Coin Review — Reef
Reef is a cross-chain DeFi operating system built on Polkadot, something which it claims to be a first of its kind. I already did a review on Polkadot (link up in the corner) where we discussed its ability to use cross chain information and requests… using parachains.
The system has a seamless user interface and it offers its users a smart liquidity aggregator and yield engine. This is an important differentiating factor between it and other cryptos, as it enables trading with access to liquidity from both Centralised Exchanges AND Decentralised Exchanges, whilst at the same time providing a mechanism for smart lending, borrowing, staking and mining. All this is done via its AI driven personalized Reef Yield Engine.
This is exciting for a couple of reasons. Let me explain. There is a debate between which is best, the centralized exchanges which are isolated and prone to hack, or the DEXes which sometimes have no liquidity and are often difficult to use. There is also a fragmentation problem within the DeFi ecosystem, which means that users are required to manage multiple addresses on multiple platforms, and in order to access their assets and data, they need to navigate to these platforms individually. It becomes a bit of a minefield.
But Reef solves these issues, because of its “smart liquidity aggregator and yield engine”. This is all secured under Polkadot’s shared security model, which ensures high resilience and forkless upgradability.
And, I love that this project has been developed on DOT..
You mentioned the reef smart engine — what’s that?
The Reef Smart Yield Engine is its own system that works to create ‘baskets’ of currencies which users can invest in. This gives the opportunity for cross-chain investments whilst earning stable yield rewards. The clever thing here is that the Smart Yield Engine is machine learning and AI-powered. Users also have flexibility and control around the amount they invest and the duration tokens are staked. Past user behavior is then used to “teach” the AI, and the Yield Engine uses this learning to back the baskets of currencies users are invested in.
What about the coin itself — anything I need to know?
Well, it has certainly caught peoples attention. In a private sale that was held in September 2020, Reef Finance were able to raise $3.9 million, with the token selling at an initial price of approximately $0.001. Following this, the token then began trading in December at the price $0.02792 per token. This provided some short term gains for those with a private sale allocation and left many smiling.
The token itself has four key functions within the overarching Reef ecosystem.
Firstly is Governance, meaning that the REEF coin can be used for voting on proposals for updates and changes to the parameters within the protocol.
The second is Protocol Fees. This allows REEF tokens to be used for paying fees for various processes, including reallocation and rebalancing of assets.
The third key function of the coin is staking. Users are able to stake reef tokens into different liquidity pools, meaning that they are able to earn interest with varying rates of annual percentage yield.
And the forth and final function relates to yield distribution. This means that holders of reef tokens are able to decide the payout ratio of any profits they make.
There is another thing worth mentioning, and that is that although REEF is listed on a number of crypto exchanges, unlike other main cryptocurrencies, it cannot be directly purchased with fiat money. To buy the coins you first need to buy Bitcoin, ETH or USDT and then transfer to the exchange that offers to trade this coin.
So should I buy?
Well, that is an interesting and timely question. The price of REEF cryptocurrency dropped sharply last week and it lost in excess of 22% of its value in just 30 minutes. This occurred after Alameda Research and the crypto exchange FTX called REEF a “rug pull’ coin.
This was all pretty messy, and happened after REEF Finance are alleged to have turned their back on an OTC trade which had been previously agreed upon with Alameda Research. This claimed OTC trade corresponded to a previous announcement by REEF Finance, that Alameda Research would be investing $20 million into the protocol. The initial announcement saw a huge increase in the Reef tokens price, but following Alamedas claims this week the price fell again with dramatic effect.
It all turned very ugly very quickly, with both sides calling each other out in public and blaming each other. It ended following a tweet from Alameda’s trader Sam Trabucco in which he explicitly stated that Alameda is not affiliated with Reef and that he does not recommend anyone to do business with Reef.
Eek — that is not good!
No it isn’t, but its not all bad news. Whilst the price of the reef token fell by about 30% following the spat, it has since recovered and is currently trading down by about 3%, at $0.04
I should also point out that we cannot say for sure which party is at fault here, and although there is nothing to say that Reef did anything wrong, the drama and market volatility it created was less than ideal.
Who is behind the coin?
The main man and CEO is Denko Mancheski. Denko has been in and around the blockchain and cryptocurrency industry for over 6 years as a developer — and during that time he has worked with a number of leading technologies including NXT blockchain, Bitshares, Steem as well as EOS. The team he has put together for Reef have a long history of working together, which has in turn created strong relationships and synergies. They claim to have significant experience and expertise building trading algorithms and analytic tools for crypto firms as well as creating software that runs blockchains.
There has clearly been ups and downs with Reef finance and the reef coin, but this isn’t specific to them, and similar bumps are seen on most crypto journeys. The thing that appeals to me about Reef is that the Reef Finance team is very engaged with its own community and they can already point to a number of initiatives that have proven their success in building a strong global following. This engagement and success, alongside the array of partnerships, promotions, and integrations they have incorporated, mean that I am optimistic about their long term future, and I see that Reef Finance are well positioned to bring mass adoption to DeFi.
I really hope that you have found this coin review of the Reef coin to be both helpful and informative. Please do take a moment to share your thoughts about the token down below, and of course, if you have any questions that I haven’t answered, then please do let me know in the comments section.
Thanks for reading my blog, and I will see you in the next one!