Blockchain & Cryptocurrency Glossary

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Request for Quote (RFQ)

1 min read
Pronunciation
[ri-kwest for kwoht]
Analogy
Like asking multiple mechanics for estimates before choosing where to get your car repaired.
Definition
A trading model in which a client solicits price quotes from liquidity providers, who respond with firm offers for specified asset amounts.
Key Points Intro
RFQ systems streamline bespoke order execution in decentralized markets.
Key Points

Quote solicitation: off-chain request specifying asset pair and size

Firm pricing: providers return signed offers with expiry times

Atomic execution: smart contracts enforce fill-or-kill logic

Latency trade-off: more precise pricing at the cost of additional round trips

Example
A large token swap on the 0x protocol uses RFQ to obtain competitive quotes from market makers before execution.
Technical Deep Dive
Clients send RFQ payloads via REST or WebSocket APIs. Relayers broadcast to liquidity providers, who compute prices using order books or AMM formulas and return signed EIP-712 limit orders. On-chain settlement smart contracts verify signatures and execute swaps atomically, reverting if not filled.
Security Warning
Stale or cancelled quotes can cause failed transactions or unfavorable fills if not managed properly.
Caveat
RFQs are ideal for large orders but introduce latency and off-chain dependencies compared to pure on-chain swaps.
Related Terms
Request–Response Model
Relayer Network

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