Reef Finance AMA Recap with the Binance Community

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On the 28th of December, 2020, Denko Mancheski, CEO of Reef Finance, was live at the Binance English Telegram group, to provide the community with insights on what Reef Finance is all about, and also attend to their questions and queries. The session was moderated by one of Binance Community Telegram moderator.

In order to ensure clarity to my readers, this article has been divided into two segments; the first segment, gives full account of the questions asked by the moderator of this AMA session (Gajender), while the second segment gives account of the questions asked by Telegram community members.

SEGMENT 1

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Gajender — Hello chat and welcome to a special AMA with the Reef team! It is my pleasure to introduce to you Denko Mancheski, CEO of Reef Finance.

Denko Mancheski —

Its a pleasure being here!

Gajender — So its our pleasure to have you among us. Can you give the audience an introduction about yourself and the story behind Reef?

Denko Mancheski —

The best way to learn about me is through an interview we published recently. I think it also contains certain ideas that others might find useful.

My name is Denko, I am the CEO of Reef Finance. I have a tech background myself. Started programming in early high school with C++ and did algorithmic competitions for a few years. Then I decided to start building commercial software and I joined an ERP provider where I built modules which are still used to this day (warehousing, accounting, etc.). After that I joined into one of the biggest healthcare platform providers in Europe (200m+ valuation now). Worked there for over 2.5 years and I led a team where we worked on a complex modeling tool for healthcare data.

Around 6 years ago I got into crypto and started blockchain development myself. My first experience was with the NXT blockchain which turned into Ardor. Of course, I did a lot of solidity throughout this time. I also did some Bitshares, Steem as well as EOS.

Since I am based on Slovenia, the development community is not so big, so I’ve been working with familiar people. 2 years ago we teamed up and worked on multiple blockchain as well analytics projects together. In January this year we decided to focus on DeFi and started building Reef.

Regarding the origin story, it would be best to check out the blogpost that we have created. I think it’s a great read and one can learn new things beyond Reef.

Gajender —

Awesome and thanks for sharing those links with us! Can you explain briefly what Reef is and the value it provides to the end-user?

Denko Mancheski —

Definitely! In short, Reef is a DeFi operating system — a permission-less smart liquidity aggregator and yield engine where any financial hub can integrate into. Powered by Polkadot, it shares its security model with the ecosystem, and enables cross-chain integrations across top DeFi protocols. Reef gives the retail investor access to the DeFi landscape with a very low technical barrier of entry while at the same time it augments the decision making process based on user’s risk levels.

Basically, You don’t have to worry about jumping to 5 different websites and making a decision where your funds should flow. Based on your risk levels you will be able to participate with ease and will not have to follow the rapid changes in this landscape yourself. On top of that, you get to stake the Reef token which is farmed through your yields, so you can further compound your gains.

Basically, Reef abstracts away the complexities of using order books and learning how different DeFi protocols work. Just like Robinhood app gives access to the retail user to the traditional financial landscape (derivatives, option chains, etc..), Reef gives access to the DeFi landscape and tokens and additionally augments the decision making process based on user’s risk levels.

Shortest explanation: A one-stop place where anyone can quickly invest into DeFi taking into account their risk tolerance. Here is also the link from the Binance report

Gajender — Excellent, that was easy to understand — thank you very much. Can you give us more details about your competitive advantages and positioning? What make Reef special？

Denko Mancheski —

Most of the protocols are financial primitives. They are very important and they serve a certain role in the whole ecosystem. Reef’s infrastructure is composing and integrating on top of the ecosystem. Being non-custodial and cross-chain as well as powered by AI analytics engine makes Reef unique.

Since Reef is cross-chain, we got the flexibility to integrate with multiple ecosystems. Currently, most of the DeFi activities are on Ethereum and BSC, so we will be supporting those ecosystems initially, and very soon after, we will add support for Polkadot, Avalanche and Kava. The interoperability layer allows us to have the first mover advantage and give the users access to all the new instruments in different ecosystems.

Regarding the product positioning and our target customer: Both existing crypto users as well as users who have never participated in DeFi. Users which are already invested will be able to wrap their positions in a basket so they get optimization/ rebalancing/ reallocating ideas and easy access to their portfolio.

New users are able to better understand what they are getting into and calibrate their portfolio based on their risk tolerance. Since Reef is one layer above the current DeFi protocols, we believe that our infrastructure will have a high TVL amount. It’s important to understand that we are not going to deploy financial primitives ourselves — you will be investing in other DeFi protocols through Reef.

