Reef Finance AMA Recap with the Avalanche Community
On the 12th of January, 2021, Denko Mancheski, CEO of Reef Finance, was live on the Avalanche 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 Nicolas Lemaitre, a core member of the Avalanche team. Kevin Sekniqi, the COO of Avalanche, was also present in the session to answer some questions.
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 members of the Twitter community, while the second segment gives account of the questions asked by Telegram community members.
Nicolas Lemaitre— Thanks and welcome to the Avalanche AMA with Reef Finance. For today’s AMA. Welcome Denko Mancheski!
Before we dive into the questions, can you briefly introduce yourself to the Avalanche community, and share some background on your journey to co-founding Reef?
Denko Mancheski — Thanks for having me here. 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. 2.5 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.
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: Here is a bit on the origin story and how Reef’s idea was formed.
Nicolas Lemaitre — That’s quite impressive, thanks for sharing! The NFT world is spreading like wildfire and in the Q3 of Reef Roadmap, I noticed NFT Baskets. How is Reef Finance planning to enable NFT trading, storage, or yielding?
Denko Mancheski — That’s a great question. We believe that the most successful NFT landscape will be gaming. But the issue is that not many mainstream games currently have issued items on the blockchain
So we are building a P2P mechanism to trade Steam items. We will inject these functionalities in the Reef wallet which has multi-ecosystem support for multiple blockchains. This will allow us to create a basket through which people can get exposed to items from games like Dota, CSGO, etc. This would be the easiest way for DeFi users to get exposed to this ecosystem.
Besides this, we will be working with other projects and introduce baskets for other types of NFTs. We are already working with big traders in the steam ecosystem.
Kevin Sekniqi — That sounds very interesting! Can you elaborate more on what Stream items are in this case?
Nicolas Lemaitre — Maybe we should move to the next question to respect our schedule.
Denko Mancheski — The steam items are also known as skins — those are basically assets that can be used inside the game. They also have their own market. For example:
As you can see this item is being traded and has price. So people can buy it and equip it in-game. There are items worth over 50k$ and there are items which are speculative
Nicolas Lemaitre — That will speak to a lot of gamers. For NFT and a reminder to our community you can deploy them directly on our wallet you can check that here.
Denko Mancheski — Our analytics engine will pick the best exposure for you based on your risk levels .. just like we do with DeFi.
Nicolas Lemaitre — I really like the idea!
Denko Mancheski — Yeah its awesome and we can extend it to next-level APY where certain traders will manage your exposure actively. Honestly so far we could do over 100% APY but obviously it has capital limitations. So would be hard to make over 100% on 30m$.
Nicolas Lemaitre — Next question. What is the structure of Reef Finance? Is it a decentralized open-source protocol that anyone can contribute to? How do you plan to manage?
Denko Mancheski — It is a hybrid project basically — its fully non-custodial. Our analytics engine is a centralized component because at the moment its impossible to deploy it on any kind of decentralized infrastructure and achieve the processing power that we need. The basket engine, the revenue streams and the rest of the components are fully decentralized and we will open sourcing certain parts very soon
Also some things that are not possible to decentralize are distributed (eg: the wallet which helps users cross bridges seamlessly).
Nicolas Lemaitre — With Reef introducing DeFi fiat input gateways and later on a debit card, and AVAX offering faster-than-Visa transactions and access to digitalized assets, do you think adventurous power users may move away from banks soon? Swapping that fiat under your mattress with a pen drive.
Denko Mancheski — I believe the traditional financial industry will be based on multi-layered DeFi infrastructure soon. Especially with the rise of stablecoins. I think this landscape is Fintech 2.0. So definitely, banks will become like physical libraries
Nicolas Lemaitre — We will have two more questions after Kevin’s answer, and then we will open the channel for questions.
Kevin Sekniqi — I tend to stay away from any predictions over what’s going to happen, but I do think that there’s huge value in self-custodied financial products. The speed of innovation of crypto when it comes to new financial products that provide users more financial freedom is far higher than that of mainstream finance. That alone, is worth quite a bit, so I do think we’ll see more and more usage out of decentralized ecosystems over centralized ones.
Nicolas Lemaitre — The partnership with Avalanche will allow Reef platform users to access the DeFi solutions at Avalanche. Will this partnership bring any direct benefit to $Reef holders or #AVAX holders?
