To the Reef Community,
We would like to share with you the latest development around Binance’s REEF staking product, and their recent unbonding of REEF.
On 1 June 2022, Binance launched a centralized, easy to access staking service for REEF on Reef Chain. This made it possible for millions of Binance users to easily stake REEF through Binance’s website, opening the doors to many more people to learn about Reef! These REEF tokens were bonded to Binance’s validators, and Binance distributed the rewards to its users.
Over the past two years, many trends have come and gone. DeFi, NFTs, yield farming, and others persist, but continue to evolve. Over time, the popularity of various apps and opportunities dwindle and people seek to try new things.
Recently, Binance made the decision to unstake a substantial amount of REEF, resulting in the majority of their validators being taken out of service. This action was taken due to a lack of demand for staking through the Binance platform, a service that has existed for over two years now. At the time of writing, Binance is maintaining one validator in the active set, reflecting the current demand for this product.
While we understand that this has raised some concerns, we want to assure you that this transition presents significant opportunities for the Reef Chain ecosystem! Reducing their resources to one active validator is a perfect reflection of where we are now, how much more sophisticated users have become over the past two years, and the increased desire for self-custody in the wake of various incidents have seen and experienced since Spring 2022.
Empowerment of Community Validators
With Binance reducing their validator presence, there is now a greater opportunity for community-run validators to step up and take an active role in operating the chain. This shift promotes decentralization and enhances the resilience and robustness of our network. In fact, several new validators have already joined the active set since 28 May 2024.
Increased Yield for Self-Custodial Staking
The percentage of REEF staked dropping to 20% means that there is now more staking yield available for individual participants. This is an excellent opportunity for those who prefer self-custodial staking to earn higher rewards. By directly staking your REEF tokens through ReefScan Console or Fearless Wallet, you can take advantage of these increased yields and contribute to the decentralization and security of the Reef Chain.
Strengthening Decentralization
The movement away from centralized staking through Binance encourages a more distributed network of validators. A decentralized validator ecosystem is vital for the long-term health and security of Reef Chain, reducing the risk of central points of failure and enhancing overall trust in the network.
Overall, we believe these changes mark a positive step forward for Reef Chain. We encourage our community members to consider participating as validators, or staking their tokens to new validators, to support the network. By doing so, you will not only earn rewards but also contribute to the strength and stability of Reef Chain.
We look forward to launching Reef Chain Wallet on iOS and Android, ReefSwap, Reef’s new browser extension, and more over the coming weeks and months, putting great tools directly into your hands!
We remain committed to providing a secure, decentralized, and rewarding experience for all our users. Thank you for your continued support and engagement.
Derek E. Silva
Operations Lead
Reef Chain
