What Is Reef (REEF)?
Reef is a Reliable Extensible Efficient Fast Layer-1 Blockchain for DeFi, NFT & Gaming. Built using Substrate Framework, it provides high scalability, enabling almost instant low-cost transactions, and supports Solidity and EVM, allowing developers to seamlessly migrate their DApps from Ethereum without any change in the codebase.
Reef Chain is the most advanced EVM-compatible blockchain. It’s self-upgradable and has on-chain governance. Its infrastructure also allows for EVM extensions which allows for native token bridge, scheduled calls (ie. recurring payments), and smart contract in-place code upgrades. In the near future, it will support additional VMs which will allow developers to write code in multiple programming languages. The network runs on a Nominated Proof-of-Stake (NPoS) consensus mechanism, which offers scalability and low fees.
REEF is the native token that is used for:
- Fees for processing transactions and storing data.
- Running validator nodes by staking REEF tokens.
- Nominating which validator nodes should be part of the network.
Reef is backed by multiple leading funds and venture capitalists including NGC, QCP, Bitcoin.com, Kenetic Capital, LD Capital, TRG Capital, Krypital Group, Genesis Block, Woodstock Fund and others.
Reef Chain development tools include:
- Remix and EVM integrated development environments for uploading and deploying smart contracts.
- Reefscan blockchain explorer to assist with deploying validators, bonding and nominating validators, debugging contracts, and understanding network performance.
- Reef command line tools that allow developers deploy applications from local environments.
- Reef wallet for accessing and interacting with the blockchain
Who Are The Founders Of Reef?
Reef was founded by Denko Mancheski. His motivation was to build the most advanced blockchain for retail investors who want to get involved with DeFi, NFTs and Gaming.
Mancheski wanted to help cryptocurrency newcomers overcome the complexities associated with interacting with a blockchain and understanding new concepts such as DeFi and NFTs. Additionally, the ability to give access many bridges to other blockchains so that funds and liquidity can easily be ported to Reef Chain, allowing retail investors to take advantage of high scalability and low fees.
Born in Macedonia, Mancheski said that his passion for FinTech led to him being introduced to blockchain technology. He has described forming a competent team as the biggest challenge associated with bringing Reef to life.
When asked about the personal attributes that will help him become a successful entrepreneur, he added: “I have a very addictive personality — I just can’t stop doing something until I get to the goal that I set for myself.”
What Is The Reef Blockchain?
Reef is a blockchain for DeFi purposes built on a substrate — a blockchain template or framework — launched in May 2021. After several updates and version releases, it has shown its potential as a major player in the DeFi, NFT and gaming ecosystems. It’s a brainchild of Reef Finance, established by Denko Mancheski, and its name is an acronym of its key traits: Reliable Extensible Efficient First layer blockchain.
The Reef chain offers self-upgradability, on-chain governance, scalability, low fees, and EVM extensions that bridge native tokens. Its self-upgradability feature is powered by smart contracts installed on the network. Reef’s validation process is based on thenominated proof of stake (NPoS) consensus mechanism.
The Reef ecosystem has expanded from being a DeFi Layer 2 operating system, running on the Polkadot network as a parallel chain, to developing its Ethereum virtual machine (EVM)-compatible blockchain and offering a DeFi operating system.
Not only is the Reef network warming up to take its seat as a major player in the DeFi space, but it’s also set to revolutionize decentralized finance as a whole. Currently one of the most advanced EVM-integrated development environments, Reef is ready to take DeFi to the next level with its cross-chain abilities.
The Reef ecosystem comes after other big-name DeFi blockchains have helped it identify areas for improvement, work on them, and develop a better system. Reef chain offers decentralized application (DApp) developers the opportunity to build on a cheaper platform.
How Does Reef Finance Work?
