Reef: Fundamental Analysis

With DeFi bursting on the scene, users are suffering the same problem of a lack of interoperability and simplicity.

Thankfully, there is a project that removes all the frustration of users to interact with a number of different applications all at once. The Reef Finance platform provides a simple interface that allows the users to interact with all their preferred DeFi applications at once and on one platform.

What is Reef Finance?

Reef Finance is a liquidity aggregator and a non-custodial multi-chain smart yield engine that is powered by Polkadot. The network shares its security model across various DeFi protocols while allowing users to access them without having to switch from different applications, one after another. These cross-chain integrations make De-Fi a lot easier for the masses.

Launched in September of 2020 and co-founded by Denko Mancheski, Reef Finance is a product that anyone can use to trade easily on the platform. Reef uses an interface that is beginner-friendly and allows retail investors to easily access DeFi without significant technical barriers.

What Does Reef Finance Do?

Reef Finance acts as a one-stop-shop for DeFi projects with the ability to diversify a portfolio in a single click. This gateway to DeFi not only aids in the decision-making process but also combines the liquidity of different DeFi projects' markets. The project appeals specifically to those who are new to the De-Fi game and are afraid of making mistakes. Reef intends to resolve these issues with its promised easy-to-use solutions.

The reef has three major functions. These are:

• Global Liquidity Aggregator

• Smart Yield Farming Aggregator

• Smart Asset Management

Global Liquidity Aggregator:

Being a cross-chain integrator, Reef connects to some of the largest crypto trading platforms and offers unparalleled liquidity. What makes it different is the fact that all the aggregated liquidity goes through both, Decentralized exchanges and Centralized exchanges. This helps users hedge against the drawbacks of the two exchanges, high slippage, and high trading fees.

The inclusion of both decentralized and centralized exchanges makes it possible for the users to access the greatest liquidity possible while keeping slippage and spreads low. To provide aggregation of liquidity in the ecosystem, Reef uses the Polkadot atomic bridge and makes trading more affordable as well as easy and diverse.

Smart Yield Farming Aggregator:

Reef Finance also simplifies yield farming by automating DeFi services such as mining, borrowing, and lending. The network uses a basket engine to help users earn yield rewards and manage assets on the user’s behalf. When a user creates a stake in various asset baskets, the basket engine helps make it happen by combining with the “Yield Engine” and the “Intelligence Engine”.

The entire process of staking is automated with the use of AI which allows asset management in a more appropriate way. You would have little to worry about as the Reef Yield Engine automates the nitty-gritty of trading and staking for beginners.

Smart Asset Management:

The third and the most unique feature of Reef is the Smart Asset management which is provided by the Reef Intelligence Engine. The Engine enables the AI to seamlessly manage assets by rebalancing users' holding between the various baskets based on the user’s needs and goals. Moreover, the AI also uses the available information to make recommendations about managing assets and determining investing opportunities.The Reef Engine requires off-chain data to function and manage assets. The data is provided by an oracle to proxy smart contracts. The Engine also monitors every online source of information that the Reef Finance services could use.

How Does Reef work?

All in all, Reef Finance works as a liquidity aggregator. As mentioned earlier, the platform takes its liquidity from both Centralized Exchanges and Decentralized Exchanges. It is done by using the Polkadot "atomic bridge," which makes it easier to trade on the platform. The atomic bridge allows users to experience low slippage and gas fees while protecting users against "front running" and other market manipulations.

Reef Finance utilizes Polkadot's Atomic Swap functionalities to make the best possible trade for you and access any exchange on any network.

Reef Finance Tokenomics

REEF Token is the native token of Reef Finance and it exists on both the Ethereum and the BSC networks.

A private sale was held in September 2020 after which the project raised 3.9 Million USD which is incredible. Let's dive into the Reef token economics.

Reef Token:

Being the native utility token for the Reef Finance platform., Reef Token has many utilities. The total supply of the token is 20 Billion tokens which are to be released evenly and distributed quarterly over one year. The token has several utilities on the platform that are discussed below.

Reef Token utilities:

The reef token has four major functions. These are:

• Governance:

The token can be used to have a say in important platform decisions by voting on different proposals. You can be a part of the governance by voting for releasing new features and certain parameters in the system.

• Protocol fees:

You can also use the Reef token to pay fees for different operations on the platform. These operations include entering/exiting a basket, rebalancing, reallocation, and more. The token also helps in aggregating liquidity between different pools.

• Staking:

If you own Reef tokens, you can use them to stake into various pools to earn interests with preferred APR and at better rates. Moreover, stakers are in control of how they want to receive their rewards. They can either receive in ETH/USDC or $REEF.

Yield Distribution:

With the help of Reef tokens, you have the freedom to choose the payout ratio of the profit generated by the activities in your basket.

Reef Token distribution:

The Reef token has a total supply of 20 Billion tokens out of which the initial circulating supply was only 19.83% leaving a lot of room for inflation to occur. Let's have a look at the token distribution:

• 5.6% of the total token supply will be reserved for the Private Sale Allocation.

• 30% will be released at Token Generation Event (TGE) and allocated for Private Sale Vesting.

• 8.33% of the total token supply will be distributed for Strategic sale Allocation.

• For Strategic Sale Vesting, 25% will be released at Token Generation Event (TGE).

• 7.14% of the total token supply will be allocated for the Seed sale Allocation.

• For Seed Sale Vesting, 20% will be released at Token Generation Event (TGE).

Reef Finance Partnerships

The Reef has been strengthening its position since its inception by partnering with many projects and firms. The project is getting exposure and more potential users through its ever-increasing partnerships. Some of its partnerships are:

Polkadot:

Reef Finance is basically powered by Polkadot that allows it to interact with any other chain. This gives the platform plenty of room to scale without any congestion.

ChainLink:

Reef Finance has also partnered with one of the top oracles of this time, ChainLink. It allows the Reef protocol to use high-quality price feeds.

Binance:

Reef Finance is partnered with the world's biggest exchange, Binance. Through the Binance brokerage, the exchange provides a fiat on-ramp inside Reef. Moreover, Binance also featured the initial Launchpool staking for the REEF Token.

The other partnerships include Matic, Kava, Unifi Protocol, and Equilibrium.

The Takeaway:

To conclude, we are wildly enthusiastic about all the things Reef Finance offers but the future of Reef Finance is still unclear to us and many others. There is no denying the fact that Reef is backed up by an experienced team from different backgrounds.

The team has also made promises of adding more products to the staking and liquidity farming like lending and borrowing.

Moreover, with all the recent controversies about its maximum and circulating supplies, it is best to be cautious until some valid answers surface.