With decentralized finance exploding in popularity, it only makes sense to look into the projects taking advantage of the movement to create income from crypto lending.
One of those projects that has seen massively increased attention and growth in its token value is the Celsius Network, a crypto lending and wealth management platform based on crypto that allows users to lend and borrow blockchain assets.
The backbone of the system is the CEL token, an ERC-20 token used within the platform to generate interest, take out loans, send peer-to-peer payments, and much more. CEL tokens rose nearly 500% over just two months during 2020, giving early adopters massive profits. The token continued to perform very well in the first half of 2021 before slowing down with the rest of the crypto market in the back half of the year.
Of course, the CEL tokens remain far more volatile when compared with more established coins like Bitcoin and Ethereum, but they could become a valuable part of anyone’s crypto holdings, particularly if you’re interested in using the Celsius platform to generate interest on your crypto holdings. It is noteworthy that users need to hold CEL tokens to get the highest lending and interest rates advertised.
The APY generating system employed by the Celsius Network is somewhat unique in the cryptocurrency ecosystem. It is a five-tiered system similar to the account levels you might find at forex and CFD brokers. The available tiers are none, bronze, silver, gold, and platinum. The tier each user falls into will depend on what percentage of their portfolio consists of the CEL token.
That’s an important distinction because the rates you’ll see advertised for interest are those paid out to platinum tier users. The platinum tier requires an allocation equal to at least 25% of your portfolio in Celsius tokens. So, if you’re holding $10,000 worth of crypto, at least $2,500 of it needs to be in CEL tokens. One thing I like about Celsius is that you don’t need to be a major crypto whale to enjoy top-tier benefits, as is the case with many crypto platforms. Celsius doesn’t play favourites. Whether you are a minnow or a whale, anyone can enjoy platinum-level benefits as the levels are dependent on the percentage, not the value amount of your portfolio.
Celsius Network Tiers
As mentioned above, to receive higher interest payments from the Celsius Network, you need to hold CEL tokens. The more you hold, the higher tier you fall into and the greater the interest rate paid on your tokens.
Interest is paid in kind or in CEL tokens. Meaning that users can hold Bitcoin and earn Bitcoin, hold ETH, earn ETH etc. If users choose to earn their interest in CEL tokens, they can boost their returns up to 30%.
Note that customers do not need to hold any CEL tokens if they do not wish, and they can still earn a pretty nice yield.
I compared this tiered system to forex and CFD brokers earlier. Celsius makes this comparison even more valid by calling these tiers a ‘loyalty system’. Just like with the brokers, the higher the tier in the loyalty system, the greater the benefits to the user. Of course, that means higher interest rates paid and a discount on any loans you receive from Celsius.
Here are the tiers and descriptions:
None- Users who hold below 5% of their balance in CEL tokens or hold 0 CEL get zero bonus rewards (but still earn base APY) and a 5% loan interest discount.
Bronze Tier – In the bronze tier, users hold 5-10% of their portfolio in CEL tokens or hold at least 1 CEL. This entitles them to 10% bonus rewards (interest payments) and a 5% discount on loan interest.
Silver Tier – In the silver tier, users hold 10-15% of their portfolio in CEL tokens or hold a minimum of 1,000 CEL. This entitles them to 15% bonus rewards (interest payments) and a 10% discount on loan interest.
Gold Tier – In the gold tier, users hold 15-25% of their portfolio in CEL tokens or hold a minimum of 10,000 CEL. This entitles them to 20% bonus rewards (interest payments) and a 15% discount on loan interest.
Platinum Tier – In the platinum tier, users hold 25-100% of their portfolio in CEL tokens or hold a minimum of 25,000 CEL. This entitles them to 30% bonus rewards (interest payments) and a 25% discount on loan interest.
Customers can transfer crypto to their Celsius accounts or purchase crypto directly from within the app. Additionally, customers can purchase crypto via debit/credit card and bank transfer. OTC options are also available for accredited investors.
