A list of frequently asked questions on the difference between RFQs and OBs.

What is a Request for Quote (RFQ) on Paradigm?

The Request for Quote (RFQ) method is used by traders to obtain price quotes from multiple liquidity providers for a large crypto derivative trade. This process is common in block trading or Over-The-Counter (OTC) markets. When a trader initiates an RFQ, they provide trade details, and liquidity providers respond with their respective price quotes. The trader can compare quotes and select the preferred counterparty to execute the trade directly between the parties without affecting the broader market.

What is a Complex Order Book (OB) on Paradigm?

A Paradigm Complex Order Book (OB) is a public collection of all buy and sell orders for a particular crypto derivative structure that traders can view to see the market demand and supply, as well as the price at which others are willing to buy or sell. The order book allows for partial executions by matching a portion of a trader's order with one or more available orders on the opposite side of the book, enabling execution against multiple counterparties. Large orders can rest on the book through a limit order and wait for execution.

Differences between RFQ and OB on Paradigm?

Structure seen by
Liquidity providers selected
All traders
Quotes seen by
Only creator
All traders
Execution style
All or none
Partials allowed
Can execute against multiple counterparties?
Creator can place a limit order?
Previously known as

Sample Scenarios

— I want to execute against a preferred counterparty.
RFQs allow you to send your structure to liquidity providers of your choice. It also allows you to see the desk which provided a certain quote.

— I want price discovery without showing my size.
OBs allow you to see generally where the market is pricing your structure. If the levels are good, you can execute directly on the order book or spin up an RFQ.

— I want to execute a large sized trade without showing my size or needing to reload.
OBs allow you to wait for size to build up enough for you to execute your desired amount.

— I have a structure that I want to trade without too many others seeing it.
RFQs allow you to select only the liquidity providers you are comfortable trading with.

— I’m not a liquidity provider, but I want to trade a structure at a defined level.
OBs allow you to submit a limit order at your level. Other traders can then execute against you at the level.

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