Hi piperflyer,
That’s because SkyDemon reports height above MSL via GPS, NOT Altitude, which has to be based on barometric pressure. PilotAware uses a combination of GPS and Barometric pressure so that it can accurately report Relative Altitude* between aircraft using only PAW and those transmitting Mode C, Mode S or ADSB via a transponder (or CAP1391 devices such as SkyEcho). If we only used GPS, relative altitude from a transponder to your PAW could be ‘out’ by several hundreds of feet.
*Relative Altitude is the difference in altitude between your own aircraft and any other reported traffic, and needs to be consistent whether that traffic is reporting via GPS, transponder, or transponder derived ADSB.
For a fuller explanation please see page 77 of the current SkyDemon User Guide (available on the SkyDemon website)..
Regards
Peter