What Role Do Liquidity Providers Play in the Crypto RFQ Process?

Liquidity providers, also known as market makers, are the core of the RFQ process. When a trader requests a quote, multiple liquidity providers compete to offer the best buy or sell price for the requested asset.

They use their own capital and sophisticated pricing models to provide these firm quotes. By doing so, they absorb the risk of the trade and guarantee execution at the quoted price for a short period, ensuring the trader can execute their large order efficiently and with minimal price impact.