Reef Finance is a cross-chain blockchain platform that is designed to pull liquidity from many sources, which is how the system facilitates cross-chain trading across different DeFi platforms such as Aave, Uniswap, Synthetix, and Compound. This is how Reef Finance enables users to find the best possible yield rates while stabilizing liquidity on the network. Cross-chain connections with other DeFi platforms is enabled through the use of the Reef Basket Engine, which contains the Reef Intelligence Engine and the Reef Smart Yield Engine.
The Reef Smart Yield Engine is designed to create baskets of digital assets that users can invest in while earning a yield, powered by artificial intelligence and machine learning for advanced automation. Users can trade and stake their tokens, while keeping full control. The Reef Smart Yield Engine contains features that facilitate democratization, decentralization, and community-driven governance. It offers support for staking, multiple assets, liquidity farming, integrations, and insurance.
Introducing Reef chain
Key Features Of The Reef Ecosystem
Nominated Proof of Stake
Blockchains that utilize the PoS mechanism experience fewer energy issues than ones that use PoW — e.g., Bitcoin. PoW requires nodes to solve cryptographic puzzles requiring specialized machinery. Hence, a lot goes into purchasing these machines to perform the calculations, known as mining, and a substantial amount of electricity is also consumed in the process.
The energy that Reef consumes is comparable to that of a shopping mall. In comparison, Bitcoin alone consumes more energy than the country of Poland. With the effects of climate change, and calls for a reduction in nonrenewable energy consumption, blockchains that utilize the PoS mechanism are likely to lead the way into a decentralized financial future.
Ethereum Virtual Machine Compatibility
Reef chain utilizes the Solidity programming language. Solidity is an object-oriented programming language (OOL) used by the EVM (among others) to develop smart contracts. Since it’s compatible with the system, it enables developers of DApps on the Ethereum network to import their DApps to the Reef network without having to rewrite the code.
A feature that isn’t present on Bitcoin or Ethereum is the ability of Reef chain to upgrade and develop itself. The development of blockchain has been stunted because of the difficulty of its upgradability, whereby the blockchain has to be stopped and a new one created, known as a hard fork.
Some cryptocurrencies have tried to incorporate efficient development processes through governance models, which move toward centralization. Ethereum, however, allows for upgrades through its dynamic development team, but its highly decentralized users have hampered the integration of useful updates. With the advent of on-chain upgradability, higher versions of the blockchain can be developed without major disruptions to its functioning — and without sacrificing its decentralized nature.
Note: Figures below are accurate as of this writing, and are approximated up to two decimal places where applicable.
Total Supply — 18.2 billion REEF
Circulating Supply — 18.2 billion (100% of total supply)
Market Capitalization — $163 million
24-Hour Trading Volume — $42 million
Market Price — $0.009 per REEF token
What Makes Reef Chain Unique?
Reef is geared towards cryptocurrency newcomers, alongside existing DeFi users who find it difficult to keep up with maintaining funds and wallets across multiple blockchains. The team has tackled the high gas fees seen on the Ethereum blockchain by building on Substrate, which enable almost instant transactions and low costs, where some claim Ethereum’s fees renders DeFi protocols “unusable.”
What makes the Reef chain unique is that any DeFi protocol that has already deployed on Ethereum or an EVM-compatible network can run on Reef with just a few changes to the code. Since Reef Chain straddles this intersection between Ethereum and Polkadot, along with bridges to other blockchains, the Reef ecosystem can be accessed by anyone with a Web3 wallet that is interested in accessing dApps on Reef.
Because of how it has been built on Substrate, Reef is extensible and can have support for multiple VMs (Virtual Machines) as well as extension for existing popular VMs such as EVM (Ethereum Virtual Machine). It has on-chain upgrades functionality so any new features are easily pushed through the networking layer, but also on-chain governance.
How Is The Reef Chain Network Secured?
Reef uses a Nominated Proof of Stake system to bond to potential validators, nominate potential validators, and to secure the Reef network. This allows for low cost, almost instant transactions with finality achieved in 10 seconds on average.