Celsius has an impressive list of assets supported, including Stablecoins, Gold Tokens and Cryptocurrencies. Find a full list of supported assets here.
Celsius has partnered with Simplex to facilitate card purchases within the Celsius app. All users need to do is hit the “buy coins” button, select the credit card option and choose the coin and amount they want.
Note that to purchase crypto using a card, customers are redirected within the app to a Simplex page where they will need to fill out credit card information and their billing address and contact details.
Transactions can take up to 24 hours for the crypto to be credited to the customer’s account. Celsius does not charge a fee for card purchases, but Simplex does for its service. Users can expect to pay a 3.5% or $10 fee, while users in the EEA and UK may pay a lower fee of 2.99%. You can find more info from the Celsius knowledge article here.
Purchase via Bank Account
As with most crypto exchanges, bank transfers are generally the cheaper option. Celsius has partnered with GEM, which provides in-app coin purchases seamlessly within the Celsius platform. GEM works with two crypto providers: Wyre and Coinify, who can provide various tokens to Celsius customers.
To purchase crypto via bank transfer, users simply need to hit the “buy coins” button and select “bank transfer.”
The app will then direct you through the process of email verification, entering KYC details, then to a screen where you can enter your banking details. You can find a detailed breakdown of the entire process in the Celsius article here.
Purchases via bank transfer will take 3-5 business days, and the fee breakdown is as follows:
- Wyre – ACH transfer (US only) 0.1%
- Coinify – 0.5% manual bank transfer, 2% for credit card purchases (EU), 3.5% (non-EU credit card)
- Wyre – minimum 1 USD, maximum 5000 USD per week, and 20,000 USD monthly for bank transfers
- Coinify bank transfer – minimum 50 EUR, maximum 50,000 EUR per day
- Coinify credit card – minimum 50 EUR, maximum 1,000 EUR per day
Celsius have recently announced that they will be rolling out a Swap feature that will allow users to swap crypto assets directly within the app. The feature is currently in beta. This feature will allow users to swap, convert, or trade between crypto-assets.
This update has been anxiously awaited within the Celsius community. This will provide an easy way for users to swap their favourite assets directly on the platform. And the best part is Celsius will be rolling out this feature with no fees or spread! So those greedy exchanges could learn a thing or two.
The team plans to support as many pairs as possible. However, they mention that local regulations may prevent some users from swapping some assets. Asset support has not been 100% confirmed yet, but 26 assets are currently being tested in the beta, and daily swap limits are unknown at the time of writing; all the details will be released once the feature moves out of beta and goes live.
Here is a look at some of the features of the Swap function:
- no fees at all
- ability to swap/convert between crypto
- ability to sell crypto to stablecoins
- ability to purchase crypto using stablecoins
- ability to swap for more CEL tokens
- swap for higher interest-bearing assets
- swap out of lower interest-bearing assets
- no spreads (what you see is what you will get)
- quick, real-time quotes
- recurring purchases or swaps functionality (dollar-cost-averaging or DCA) or what Celsius call ‘buying weighted average cost’
- dust conversion (ability to convert small cryptocurrency balances to CEL or other supported assets)
Celsius Credit Card
As if a platform that pays HODLers crazy high APYs just for holding wasn’t enough, Celsius has also announced plans to roll out a crypto payment card in the coming months to make the platform even better.
Celsius users will be able to spend their crypto gains and rewards in-store and earn cashback for using the card. That means that Celsius customers can earn rewards from spending and earn a yield from saving. Talk about double-dipping on the benefits!
“Meh, I’m not convinced… I think I’ll stick with my bank, which pays me nothing for using my card and also pays me nothing for saving.”
– Said nobody ever.
Celsius explains that this card was created by HODLers for HODLers. Keeping true to the Celsius spirit, there are no annual fees, no late payment fees, no foreign transaction fees and no ATM fees, which is unheard of in the traditional financial space.
Whew, Celsius is cranking up the heat. Your move, banks.
