Reef Network is dedicated to incorporating centralized exchanges and decentralized exchanges together, thereby offering higher amount of liquidity to users, ranging from the crypto traders to managers. This platform currently boasts of a team that is filled up with experts in the blockchain world, as well as innovative entrepreneurs, who have the necessary knowledge when blockchain, finance, engineering and cryptography are concerned.
It is currently hosted on Polkadot, which is the next generation L1 network. Polkadot is focused on offering interoperability of different chains, thereby allowing them to communicate with one another. In the process, their separability feature is not tampered.
Polkadot permits different and independent chains to effortlessly communicated and be linked together. It wants to create a type of “internet of blockchains”. Here, the chains may be different and firewalled from one another, but they will still communicate effortlessly through a previously created state-transition feature. It will take the form of the internet handshake protocols that allows networking to occur.
Perks of Polkadot
At this point, we will analyze why Reef Finance opted for Polkadot. Below are the perks that Polkadot offers.
1. Total Interoperability:
Reef Finance team is dedicated to ensuring that its platform becomes the first ever cross-chain DeFi yield engine and liquidity aggregator. Polkadot is designed to a low numerous different consensus protocols to operate effortlessly. Both open and closed networks can work, meaning that it will be easy to attain interoperability. The liquidity providers, from both sides of the ravine, centralized and decentralized can easily work together.
2. Flexible and Open Source Underlying Architecture:
Substrate powers Polkadot, and the former is wholly an open source infrastructure project, which means it can be utilized in crafting blockchains that are compatible with Polkadot.
Reef intends to usher in more complex functionalities and they may need a custom state-transition feature. This means that it may be necessary to churn out a chain that is compatible with Polkadot, which will be easy since Substrate is open source.
3. Economic and Transactional Scalability:
One issue that Ethereum and other older smart contract platforms possess is lack of scalability. Polkadot is designed to solve this issue. It is common to see users of Ethereum complaining about network connection, high transaction fees, and the likes. One may even cone across irregular market behaviors, which are largely unseen in Polkadot.
Instead of using a network that suffers from scalability issue, which may translate to high gas fees, Reef decided to do the opposite. Its decision to use Polkadot means that the issue of high gas fees may not become an issue with Reef. This will ensure that the gas fees do not take a large chunk of the profit made by farming or staking.
Reef Network choosing Polkadot seems to be an awesome choice, as it has tackled the issue that many DeFi platforms face when they utilize technology with scalability issues. Users can carry out transactions without having to worry about exorbitant gas fees that are common in Ethereum.