For those without the technical skills to run a Validator node, they can be a Nominator. Nominators secure the Reef Relay Chain by selecting good validators and staking REEF.
Being a Validator requires technical expertise, staking REEF, and running a node 24 hours a day, 7 days a week, 365 days a year with high availability. Validators that cannot maintain performance or up time have their stakes slashed, as do their Nominators.
While REEF are staked by nominating a Validator, they are ‘locked’ (bonded). Nominators can receive new REEF in their wallet, but cannot stake as a Validator or transfer REEF away from their wallet. Nominators can un-nominate at any time to stop staking their funds, which becomes effective in the next era. Un-nominating does not automatically unbond funds. There is an unbonding period of 28 days on Reef before bonded funds can be transferred after issuing an unbond transaction.
Right after its launching in September 2020, Reef has med a tremendous growth. The network has established several partnerships with many large firms and protocols. Through these partnerships, Reef has been able to get more exposure which attracted more potential users. Some of the partnerships include:
- Polkadot – As Reef’s native network, Polkadot enables Reef to interact with other chains seamlessly. In cases of congestion in those chains, Polkadot helps the Reef network will scale through.
- Binance – Through its brokerage integration, Binance enables fiat on the ramp for buying digital assets within Reef. In addition, the blockchain empowers opportunities in Reef for decentralized trading. Also, Binance featured the first Launchpool staking for the network’s REEF tokens.
- Chainlink – As of the best oracles of our times, Chainlink offers Reef a great quality-price feeds that the project uses to leverage.
- OpenDefi – Custodians who hold insured assets or physically backed assets can tokenize them on OpenDefi. Through its partnership, Reef users can stake their assets to get instant loans. They can also receive yield opportunities through their staking.
- Unifi Protocol – by creating and linking multi-chain Defi Marketplaces, Unifi powers cross-chain trading. This enables Reef users to earn interest as they transact.
- Equilibrium – Equilibrium facilitates the liquidity aggregation for Reef. This is Equilibrium as a cross-chain money market joins lending pools and synthetic asset generation.
- Manta Network – Manta is a price-stable and cross-chain Defi network that gathers liquidity. It enables Reef users to access unlimited liquidity pools. This confirms Reef’s feature as a liquidity aggregator.
- OpenOcean – This trading platform, through its initiative on ‘Zero gas fee,’ made a tremendous impact on Reef traders. The traders received a refund for the fees they spend for trading on REEF tokens.
- Kava – Kava is a project that runs on the Cosmos ecosystem that allows interoperability. Kava boast of yield availability within its platform. Through interoperability Kava allows Reef users to tap into its yield opportunities.
The Reef team constantly updates the official Roadmap of the protocol. To get more information about the protocol, you should visit the official Medium page of Reef.
Through qualitative plans and establishment from the company, Reef has accomplished several successes after its launch.
Some of the accomplished Roadmap by Reef include the following:
- Updated Landing Page.
- Legal Structure Setup.
- Ethereum Defi protocol Integrations.
- Defi Classification Indexer.
- Reef Litepaper.
- Reef Aggregation Layer.
- Binance Launchpool.
- Reef Farms.
- Analytical Engine Indexers.
Reef Finance achieves this through the use of the ‘Basket Engine’. The Reef Basket Engine is composed of the ‘Reef Intelligence Engine’ and the ‘Reef Smart Yield Engine’ (explained below). This allows anyone to earn a yield on their staked tokens. Furthermore, the Basket Engine combines intricate protocols to enable easy mining, borrowing, and lending services for users of Reef Finance.
Reef Smart Yield Engine
The Reef Smart Yield Engine creates ‘baskets’ of currencies for users to invest in. This creates the opportunity for cross-chain investments whilst earning stable yield rewards. The Smart Yield Engine is machine learning and AI-powered. Users have full flexibility over the amount they invest and the duration tokens are staked. User behavior determines the methodologies that the Smart Yield Engine uses to back the baskets of currencies users are invested in.