Gajender — Thanks for the very comprehensive explanation. How is the token Economy of Reef designed? What are the utilities of Reef’s token?

Denko Mancheski —

I would like to explain both the utilities of the token and also the income streams that the Reef ecosystem is generating — those things are tied together and ensure the project is sustainable over the long run

Regarding the token utility:
The reef token is a governance token, so the users will be able to vote on different proposals (releasing new features, readjusting certain parameters in the system, etc.). Besides governance, the token is powering our infrastructure, so you can pay the protocols fees with it. It can also be used to stake into the Reef pool and get RPTs (Reef Pool Tokens), but it’s also going to be used in the yield distribution mechanism (customizable payout ratio for the yield that the basket generated), which will allow the user to farm the Reef token through their yields and directly stake it into the pool

Regarding the income streams:
The ecosystem currently has 3 income streams: Basket engine, protocol fees and interest paid by power users who borrow tokens from the Reef pool in order to increase their voting power. All the 3 income streams are currently flowing in the Reef pool. In the future, through voting, we plan to introduce Reef Treasury which will be the recipient of the income streams, and the DAO can further decide how to allocate the funds (eg: grants, buybacks, etc.)

Gajender — Thanks. Having sustainability as a priority is a great plan. How is Reef token distributed? Can you share more details of how a user can acquire the token?

Denko Mancheski —

Reef is on Binance Launchpool and it’s in the farming stage currently (over 385m$ locked in the farms). For the first time ever one can farm REEF with DOT since we are the first Polkadot project on Binance.

In the next 30 days one would be able to farm through Binance, and on Tuesday 29th 6:00 AM UTC we start trading on Binance so users will be able to acquire the tokens there (USDT and BTC pair will be live). After the launchpool farms finish, we will introduce our own timelocked farms and LP farms which will be another way to acquire the token.

• The release schedule and tokenomics can be found here
• We’ve also created a Guide
• You can learn how to farm on Binance through this video.

Gajender — Thank you Denko! It was great getting to learn more about you and Reef.

SEGMENT 2

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Community Question 1 — Where does the APY for betting on Reef pools come from? In addition to the Reef Pool APY, will users get returns generated by the Smart Yield Growing Engine? What role will Reef Treasury play in all this?

Denko Mancheski —

Through the basket engine, you are exposed to the DeFi activities that are part of the ecosystem. Basically you come, you pick your rick levels, and you get in. The basket engine itself generates revenue when the user exists the basket — there is no fee, but through your exposure you can basically take a % of your profits in REEF token. The revenue that the basket keeps will initially flow to the uniswap pool, but soon after we will introduce Reef Treasury so the DAO can decide where the funds flow — we can give grants or sponsor development of certain open source modules for Polkadot, etc.

Community Question 2— What is protecting the capital pool from hackers? Could you tell us about security of the liquidity?

Denko Mancheski —

Reef is completely non-custodial, so everything can be tracked and seen on the blockchain (we will provide tools which will allow easy monitoring). We finalized the first audit, one more coming soon. We also have programatic limits which will gradually increase. Security is our #1 priority.

The report from the first audit can be found here.

Community Question 3— The DeFi space is very young and is changing rapidly. My question is, how flexible are your tools to adapt to changes in the DeFi crypto space??

Denko Mancheski —

Reef being cross-chain gives us flexibility, which means we are able to shift our product and features based on where the users are (currently on Ethereum) and what the users want/need in the future. We have experience with establishing mechanisms to validate which things are interesting for the users and which are not. Initially we are launching based on what we think is very necessary atm, but in the future the product will be shaped based on what the users want and need.

Community Question 4— What types of problems is Reef trying to solve ?

Denko Mancheski —

Reef gives the retail investor access to the DeFi landscape with a very low technical barrier of entry while at the same time it augments the decision making process based on user’s risk levels. We will be integrating FIAT gateways immediately, so we will be able to start onboarding non-crypto users. Besides the easy onboarding, we will provide proper education so they get to understand how this landscape works and what are the risks around it.

Community Question 5— What is business model of your project? How it works? and

Who are your potential customers and which markets are you targeting on?

Denko Mancheski —

Sustainability is our number 1 goal. When we were designing Reef, our goal was to create income streams which will help the project become sustainable over the long run. As we’ve seen the projects that survived the bear markets really thrived in this season. Reef is a long-term project and all the runway and roadmap is adjusted based on this.

