Last Updated on May 26, 2023 by Olga
Learn about Reef, a blockchain built for finance and powering decentralized finance (DeFi) applications. Discover the unique features of REEF cryptocurrency, including the ability to participate in protocol upgrades and validation, staking for rewards, and burn auctions. Find out the benefits of taking out an REEF loan, including profit from volatility, making a huge purchase while continuing to hold your assets, tax optimization, and risk management. Follow these 4 easy steps to get a REEF loan and start benefiting today.
What Is Reef blockhain?
Reef is a layer 1 blockchain built using Parity’s Substrate technology. Launched in 2019 by Denko Mancheski, it’s undergone a significant transformation from a DeFi platform to a fully-functioning blockchain.
Valid blocks of transactions are processed using Nominated Proof of Stake (NPoS). Nominators stake REEF behind validators in order to be selected into the active validator set. If a validator successfully processes a block, 64 nominators receive a reward.
Aside from NFTs, DeFi, smart contract development, and GameFi, Reef also offers liquidity bridges between Reef and Ethereum, as well as BEP-20 tokens between Reef and the BNB Chain.
What is REEF cryptocurrency?
The Reef token is the native currency of the REEF-chain and it’s used for liquidity exchange, transaction fees and governance. The Reef token has a circulating supply of 16B tokens and a maximum supply of 20B tokens. Most Reef tokens are traded on decentralized exchanges such as Ethereum and BSC.
The main purpose of the Reef token is to provide liquidity transfers between different blockchains, and this can be done on their platform. Moreover, holders can participate in the governance structure of the network and vote on issues such as features and partnerships.
Large Reef token holders can participate in maintaining the network. They are called “Network Collaborators” and they create new blocks on the Polkadot Ledger. Their APR varies by the size of the tokens being locked and the timeframe.
What Makes REEF Unique?
Reef is geared towards newcomers, as well as current DeFi users who find it difficult to keep up with the best investment strategies. The company also wants to tackle the high gas fees that are seen on the Ethereum blockchain, which some claim renders DeFi protocols “unusable.”
Its unique features include the ability to integrate any DeFi protocol into its operating system. Users can enter and exit their chosen positions with just one click, removing some of the hassle associated with managing liquidity pools.
Because Reef has been built on Polkadot, it is able to support DeFi protocols on Avalanche, Moonbeam and Plasma, as well as Ethereum and the Binance Smart Chain. Consequently, Reef users have access to a broader range of platforms without having to manage multiple accounts and a plethora of usernames and passwords.
What are the benefits of taking out a REEF loan?
With crypto loans, you can access funds without selling, increase liquidity, maximize capital utilization, and diversify your portfolio more effectively. In addition, crypto loans tend to have lower interest rates than traditional loans, so borrowers are able to get funds for much less. Finally, these loans provide additional peace of mind since crypto collateral is stored securely in a cold storage wallet.
Here are some cases where you can use REEF as a collateral and get profit:
- Profit from volatility – CoinRabbit loans remain fixed no matter the exchange rate of the collateral currency. An example will help to explain this concept. Suppose you received a loan with 90% Loan-to-value-ratio against 600,000 REEF when it was valued at $0.015 (approx. $9,000). You were then provided with 90% of your collateral; in this case $8,100. To receive your REEF collateral back, you must repay that exact amount – regardless if REEF rises to $0.03 or higher. Technically speaking, when repaying the loan at that point, you’d be getting back a total of $18,000 instead of the original $9,000! Crypto loans allow users to leverage their assets and potentially gain profit simultaneously – making them incredibly advantageous.
- Make a huge purchase and continue holding – The crypto loan allows you to enjoy the value of the invested fiat money while inflation permanently decreases it. Today the same amount values more than tomorrow. Therefore, when you take out a crypto loan against REEF, you keep all your REEF assets but gain extra funds to spend today, as we all know that tomorrow your wishes will be more expensive. 😉
- Tax optimization – Some countries require you to pay up to 40% on your crypto investment profits. There is no direct profit in a loan transaction. So you can take a loan and maximize your tax efficiency without worrying about taxes.
- Technique for managing risks – Rather than holding REEF tokens and risking the unpredictable fluctuations of the crypto markets, crypto investors now have the opportunity to utilize their investments as collateral for a REEF loan. They can access funds while their assets remain secure, allowing them to manage their risks. In this way, they can benefit from the lower interest rates of crypto loans while protecting themselves from potential losses from market volatility at the same time.
Is there a way to work with REEF volatility to avoid liquidation?
REEF crypto volatility can result in liquidation. When you use your REEF to take a loan, it is important to monitor the status of your loan. CoinRabbit offers an instant alert system, which uses SMS and e-mail to inform users when there is a potential liquidation.
You can always add more collateral to adjust the Liquidation price of your loan. Loan collateral at CoinRabbit isn’t frozen; therefore, liquidation prices are adjusted immediately by adding more collateral or repaying your loan.
Aside from that, you can decrease the LTV at any time while the loan is open by adding more collateral. For example, CoinRabbit’s minimum loan LTV is 50%. CoinRabbit allows you to increase collateral immediately after opening a loan, so the LTV will decrease at a rate that suits you.
How to get a REEF loan in 4 steps
The application process for a REEF crypto loan has been significantly simplified thanks to crypto loan platforms like CoinRabbit.
- Choose REEF crypto as your preferred collateral on the homepage, under the Loan calculator section.
- By entering the amount of REEF crypto you want to deposit as collateral, the Calculator will show you the Loan Amounts you will receive, and click “Get Loan.”
- We will ask you to confirm the details, enter your stablecoin address, and verify your email address after clicking “Get Loan”
- Next, send REEF to the displayed address. After we receive your collateral, the loan will be sent to you immediately.
Conclusion
REEF crypto loans with CoinRabbit – is a great tool for crypto investors and holders: you can use a crypto loan to optimize your taxes, make a huge purchase, reinvest in new cryptocurrencies and many more while continuing holding your digital assets.
It’s important to remember that all operations with crypto are highly risky. When you get a loan with any crypto lending platform – don’t forget to check the status of your crypto loan periodically and add collateral if it’s needed to avoid liquidation of the loan.