Celsius is bridging the gap between CeFi and DeFi, providing access to a fee-free and easy token wrapping experience. CelsiusX will act as the DeFi arm of Celsius, allowing users to bridge their assets to the Polygon (and other blockchain) ecosystems and provide a Cross-Chain Liquidity Bridge.
CelsiusX is part of the Celsius mission to build infrastructure to bridge CeFi and DeFi seamlessly. Here are some of the functions that users will be able to perform with CelsiusX:
- Deposit crypto assets onto Celsius Network to earn yield or use as loan collateral
- Wrap crypto assets using CelsiusX wrapping infrastructure to a “cxToken” wrapping standard for withdrawal to target blockchains
- Use the CelsiusX bridge to send wrapped tokens from the Celsius CeFi ecosystem to various blockchains (the first launch partner will be the Polygon chain)
- Use the CelsiusX bridge to send assets from external blockchain ecosystems (starting with Polygon) to the Celsius ecosystem
CelsiusX Wrapped Assets
The Wrapped Token Platform will bridge different blockchain ecosystems, providing access to DeFi opportunities across blockchains, with no fees to users.
Wrapped assets are at the core of the CelsiusX liquidity bridge. Assets can be locked on one blockchain, while an equal number and corresponding value of wrapped tokens are minted on another network. These wrapped tokens can be redeemed for the underlying asset at any time.
CelsiusX Cross-Chain Liquidity Bridge
The CelsiusX wrapped token infrastructure enables the creation of tokens on a target blockchain. These created tokens are collateralized by assets locked on the native blockchain.
Celsius has created a cross-chain liquidity bridge that is different from existing bridges because they offer yield generation on both the target and native blockchains for ERC20 tokens. Furthermore, key actions such as minting are controlled by utilising a decentralised oracle service, allowing for a completely decentralised token wrapping service via a trustless bridge without any central agency.
Celsius Network Team
The very visible founder and CEO of the Celsius Network is Alex Mashinsky. Prior to creating Celsius, he was best known as the inventor of the VoIP (Voice over Internet Protocol). That’s a pretty big deal when you consider that it allowed us to talk with friends and family using the internet instead of the traditional telephone networks.
Along the way, Alex has been granted more than 35 different patents and has been a founding member of a number of successful companies, including Transit Wireless, which was valued at $1.2 billion at the time of his departure.
Alex is also pretty famous on YouTube, where he hosts weekly AMAs (Ask Mashinsky Anything) every Friday evening. This community engagement has undoubtedly helped him grow the Celsius Network. In addition, he occasionally interviews notable personalities in his MoIP (Money over IP) series. The most recent interview was with Chainlink co-founder Sergey Nazarov, but that’s just one of many blockchain founders and CEOs that he’s had on MoIP.
Alex is extremely experienced with technology. Given all his accomplishments and successful start-up companies, it’s safe to say he has achieved financial freedom himself. Now he is working to ensure that many other people can also achieve financial freedom through the Celsius Network.
There are a number of other notable team members also helping to grow the Celsius Network and dedicating their time to improving the financial standing of hundreds of thousands of Celsius users.
S. Daniel Leon is a co-founder of the Celsius Network. He currently holds the position of COO at the company. His background is also as an entrepreneurial businessman in the technology sector.
Nuke Goldstein is a third co-founder of the Celsius Network. His background is in software development, focusing on artificial intelligence, the internet of things, and blockchains. He serves as the CTO of Celsius.
Rod Bolger is the CFO at the Celsius Network. Rod previously held the position of finance chief at one of Canada’s largest banks and has over 30 years of experience overseeing financial operations for a global organization.
Celsius Network Safe?
This company has over 2 million community members and more than $19 billion in assets. So, it’s a pretty safe assumption to say that they can be trusted. But, if you don’t want to assume, you can also look at the more than $80 million in interest payments already made and the $8.2 billion in loans disbursed. And of course, there are always the loads of positive reviews of the platform all over the web.
