By: KarenZ, Foresight News
Once stock tokens are on-chain, the market will soon encounter a more specific problem: how to establish continuous, reliable, and reasonably priced trading for these assets on the blockchain.
This is precisely the layer Rialto is targeting. It defines itself as an on-chain spot exchange, supporting asset types such as cryptocurrencies, stock tokens, ETFs, and commodities. However, what Rialto truly emphasizes is not just "category coverage" itself, but also the quoting, market-making, routing, and settlement behind each order.
What is Rialto's Background?
Rialto came into the spotlight in the context of its collaboration with Robinhood Crypto, Offchain, and Arbitrum. This combination essentially explains Rialto's position.
Regarding the team, Rialto team member Riley (@riley_gmi) previously worked at trading-related institutions such as BlockTower, Arca, ASXN, and RockawayX. This background aligns with Rialto's product direction. Another Rialto team member, boccaccio, previously worked at the crypto media and information platform Blockworks.
Furthermore, according to a tweet on July 3rd by Icebergy, developer of the Telegram and Discord bot Whalebot Web3, they have joined Offchain, working across Offchain Labs' venture arm Tandem, the Arbitrum incubator Onchain Labs, and stated they have been collaborating with Rialto for the past several months.
What is Rialto? How Does Its Core Mechanism Operate?
Initially, Rialto only supports the Robinhood Chain network, having already listed over 90 Robinhood stock tokens and major cryptocurrencies on Robinhood Chain. It needs to be clarified here: users trade stock tokens, not the original stocks in brokerage accounts.
Its trading process can be compressed into three steps: quoting, routing, and settlement. After a user initiates an order, Rialto requests real-time quotes from all candidate liquidity sources for that order size, including propAMMs and traditional DEX pools; then sorts them based on net output after deducting network costs; and finally atomically executes the winning route on-chain. The order is either filled completely under the agreed conditions or canceled. Under specific circumstances, a single order can also be split among multiple sources to achieve a better result.
The core here is the propAMM. Rialto defines a propAMM as: an on-chain market maker that quotes using its own inventory and proprietary pricing logic. Its difference from common AMMs lies in that traditional AMMs primarily rely on pool balances and fixed formulas to form prices, whereas propAMMs continuously reference external markets to actively update quotes. For crypto assets, reference prices can come from order books of more liquid exchanges; for stock tokens, reference prices can come from the primary listing exchanges of the underlying stocks.
Rialto further breaks down the quoting logic of propAMMs. The first layer is the fair price. The latest oracle update provides the contract with the current fair price for a trading pair, from which the best bid and ask prices are formed.
The second layer is inventory management. One can think of a propAMM as an automated market-making counter, holding two assets simultaneously, such as stock tokens and USDC. Market makers typically don't want one asset to accumulate too much. If the vault's stock tokens are already on the high side, the system will lower the quote offered to users for selling more stock tokens to the pool, making such trades less attractive; conversely, it will be more willing for users to buy stock tokens. In this way, the price itself becomes a tool for inventory adjustment.
The third layer is oracle updates. The slower the oracle update, the larger the quoting penalty, with spreads widening as block delays increase, to reduce the risk of outdated prices being arbitraged.
The fourth layer is the liquidity curve. Bid-ask spreads form around the fair price, with depth gradually increasing further away from the mid-price, similar to depth distribution in an order book.
Rivo Altus is the propAMM operated by Rialto itself, providing quotes for stock tokens and cryptocurrencies, and participating in the competition as one of the candidate liquidity sources for each order. Rivo Altus only becomes the final route if it provides the best execution outcome for a given transaction.
Additionally, Rialto has launched a partner program, allowing trading applications, terminals, bots, or agents to route order flow. Currently, Rialto's swap API has been integrated by protocols such as Arcus, Index, and LI.FI.
Rialto's Competitive Edge: Turning Routing Rights into Transaction Quality
This is where Rialto's competitive advantage lies. It places different liquidity sources on the same quoting table, re-comparing them for each order. propAMMs, Rivo Altus, and traditional DEX pools must all speak with their net output. Users don't need to judge which pool is deeper or manually compare routes; Rialto makes the selection based on execution results.
Rialto mentions that aggregators convert scattered propAMM quotes into a single best bid/ask price and route orders to the source with the best quote, splitting orders when necessary to access the optimal depth from multiple sources.
This also distinguishes Rialto from ordinary trading frontends. The value of ordinary frontends lies more in entry and display, while Rialto emphasizes order execution. Whoever can discover better quotes and organize multiple liquidity sources comes closer to a key position in the on-chain capital market.
Regarding fees, Rialto displays fees before users confirm the transaction and includes them in the final quote. Its trading fee is 0.50% (according to the author's test on several trading pairs, the platform fee is 0.1%). If users trade through third-party integrated entry points, additional integration fees may be added.
Furthermore, on-chain settlement incurs network Gas fees. For regular transactions, these are paid by the user's wallet. When using Gasless transactions, network fees are covered by a relayer. If a transaction is canceled, the transaction fee is not charged, but the Gas consumed by the already submitted transaction is non-refundable. Gasless transactions address the user experience aspect. Users can choose to have a relayer pay the network fees.
According to the latest data from Rialto's official website, ETH is the most actively traded asset on the platform, with a 24-hour trading volume of approximately $128 million. In contrast, the trading volume for individual stock tokens mostly ranges from tens of thousands to hundreds of thousands of dollars.
Summary
What Rialto needs to prove subsequently is quite specific: whether the tradable assets on Robinhood Chain can expand; whether Rivo Altus's quotes can remain competitive amidst volatility; whether external liquidity sources are sufficiently abundant; and whether the net output after routing can consistently outperform users finding their own trading paths.
If these issues are gradually validated, what Rialto is competing for is not just a trading entry point, but order routing rights. The on-chain market for stock tokens won't be determined solely by the number of assets; ultimately, it comes down to each order: Who quotes? Who fills? Who delivers a better result for the user?