Community Question 6— Why did Reef choose to build on Polkadot ecosystem? What is the advantage using Polkadot for Reef?

Denko Mancheski —

Polkadot’s parachain communication (XCMP) and bridging mechanism, combined with the possibility to run solidity code on parachains such as Plasm, use native Ethereum addresses and huge ecosystem support (Web3, Parity) were the reasons why we chose to build on Polkadot. Reef being cross-chain gives us flexibility, which means we are able to shift our product and features based on where the users are (currently on Ethereum) and what the users want/need in the future.

Community Question 7— What is your priority when developing the REEF ecosystem?

Denko Mancheski —

Our priority is to onboard existing crypto users as well as new users. Our goal is to become the main gateway to the whole DeFi landscape. Just like Robinhood app gives access to the average user to the traditional financial landscape (derivatives, option chains, etc..), Reef gives access to the DeFi landscape and tokens and additionally augments the decision making process based on user’s risk levels.

Community Question 8— Can you list the most important features of $ REEF that put it ahead of other competitors? What is your competitive advantage that you trust most in your project?

Denko Mancheski —

Most of the protocols are financial primitives. They are very important and they serve a certain role in the whole ecosystem. Reef’s infrastructure is composing and integrating on top of the ecosystem. Being non-custodial and cross-chain as well as powered by AI analytics engine makes Reef unique.

Community Question 9— Crypto people say that the next boom will on NFT after the Defi, Do you agree with this? And what are the plans of Reef Finance to build on NFT concept/Technology ? Any future idea about NFT?

Denko Mancheski —

Actually, REEF will have a basket through which one can invest into different NFTs!

Community Question 10 — Why the Reef Intelligence Engine is an Off-chain Oracle? There not better option be On-Chain? Why you decided keep It away?

Denko Mancheski —

Initially, the intelligence engine will be off-chain because there is a lot of data and a lot of high-frequency processing. The moment we are able to deploy our solution in a decentralized cloud (eg: Crust.network) we will move the whole infrastructure there.

Community Question 11— Can you provide an overview of your tokenomics? Will the design of the token increase and decrease with the success of the platform, does it include any scarce pathways, such as equity, storage, or burning?

Denko Mancheski —

Yes, the way the Reef token and the Reef pools are designed, its all about a positive feedback loop and reduction of the supply. More details on how the mechanisms work can be found on our blog.

Community Question 12 — What initiatives are you taking to keep all users to stay with your project for the longterm?

Denko Mancheski —

Real utility — a product that they would love to use.

Community Question 13 — What needs to be done to ensure that users support the Reef project in the long term, and not just for temporary profit? How do you plan to increase user engagement with your products and Reef capabilities?

Denko Mancheski —

Most of our current activities are involving community engagement such as quiz and giveaways. Shortly after product launch, besides building activities around the product (such as trading competitions, wrapping competitions), we are also working hard on educational content as well as tackling the non-crypto users. As I mentioned in the earlier questions, our goal is to become the main gateway through which users’ funds flow into the DeFi landscape.

Community Question 14 — How do holders of the token benefit in the ecosystem? Why should people care to own a $REEF?

Denko Mancheski — We are initially releasing the Ethereum and BSC version, and shortly after we are focusing on Polkadot, Kava and Avalanche. We will be present on pretty much all the polkadot parachains which have DeFi activities.

Community Question 15 — Currently attracting real users and mass Adoption is a problem for Blockchain projects. So how will $REEF solve this problem?

Denko Mancheski —

Yes, this is one of our bigger goals. We will be integrating FIAT gateways immediately, so we will be able to start onboarding non-crypto users. Besides the easy onboarding, we will provide proper education so they get to understand how this landscape works and what are the risks around it.

Community Question 16 — How many people are working on to develop Reef?

Denko Mancheski —

DeFi currently faces the fragmentation problem. A growing number of DeFi activities as well as different ecosystems (you need multiple wallets, etc). Reef is basically 1 layer above this and its goal is to abstract away the complexities, augment the decision making process and degragment the landscape — hence the name “Reef”.

Community Question 17— What kind of terms & conditions are there registering on Reef DeFi’s platform?

Denko Mancheski —

You will always be able to use Reef just with just a metamask wallet. The moment we integrate CEX liquidity, if the user wants to have access to it, certain KYC procedures will have to happen. We will not be storing user’s data at any point in time. The KYC procedure regarding CEX liquidity will flow from the user’s machine directly to the prime broker.