There are five features to the Smart Yield Engine enabling Reef Finance to become a decentralized, community-governed all-in-one DeFi app. These are staking support, liquidity farming, multi-asset support, insurance coverage, and integration compatibility.
The Smart Yield Engine will search the vast DeFi landscape looking for the best liquidity yielding opportunities available for its users. The Smart Yield Engine will be able to support various types of digital currencies, including stablecoins, hybrid tokens, and synthetic tokens. Additionally, the protocol enables automatic staking for users investing in Proof-of-Stake tokens. Moreover, Reef Finance has partnered with several insurance projects to provide financial cover for its users. These projects include Opyn, Etherisc, and Nexus Mutual.
Naturally, the price of assets will fluctuate. Therefore, to maintain a consistent yield, adjustments and rebalancing are needed to optimize the distribution of user assets. This cross-chain DeFi Yield Engine is made possible thanks to the interoperable functionalities of the Polkadot ecosystem. Another key element needed for the Reef Smart Yield Engine to operate is the Reef Intelligence Engine.
Reef Intelligence Engine
The Reef Intelligence Engine is an off-chain oracle sourcing data for the on-chain DeFi proxy smart contract. The Intelligence Engine monitors relevant financial data in real-time, including asset price, on-chain data, and liquidity pool activity. This information is then used to update the criterion of risk-reward models. In turn, micro-adjustments are made in the Smart Yield Engine, rebalancing the baskets of financial assets.
The two engines are combined to create the Reef Basket Engine, which works under the hood rebalancing and allocating assets with yield automation. Further to fluctuations in asset price, the other key factor that determines the Basket Engine protocol is user behavior. Reef Finance is personalizing the DeFi user experience whilst synonymously optimizing user asset allocation.
Why Use Reef Finance?
Reef Finance is positioned to make it simple and easy for anyone to interact with decentralized borrowing and lending protocols. Also, Reef aims to solve the liquidity problem faced by many crypto exchanges. Centralized exchanges (CEXs) are isolated silos with a single-point-of-failure and can be susceptible to hacks and bans. Furthermore, decentralized exchanges (DEXs) and CEXs often experience unstable liquidity. When making a large trade or swap on an exchange with low liquidity, it can often push up the price of the asset you’re buying. Furthermore, some new users find DEXS difficult to navigate from a technical perspective and they can seem slow and arduous compared to CEXs.
The Future Of REEF Cryptocurrency
Reef cryptocurrency seeks to solve one of the significant issues in Defi, which is interoperability. The Reef is able to leverage on this advantage to continue building with different L1 protocols, both private and public chains, opening for plenty of liquidity for Reef. The platform also has plans to develop ETFs and automated tickers in the future.
The development of the Reef network has been impressive since its launch. In 2020, the Reef ecosystem entered into over 20 partnerships, with more coming this year.
The notable alliances include those with Kava, Covalent, Matic, Bluzelle, and Chainlink. The Reef’s integration with Binance Access API will open the door for fiat ramp cryptocurrency purchases along with decentralized trading opportunities within their network.
Earlier this year, the Reef ecosystem entered into another partnership with OpenDefi, a platform that works by permitting the tokenization of insured and physically backed real-world assets held by custodians. Users can access a loan in the network by staking their assets and enjoy yield opportunities.
Furthermore, the Reef network also collaborated with another top platform, Manta Network, cross-chain privacy devoted Defi platform and price-stable DEX.
In March, the Reef ecosystem joined forces with Elrond, a high-performance blockchain platform for developing Dapps. In the same March, the Reef network also launched their LIT/REEF staking bond.
Another notable investment also came into the ecosystem when Alameda Research invested $20 million into Reef finance by purchasing Reef tokens in the month.
In the Reef Chain ecosystem, we can also see numerous goals that they have set to achieve in the year. All these show that the platform is poised to change the Defi ecosystem. The various Reef price predictions for the year and beyond also agree that Reef will likely be a good investment in the future.