Reef Finance AMA Recap with the bZx Community
On the 19th of January, 2021, Denko Mancheski, CEO of Reef Finance, was live on the bZx Telegram group, to provide the community with insights on what Reef Finance is all about, details on their recent partnership & upcoming developments, and also attend to their questions and queries. The session was moderated by Sonny, a core member of the bZx team. Kyle Kistner, the Co-Founder of bZx, was also present in the session.
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 bZx team, while the second segment gives account of the questions asked by Telegram community members.
Sonny — Welcoming Denko Mancheski
Denko Mancheski — Hello! Glad to be here. Thanks for having me.
Sonny — Pleasure’s all mine. So, let’s get this started. What’s your background in the industry — for the benefit of our community.
Denko Mancheski — 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. 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.
Kyle Kistner — Could you give us an overview of what Reef is?
Denko Mancheski — 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.
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.
Or to simplify further: Reef is the easiest way to get into DeFi. Its a gateway to DeFi through Liquidity and Protocol Aggregation, Proprietary Analytics, and Multi-Chain Accessibility
Kyle Kistner — How far along is the product development?
Denko Mancheski — We finalized the first audit and are currently in testing phase with the initial features. The initial product will launch in Q1 — exact date to be announced soon 🎉
Kyle Kistner — We’ve recently partnered and I’m pretty sure the community is eager to hear what role bZx will be playing in Reef’s ecosystem.
Denko Mancheski — bZx is one of the most used protocols to build financial primitives. Its ecosystem of DeFi activities is growing on daily basis.. Reef is integrating and composing on top of the current DeFi infrastructure — hence why I call Reef the Layer-1 DeFi protocol.
Kyle Kistner — Circling back to the protocol a little bit, what are baskets and how do they work in Reef?
Denko Mancheski — The synergies between us are big since we are focused on bringing users to the bZx’s ecosystem while bZx is focused on making sure the protocol layers are scalable and secure
The basket engine is basically a protocol which abstracts away an entry to a certain DeFi activity. Besides that it also allows for aggregation of the outputs of the financial primitives. To simplify it:
You come on Reef’s platform -> you pick a basket -> you choose certain parameters such as risk level -> our analytics engine proposes the best composition for you (it might contain activities from multiple ecosystems) -> with 1 click you are invested.
Next — our analytics engine is monitoring your baskets and can propose certain changes (reallocation, rebalancing, etc..). Additionally, with just 1 click you can insure your whole position + you will be able to spend the yields that the basket earned directly through a debit card.
Kyle Kistner —That’s amazing. Is the creation of pools something that the community can participate in?
Denko Mancheski — Yeah, besides getting into existing activities (such as providing liquidity into existing pools) we are also working on types of basket where the users can help “bootstrap” a completely new financial primitive
Pratik — Very cool! Denko Manceski, I am curious to know about how and where you will be using AI and ML analytics engine with regards to the different farming pools.
Denko Mancheski — Yeah, our analytics engine is a proprietary component on which we have been working for over 2 years now. We collect a lot of data (social, blockchain traffic, exchange data) and we extract metrics for all the tokens and financial primitives. Based on these metrics we further create models from which we derive the risk level for each of these. This engine is monitoring and processing 24/7.
Then its consumed by the reef client on which one can get a custom exposure based on few parameters (one being risk level). After that all the metadata is routed through the basket engine which has implemented adapters for those activities and gets the users invested without having to make a mess in their wallets (basically holds the outputs of the entries for them)
So the metrics depend on the financial primitive but here are some examples
- exchange data: order book metrics such spread, liquidity, activity. Washtrading metrics (obviously with confidence levels).
- On-chain data: transfers -> address rating, etc.
Community Question 1 — 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 the user decides to plug into CEX liquidity, 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.
Community Question 2— NFTs are very popular in cryptospace. Are there any idea to implement NFTs in the Reef Ecosystem?
Denko Mancheski — Yes, we are preparing big things around NFT! Besides the plan to introduce baskets related to the Steam ecosystem in Q3, we are also working on other integrations which will happen sooner.
Community Question 3— Do you have any mechanism for transferring to ethereum network compatibility so other projects can think of using your solutions?
Denko Mancheski — Yes. Actually our first release is on Ethereum and BSC.
Community Question 4— How solid is your technical base and business — model of the REEF token compared to other DeFi projects? Are you ready to change quickly with an ever-changing crypto economy?
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.
Community Question 5— I can get Reef Pool Tokens (RPT) for staking Reef. What is the role of this token in the Reef ecosystem and what income do RPT token holders get?
Denko Mancheski — It gives you exposure to the Reef ecosystem’s economy.
Reef 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.).
Community Question 6 — The idea of the REEF FINANCE project is really unique and incredible, how did this idea come about?
Denko Mancheski — By far the best way to learn about this in this blog.
Community Question 7—How many audits are you planning to do, and which companies will be involved? Have you seen any recent exploits, and has it changed any of the companies that were audited?
Denko Mancheski — Two — One of them is halborn . Besides auditing, we also have programatic limits which will gradually increase. Security is our number 1 priority.
Community Question 8—Reef has 3 income streams which are: BASKET ENGINE ; PROTOCOL FEES ; and INTEREST PAID by power users who BORROW TOKENS from the REEF POOL . It’s quite surprising that all these 3 income streams only flow in the Reef pool. Do you have plan of giving DAO the power to make DECISIONS on how these FUNDS would be further ALLOCATED ?
Denko Mancheski — Definitely! The moment we deploy the DAO, the income stream will flow into Reef Treasury where the community decides that happens with the funds (and there will be a lot of them).
Community Question 9—What are your major goals to achieve in the next 3–4 years? And what are your plans to expand and gain more adoption?
Denko Mancheski — Become the biggest DeFi gateway through which funds flow into the best financial products which projects such as bZx are building.
Community Question 10—As a community driven project, what do you expect from the Reef Finance community? How do you encourage community participation in the ecosystem?
Denko Mancheski — We are creating different engagement activities with our communities right now, but the moment we go live, we will be having reputation system which will allow us to create more product-related activities — one example of product-related activity is “gamify the way people use debit card”.
Community Question 11 — What is the main use of the Reef token and the main value of this token to maintain on your platform? Can you tell us the benefits of buying and storing it?
Denko Mancheski — 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 12 —
- How does Polkadot support Reef on this adventure?
- Does Reef have enough technical employees to do these tasks in accordance with the plan?
- When does the Burning system will be ready?
- Can I earn Reef by keeping my Reefs?
Denko Mancheski —
- We are working closely with Polkadot and the projects building on Polkadot
- Yes, we are constantly expanding our team — Rust developers are rare breed nowadays.
Community Question 13 — How is Reef Finance involved in the development of the DEFI space? Please share your vision in this area?
Denko Mancheski — Reef’s biggest goal is to help the DeFi landscape become mainstream. Besides crypto users, we are also focused on non-crypto users — We will have an interactive onboarding experience, so based on how familiar the user is with the crypto landscape, he will get properly educated. Not only about how things work, but also around the risks involved.
Community Question 14 — Why did you choose Polkadot? What can the Polkadot ecosystem offer Reef Finance to address the challenges of modern DEFI applications?
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.