled. The engine is neutral, in Lighter's case it's proved by ZK that you get the fill you intended. - In RFQ: You request a price. The MM (or OLP) looks at your request, looks at the market, and then decides if they want to take the trade. If you are profitable, the RFQ engine can simply start rejecting your quotes, can delay them or giving you worse pricing. So please stop crowning RFQs. Most they can become an aggregator of actual trading venues.



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