Reef Finance (REEF) combines a custom-built blockchain, smart contract programmability, DeFi capabilities, and a new cryptocurrency to create an entirely new DeFi experience for users. The network seeks to provide DeFi investors with a one-stop shop for all decentralized services. As such, the Reef Chain ecosystem continues to expand. Here’s everything you need to know about investing in Reef Finance (REEF).
What Problems Does Reef Finance (REEF) Attempt to Fix?
Reef’s design helps to reduce investor confusion in the market. The recent surge in DeFi options has left many users confused in regards to which are the best platforms and algorithms. Reef’s strategy is to become a one-stop shop for these users. This approach enables users to leverage the best aspects of multiple DeFi networks and save time on research.
Lack of Interoperability
Another major concern for developers is the current lack of interoperability in the market. Rather than attempt to connect DeFi networks in a way that makes users navigate their options without guidance, Reef integrates the best aspects from the most commonly used blockchains to improve your overall ROI opportunities. Specifically, the protocol pulls liquidity from the Ethereum, Binance Smart Chain, Cosmos, and Avalanche networks.
Earlier cryptocurrencies such as Bitcoin and Ethereum are notorious for their high energy consumption. Studies have shown that Bitcoin requires more energy than entire countries. Recognizing this lack of sustainability as a major issue, Reef does away with the power-hungry miners found on Proof-of-Work networks such as Bitcoin.
Benefits of Reef Finance (REEF)
Reef brings a lot of benefits to the market. The network provides a secure, scalable, and decentralized network for developers to build on. The network is EVM-compatible which means that development teams can port existing applications from Ethereum and deploy established ERC-20 assets without reprogramming.
One of the biggest draws to Reef is its low fee structure. Compared to Ethereum, Reef users pay lower fees and enjoy a more responsive DeFi environment. Reef can charge lower frees than Ethereum due to its technical structure. The network avoids fee hiking congestion due to its highly scalable PoS validation system.
How Does Reef Finance (REEF)
Reef originally launched on Polkadot before the network introduced the Reef Chain. This next-gen blockchain supports full smart contract programmability, liquidity bridges, token issuance, and supports all current DeFi features. Wisely, the developers choose to build the Reef Chain using a Substrate Framework which helps to improve upgradability and security.
The Reef Chain ecosystem is unique because it gathers liquidity from various sources across the DeFi sector. Users can access liquidity from the top-performing decentralized exchanges, centralized exchanges, liquidity pools, and more. Users benefit from the ability to share liquidity across platforms in a seamless manner.
You can stake your REEF tokens and secure low-risk passive rewards. Staking is how PoS networks remain valid. It involves you locking your crypto into a smart contract for a time. Many investors prefer staking over trading because it enables you to earn passive rewards without giving up ownership of your assets. Unlike trading, where you never know what your exact ROI will be, your staking rewards are predetermined based on the number of tokens you lock. Best of all, your rewards are paid out in REEF tokens that can then be staked with your initial investment to create a wealth-generation loop.
The REEF-20 token standard is Reef’s version of ERC-20. REEF-20 tokens enjoy all the security and performance benefits of REEF. Developers and businesses can issue REEF-20 tokens to create new revenue streams and improve consumer interaction.
REEF is the main utility and governance token for the network. Users interact with the features of the network using these tokens. You also pay fees and receive rewards in REEF. This strategy helps to drive the demand for the network’s token. Currently, REEF is available on a variety of top-performing CEXs and DEXs.
Reef Finance (REEF) Consensus
Reef uses a Nominated PoS consensus mechanism. This system relies on community-voted nodes to approve transactions. Regular users can bind their tokens to these community-voted nodes and earn rewards as well. Unlike Pow systems that rely on miners, regular users verify transactions in a Proof-of-Stake consensus mechanism.
PoS networks are faster and more democratic in that they don’t require you to invest in expensive mining rigs to participate and earn rewards. Also, these networks require only a fraction of the electricity requirements of their predecessors and they are far more scalable. Consequently, it’s more common for new blockchains to use some version of PoS consensus.
One of the main advantages of Reef is its focus on community. The network puts users in control of its destiny via a community governance system. Reef users can put forth and vote on proposals. Proposals can cover a wide scope of topics including altering the fee structure, conducting token buybacks and burns, and funding new projects built on the Reef Chain. Community governance is becoming very popular in the DeFi market for good reasons.
Primarily, it helps to keep a project’s community-engaged and cohesive. Users must bond their tokens to participate in Reef’s community governance. The system puts more weight behind users who are more invested in the ecosystem. This strategy ensures that those with the most influence have the most to lose.
History of Reef Finance (REEF)
Reef entered the market in Q4 2020. Since that time, Reef has seen growing adoption by users, developers, and partners. The network launched on Binance Launchpool and quickly got listed on a variety of other top CEXs. Today, the Reef Chain ecosystem consists of an excellent selection of platforms, exchanges, and Dapps.
Reef Finance (REEF) Provides Access to Top DeFi Features from Across the Market
Reef’s desire to simplify DeFi for everyone is commendable. The protocol combines many of the top features in the market with an easy-to-navigate interface. Both new users and experienced DeFi users can find a reason to check this platform out. For now, you can expect to hear a lot more from this development team as they continue to expand Reef’s capabilities in the coming months.