Denko Mancheski — Definitely. Reef users will be able to seamlessly access Avalanche’s DeFi products, while Avalanche users are able to make better decisions based on their risk levels — and can also use Reef as a discovery mechanism to find out which financial primitives offer the most lucrative returns on avalanche
Nicolas Lemaitre — What future plans do you have for the $REEF token, are you planning any staking or farming in the long run? And what do long term token holders Stand to gain?
Denko Mancheski — We are planning to release staking and farming very soon. Regarding the token holders’ benefits, it would be best for themselves to figure out by checking out how our tokenomics work and how the ecosystem is tied together with the token
Nicolas Lemaitre — Thank you for answering these questions from Twitter.
Community Question 1 — What is your strategy to prevent the decrease of value because of ICO. as it will be always a danger for the price pressure, and sell pressure Will be there any sufficient token burn progress as since it is launched on Binance it didn't performed well.
Denko Mancheski — The farming is ending soon + the last batch of token distribution happened 2 days ago. We are releasing the first version of the product soon paired with big activities around it. We are also considering a potential token burn — which if it happens need to be done in a fully decentralized fashion through voting.
Community Question 2— Good afternoon, tell me, please, how will commissions become cheaper when the Avalanche-Ethereum Bridge is launched? And why ?
Denko Mancheski — We are working on a pooling mechanism. This will allow users who want to save on fees to create an “order” for the basket engine and there is another smart contract which is buffering those orders. Either on a certain amount or certain timeframe the orders will be squashed and routed through the basket engine. It might take 20–30 min to get exposed instead of 30 seconds, but you will pay substantially lower fees — also this is only for blockchains such as Ethereum — on Avalanche this problem does not exist.
Community Question 3— How is reef built on Polkadot if there are no smart contracts still?
Denko Mancheski — Reef will be deployed on multiple para-chains on Polakdot. First inline are plasm and moonbeam.
Community Question 4— There has been a lot of talk on why the big supply of coins are needed in the ecosystem and what role they play, does REEF need to be at a certain value to work with this concept or is being used in the product stream going to bring more liquidity and raise the value for the coin?
Denko Mancheski — The product and the token are tied together. Reef currently has 3 income streams: Basket engine, protocol fees and interest paid by powerusers 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.)
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 and directly stake it into the pool.
Community Question 5— 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 DeFi to build on NFT concept/Technology ? Any future idea about NFT?
Kevin Sekniqi — Speaking for the first part of the question: I think NFTs are a really awesome growing class of assets and I’m excited to see them explode in popularity.
The world of art dealing hasn’t moved to the digital world, but it’s ripe for disruption with blockchain. I’d love to see rare, limited editions art pieces on Avalanche. I’d love to see the emergence of the next digital “Bansky”, artists that are primarily “online” but have incredible following.
Community Question 6— I believe Reef is a user friendly platform providing ease of on-boarding and maximum profitability for users. For the future of Reef, what do you look forward to and what excites you most?
Denko Mancheski — Non-crypto users getting into relatively safe DeFi instruments and spending their passively earned profit through Reef’s debit card. When this happens im taking a 2 week vacation.
Community Question 7— How Reef benefits from the Avalanche ecosystem?Why was Reef Finance built on Polkadot? Can Reef Finance have a breakthrough working hand in hand with Avalanche?
Denko Mancheski — Expanding into another ecosystem will give users more choices for diversification.
Polkadot’s parachain communication (XCMP) and bridging mechanism, combined with the possibility to run solidity code on para-chains 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. Yes, that’s what we are working on.
Community Question 8— Now I want to ask which companies do you consider as competitors? Compared with other DeFi projects, what advantages does Reef have that could stand out?
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. Reef is technically a layer-1 DeFi
Community Question 9— Most tokens built on DeFi eco system are characterized by serious security issues which plans do you have to combat that and ensure the security of funds?
Denko Mancheski — We finalized the first audit, one more coming soon. We also have programmatic limits which will gradually increase. Security is our number 1 priority.
Community Question 10— Do you currently have a bug bounty, shilling contest or ambassadors program we can assist in?
Denko Mancheski — We do have an ambassador program.