The most common mistake when assessing the liquidity of a trading instrument is to look only at the spread.
When the best bid and best ask are close, many people immediately conclude that the instrument is liquid.
In reality, the spread only tells you what the top layer of the order book looks like at a given moment and for a given order size. What really determines whether a larger order can be executed smoothly is how much depth sits behind those prices.
The SKHY comparison data is a textbook example.
Looking at the spread alone, SKHYB has the tightest spread of the three, at just 0.10 USDT, or approximately 0.06%. rSKHY’s spread is 0.31 USDT, or approximately 0.18%, roughly 3.1 times wider than SKHYB’s. SKHYON’s spread is wider still, at 0.99 USDT, or approximately 0.59%.
If you are only placing very small trades and comparing the top-of-book quotes at that particular moment, SKHYB does have the advantage.
But once you look further down the order book, the picture starts to change.
rSKHY’s top-tier depth is approximately 17,272 USDT, around 21 times that of SKHYB and 102 times that of SKHYON. The difference in trading volume is even more pronounced: rSKHY is approximately 3.8B, compared with roughly 6.89M for SKHYB and 146K for SKHYON.
In terms of overall depth and trading activity, rSKHY is clearly ahead.
Compared with traditional brokerages, traditional brokers trade the stock itself. Orders may be routed to different markets, trading venues, or liquidity providers. The best quote users see on screen does not necessarily show the full amount available for execution at each subsequent price level.
rToken, by contrast, is a tokenized product. What users see is the order book for that product itself. It can maintain a liquidity link to the real stock market.
If the value of rToken is going to be discussed, it should be discussed at the execution level, rather than stopping at the idea of "putting stocks on-chain."
The on-chain format addresses how the asset is represented and traded; liquidity determines how much it ultimately costs the user to complete a trade.
