On December 8, we had the pleasure of joining the Satoshi Club community for a 3-part AMA session. The AMA was hosted by Mary from Satoshi Club and our CEO, Denko Mancheski joined the session to answer questions from the community.
It was an informative session where the best questions were picked from the community for our CEO to answer. There were two segments to this AMA sessions.
The first segment included 6 questions dropped by the community on the Satoshi Announcement channel and the second segment was carried during the live AMA where the top 10 questions were answered.
SUMMARY
Satoshi Club is an educational group about blockchain technologies that conducts quizzes and AMAs with popular crypto projects.
So far, Satoshi Club has had 32 AMA projects and 86 quizzes with partners like Kava, Tokoin, Coinzoom and more.
It was a 3-part AMA with Satoshi which started with questions by the community from the Satoshi Announcement Channel. It was followed by the second segment where Denko answered the best questions from the community during the live session.
The last segment was a quiz for the community on Reef Finance. The community had 7 minutes to answer all the questions and close the AMA session.
INTRODUCTION:
The AMA session started with a brief introduction about our CEO and Reef Finance.
Here is how it went–
Satoshi Club Host — Thanks for joining. To be begin with, please tell us a few words about yourselves and how did you get to be involved in Reef.
Denko Mancheski — The best way to understand about myself is to go quickly though my story.
We published it few days back. Here is the link: https://reefdefi.medium.com/denko-mancheski-ceo-of-reef-finance-founder-q-a-dbc3d9f03bf7
Here is also a more condensed info about me:
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 lead 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 years back, 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.
Satoshi Club Host — What is Reef? Tell us a little about your project for the community before we start with the questions.
Denko Mancheski — The shortest possible explanation which is easily understandable by non-tech savvy people: A one-stop place where anyone can quickly invest into DeFi taking into account their risk tolerance
To elaborate, 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.
Basically, it’s the easiest way to get into DeFi. You do not have to go anywhere else — we have all the DeFi activities + multiple ecosystems.
FIRST SEGMENT -
In this segment, community members left their questions in the comment section of this AMA telegram post on the Satoshi Club Announcement Channel. The 6 best questions where picked by the host for Denko to answer.
Satoshi Club Host — So, let’s start with the questions from the community on our announcement channel –
Question 1 from telegram user @Thienzoro
Few projects have a liquidity connection between CEXES AND DEXES as far as I know. Which side is more inclined to Reef between CEXES AND DEXES (according to the number of bilateral traders)? What is the difference between CEXES AND DEXES? So, to take advantage of this, can I exchange from ETH to BNB? Usually such a transaction would be very laborious. What is the fee on the Reef side if I put 1000 $ on eth side to BNB?
Denko Mancheski — Initially, the liquidity aggregator would be used by the basket engine. After having it up for few months, we will allow other projects to access it as well.
The mechanism works like this: If you have a certain asset in the basket, based on your order size the on-chain mechanism will split and route your orders appropriately to the most liquid DEXs.
On the other hand, regarding CEX liquidity, Binance Brokerage was the first step that we have taken. This will allow a % of the basket to be filled through their API. This is non-custodial and you don’t need to put your API key anywhere. The second integration would be a prime broker which has integrated pretty much all the exchanges in the background. CEX will most likely require KYC after certain threshold and we will make sure that this journey is as easy as possible.
Besides getting exposure to BNB through the basket, we will have the mechanism to just swap back and forth — this is easy. We are working on a pooling mechanism which will reduce the fees drastically since the orders are aggregated and sent through the basket engine at once.
Satoshi Club Host — Question 2 from Telegram user @Mora110
The Modern Portfolio Theory (MPT), or mean-variance analysis refers to an investment theory and mathematical framework, that allows investors to assemble an asset portfolio that maximizes expected return for a given level of risk. The theory assumes that investors are risk-averse; for a given level of expected return, investors will always prefer the less risky portfolio. What is the expected revenue and what is the level of risk?
Denko Mancheski — Basically our baskets have different risk levels that the users can choose. How we derive those risk levels is a book on its own. That’s where our analytics engine comes into play. Based on the type of the asset we extract different metrics for it, these metrics are then relatively compared to the other instances of the same assets.
After we get the metrics, we come up a hypothesis on how those assets might be affecting each other. We realize the hypothesis by apply different models which are further back-tested. Most of the hypothesis never make it through the requirements to become a main strategy.
Here is an example: A staking pool can have few characteristics:
- Date creation of the smart contract (and is it a copycat of another smart contract or not)
- Amount of assets locked in the pool (5m, 10m, etc.)
- Velocity of how fast those assets entered into the pool (is this a hype that people just entered with 300m$ in 5 hours — eg: the spaghetti thing)
- Diversity of the assets locked — is it 5 whales that own it (we can further backtrack the flow of the funds and if they were mixed in an exchange, we grade that inflow with a low rating)
- Social media traction — how the hype was formed, when did it become present, which influencer started it.
Satoshi Club Host — Question 3 from Telegram user @Winterkom
Most DeFi projects get their yield from the platforms found in the Ethereum network. How do you get Yield on Reef Finance if you are in Polkadot? Do you have any interconnection with the different blockchains?
Denko Mancheski — Yeah, we are utilizing the bridges and the Reef’s wallet which has multi-ecosystem support to get your funds from ETH to Polkadot. We have infrastructure deployed on both polkadot and ethereum.
