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I am trying to understand the difference between read based and contig based alignment. Is contig based alignment refer to de novo assembly and then it is align to a reference genome. I am confused that if you have read based alignment then what is the importance of aligning contigs on the reference.

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I have never heard the term “contig based alignment”, and your question is the only Google hit of this exact query (apart from a 2012 patent application).

That said, and without knowing the exact context, I am assuming that you are essentially right: contig-based alignment probably refers to the de novo assembly of reads into contigs, which are then aligned into a scaffold by use of a reference.

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