Gold Rush Handbook | Rialto Partners with Robinhood Crypto to Target Order Routing Rights

Who will take on the routing orders for cryptocurrencies and tokenized stocks? Rialto bets on propAMM.

Written by: KarenZ, Foresight News

Once stock tokens are on-chain, the market will soon face a more specific question: how to create continuous, reliable, and reasonably priced transactions for these assets on-chain.

Rialto is addressing this layer. It defines itself as an on-chain spot exchange, supporting asset types such as crypto assets, stock tokens, ETFs, and commodities. However, what Rialto truly emphasizes is not just the "coverage of categories" itself, but also the pricing, market-making, routing, and settlement behind each order.

What is Rialto's background?

Rialto has come to the forefront in collaboration with Robinhood Crypto, Offchain, and Arbitrum. This combination essentially illustrates Rialto's position.

On the team side, Rialto team member Riley (@riley_gmi) has previously worked at trading-related institutions such as BlockTower, Arca, ASXN, and RockawayX. This background resonates with Rialto's product direction. Another team member, boccaccio, has worked at the crypto media and information platform Blockworks.

Additionally, according to a tweet posted on July 3 by Icebergy, a developer of the Telegram and Discord bot Whalebot Web3, he has joined Offchain, covering the venture capital department Tandem of Offchain Labs, the Arbitrum incubator Onchain Labs, and stated that he has been collaborating with Rialto for the past few months.

What is Rialto? How does its core mechanism operate?

Initially, Rialto only supports the Robinhood Chain network and has launched over 90 Robinhood stock tokens as well as major crypto assets on the Robinhood Chain. It is important to clarify here: users are trading stock tokens, not the original stocks in their brokerage accounts.

Its trading process can be condensed into three steps: quoting, sorting, and settling. After a user initiates an order, Rialto requests real-time quotes for that order size from all candidate liquidity sources, including propAMM and traditional DEX pools; it then sorts the net output after deducting network costs; finally, it atomically executes the winning path on-chain. An order either completes in full under the agreed conditions or is canceled. In specific circumstances, an order can also be split among multiple sources to achieve better results.

The core here is propAMM. Rialto defines propAMM as an on-chain market maker that quotes using its own inventory and pricing logic. The difference from common AMMs is that traditional AMMs primarily rely on pool balances and fixed formulas to form prices, while propAMM continuously references external markets to actively update quotes. For crypto assets, reference prices can come from order books of deeper liquidity exchanges; for stock tokens, reference prices can come from the main exchanges where the underlying stocks are listed.

Rialto further breaks down the quoting logic of propAMM. The first layer is fair pricing, where the latest oracle updates provide the contract with the current fair price of the trading pair, forming the optimal buy and sell prices.

The second layer is inventory management. One can think of propAMM as an automated market-making counter that holds two types of assets simultaneously, such as stock tokens and USDC. Market makers typically do not want one type of asset to pile up too much. If the stock tokens in the vault are already too many, the system will lower the quotes for users to continue selling stock tokens to the pool, making such trades less attractive; conversely, it will be more willing to let users buy stock tokens. In this way, the price itself becomes a tool for adjusting inventory.

The third layer is oracle updates. The slower the oracle updates, the greater the penalty on quotes, and the spread will widen with block delays to reduce the risk of outdated prices being arbitraged.

The fourth layer is the liquidity curve, where buy and sell spreads form near the fair price, and the depth gradually increases as it moves away from the midpoint, similar to the depth distribution in an order book.

Rivo Altus is Rialto's own propAMM, which will quote for stock tokens and cryptocurrencies and participate in competition as one of the candidate liquidity sources for each order. Rivo Altus will only become the final path if it provides the best execution result in a particular trade.

Additionally, Rialto has launched a partnership program that allows trading applications, terminals, bots, or agents to route order flows. Currently, Rialto's exchange API has been integrated by protocols such as Arcus, Index, and LI.FI.

Rialto's competitive edge is turning routing rights into trade quality

Rialto's competitive edge lies here. It places different liquidity sources at the same quoting table, re-evaluating each order. propAMM, Rivo Altus, and traditional DEX pools all speak through net output. Users do not need to judge which pool is deeper or manually compare paths; Rialto will complete the selection based on execution results.

Rialto mentions that aggregators will convert dispersed propAMM quotes into a single best buy and sell price and route the order to the source with the best quote, splitting orders if necessary to capture the optimal depth from multiple sources.

This is also where Rialto differs 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 is closer to the key position in the on-chain capital market.

Regarding fees, Rialto will display fees before users confirm transactions and include the fees in the final quote. Its trading fee is 0.50% (the platform fees for several trading pairs tested by the author are 0.1%). If users trade through third-party integrated entry points, additional integration fees may also apply.

Additionally, on-chain settlements will incur network gas fees, which are paid by the user's wallet for ordinary transactions. When using gasless trading, the relayer covers the network fees. If a transaction is canceled, the trading fee will not be charged, but the gas consumed by the submitted transaction is non-refundable. Gasless trading compensates for the experience aspect. Users can choose to have the relayer pay the network fees on their behalf.

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 of individual stock tokens mostly remains in the range of thousands to tens of thousands of dollars.

Summary

Rialto has specific things to prove in the future: whether the tradable assets on the Robinhood Chain can expand, whether Rivo Altus's quotes can remain competitive amid volatility, whether external liquidity sources are sufficiently rich, and whether the net output after routing can consistently outperform users' own search for trading paths.

If these questions are gradually validated, what Rialto is competing for is not just the trading entry but also the order routing rights. The on-chain market for stock tokens will not only be determined by the quantity of assets but ultimately return to each order: who quotes? Who executes? Who provides users with better results?