What happens in the background is the following –
Your wallet derived polkadot address from your seed -> you don’t even care what the address is.
The wallet sent your ETH on a bridge to take lock it there and get wrapped ETH on polkadot on your newly generated address.
When the wrapped ETH gets confirmed, we now use your polkadot address natively and use our infrastructure to get your wrapped eth either further swapped into something else or directly routes in the activities that were part of the basket. Since we know polkadot is getting ready, this won’t be available in the first version, but very close after parachains are live.
Satoshi Club Host — Question 4 from Telegram user @jerlyyyyyn
One of the major components of Reef protocol is the machine learning and AI powered DeFi yield engine. What more information would you like to add in DeFi yield engine? Do you have more to offer that most DeFi users doesn’t have yet which can benefit the investors and users in the blockchain technology overall?
Denko Mancheski — Yeah, as I mentioned earlier we have a lot of metrics (last year we provided metrics for crypto funds — they based their decisions on this data). Reef is not fork-able. You can’t just spin off another clone and call it something else. The analytics engine is a proprietary technology which is hard to manage/deploy even if the code is open source. We are basically a different type of project, its hybrid.
Satoshi Club Host — Question 5 from Telegram user @K2ice
The APY generated by the Reef pool comes from the income streams generated by the Reef’s ecosystem. Can you elaborate more on those income streams? How many are they? And are there plans to add to these income streams in the nearest future?
Denko Mancheski — 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.). The biggest income stream comes from the protocol fee + the basket engine.
Satoshi Club Host — Question 6 from Telegram user @Armaan007xxx
You talked about using programmatic limit’s and emergency switches in case of security exploit. Will Governance have any role in these decisions in future or it would be decided by just team?
Denko Mancheski — Definitely. All those important things will be eventually given to the DAO address. In the first few months we will be calibrating this ourselves
SECOND SEGMENT
In this segment, the 10 best questions were answered from the community. All community members submitted this question during the live AMA session.
Telegram User @goldfishgg — It’s quite unfortunate that many projects have infiltrated the market with just white papers without having any genuine use cases. What are the main utilities of your coin?
Denko Mancheski — We had due diligence process and we showed the demo + github to our investors.
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.
Telegram User @kripto_mangunkusumo — Since one of the focus reefs in the future is Fiat Gateway. Does this mean Reef implements KYC? and to support Fiat Gateway how do you deal with regulation so far?
Denko Mancheski — You will always be able to use Reef just with just a Metamask wallet. The moment we integrate CEX liquidity, if the user wants to have access to it, 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.
Telegram User @konditer_rolex — Is the creation of the Polkadot DeFi Alliance more of a marketing ploy, or can you really agree on a decision that will simultaneously affect all the projects of the alliance?
Denko Mancheski — There are many things coming for the Polkadot DeFi Alliance. Absolutely not just a marketing play.
Telegram User @PrishepaTrade — What is the security level of Reef finance? Can you be sure that users’ funds are safe?
Denko Mancheski — Reef is completely non-custodial, so everything can be tracked and seen on the blockchain (we will provide tools which will allow easy monitoring). We finalized the first audit, one more coming soon. We also have programmatic limits which will gradually increase. Security is our #1 priority.
Telegram User @JP_Morgan_Chase — The DEFI space is changing rapidly today. How flexible is Reef’s network to quickly change and meet user requirements?
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.
Telegram User @LavrovCrypt — Dоes Rееf Finаnce havе a plаn to lаunch uniquе DеFi prоducts that could revolutiоnize and innоvаte DеFi?
Denko Mancheski — Yes! we will be introducing different asset classes and ETF-like instruments.
Telegram User @Jasodadaiya — Only getting users, holders etc. is not everything. In my opinion, a project needs to deal with solving a real-world issue or problem What is the problem that your project primarily focuses on?
What can we expect to see from this project in the short-term (at some point in 2020) and 2021 and beyond (long-term goals)?
Denko Mancheski — Become Robinhood for DeFi! https://en.wikipedia.org/wiki/Robinhood_(company)
Telegram User @jangrihwa — Are there any Coin Reef currently held by the team or have they all spread to investors?
Denko Mancheski — You can check our current tokenomics: https://reef.finance/tokenomics
Telegram User @Vlasov_Kiril — The Polkadot ecosystem has many DEFI, MantraDao and AKRO products. Do you consider them to be competitors or partners? What sets Reef apart from other projects and competitors in the DEFI space?
Denko Mancheski — Our Partners. We are composing and integrating on top of the DeFi ecosystem. Simply: Google Chrome for DeFi on steroids. The other DeFi projects are websites.
Telegram User @JesusFre1tes — Where does the APY for betting on Reef pools come from? In addition to the Reef Pool APY, will users get returns generated by the Smart Yield Growing Engine? What role will Reef Treasury play in all this?
Denko Mancheski — It comes from the basket engine. I explained above the exact mechanics of how this component generates revenue.
Eventually, the 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.).
This was the end of our AMA sessions. This was followed by a third segment which a quiz about Reef Finance for the Satoshi Community. This quiz was facilitated using a form.
It was a fun AMA and we would like to thank everyone who engaged in this session. We look forward to having more such AMAs soon.
