I have seen some commentary about orderbook vs RFQ. Some thoughts of mine as someone who’s quoted both:

1. RFQ is inherently taker only and as such you hit a limit with costs and cannot ever reach ultra low cost execution required for higher turnover strategies via making into positions.
2. Orderbook will generally be better cost for anything that isn’t explicitly ultra large size
3. RFQ can outperform in situations where the net risk of the position is significantly different than the gross risk. This is multi leg positions and options structures (you pay for the gross of the Greeks when executing in the book but pay for the net of the Greeks when executing RFQ)
4. When trading large size, as long as fills are not public you can effectively have an execution arbitrage, where the OTC desk executes the position at their execution cost and charges you a lesser cost than if you had used your own inefficient execution algorithms (like a basic taker TWAP) to execute the position.
Outside of cases where people are trying to take into large size or extremely large differences between gross and net risk RFQ does not compete with orderbooks and orderbooks should be preferred in regular cases.