The one downside to the platform, which will almost certainly make die-hard crypto-enthusiasts cringe, is that Celsius uses a custodial wallet. Yeah, that means they’ve got control of your keys, which is similar to if you were to keep your funds on an exchange or other centralized crypto platform. These days that isn’t always a deal-breaker, though, and many notable CeDeFi platforms operate the same way, but it is worth knowing before you invest.
Based on all the information we’ve been able to dig up, we feel like you can trust Celsius not to run off with your coins. We also think they are trustworthy when disbursing loans and paying the interest owed on held funds.
Celsius Brand Ambassador Program
There is no question that Celsius has a loyal following. There is much love for the platform and the company from the Celsius community. For users who want to do more and promote the platform or just spread the good word about crypto, community members can apply to become a Celsius Ambassador. Ambassadors have been deployed to help Celsius reach their goal of bringing the next 100 million people into crypto and do its part to help unbank the masses.
Some of the Ambassadors have utilized their skills to create videos in other languages, build websites dedicated to Celsius, promote the platform on social media sites, create tutorials and walkthroughs and write blogs and reviews.
Here are some of the tasks and skills that the Ambassador program needs:
- Translation services for print and digital media (social media streams like Twitter, Facebook and YouTube)
- Customer service for online support (like Reddit and Telegram)
- Website(s) dedicated to Celsius providing unique content, graphics, infographics and how-to’s
- Comparisons with competitors and how Celsius compares
- Social media posts and pages to create new and exciting communities within your geographic location
- Tutorials and how-to’s in videos and infographics
- Blogs and reviews
- and much more…
If this sounds like you and you are passionate about crypto, sign up as Ambassadors also get to enjoy exclusive access to upcoming news, promotions and contests, and maybe even earn a bit of cash.
Another way to get involved is through the Celsius referral and affiliate programs where users can share their referral links. For example, if a new user or affiliate signs up using a referral link and transfers at least $400 to their Celsius account and keeps it there for 30 days, both users receive $50.
Customer support is often an afterthought for crypto users, but it shouldn’t be. Customer support is essential, and it is good to know that a crack support team will come to the rescue if hits the fan!
While crypto companies are often notorious for deplorable support times, Celsius does a good job here. Celsius has taken a refreshing step back to basics and actually offer phone support! That’s right, real…live…phone…support. That is awesome. Sometimes, it can be easier to pick up a phone and call someone back in the good old days. Phone support is available Monday to Saturday, 10 am-11 pm EST.
If phone support and talking to humans isn’t your thing, Celsius also has a chatbot agent named Dana that can help direct you towards solutions for simple queries and issues. Then, of course, there is also email support, or customers can fill out a form on their site.
The Celsius email support responses are generally quite quick, which is nice; kudos to them. From personal experience and reading reviews online, support responses typically come in within 48 hours during normal volume operating times. Here are different support addresses:
Celsius also has a well-populated knowledge base section for the “do-it-yourself” type. I am a big fan of educational and self-help articles as crypto education is so important, and many questions or issues are often one brief article away from resolving. The Celsius help centre is a great resource to answer many questions that customers may have.
Other self-help resources include their YouTube video playlist for FAQs and tutorials, and folks can jump over the Celsius blog for insights and updates. Finally, don’t forget that many crypto platforms also have active communities on sites like Twitter and Reddit, where users can ask questions and chat with other community members who may be able to answer some questions.
Financial Considerations at Celsius
One thing anyone will want to know before signing up with Celsius and sending over some coins is how they stack up in interest payments and fees. After all, this is a financial platform and your interest in it is tied to making money or taking a loan.
Celsius beats out most of its competitors in this regard because the platform has no fees. There are no deposit or withdrawal fees, no origination fees, no default fees, and no early termination fees. There’s not a fee to be found at Celsius. Though, as explained above, the partners that Celsius have entrusted with the purchasing crypto options do charge fees, so be wary of that if you choose to purchase your crypto through the Celsius app.
Earning interest with Celsius
Earning interest through the Celsius Network is just plain simple. Create a wallet, deposit your coins, start earning interest. Immediately. Celsius begins calculating your interest earnings immediately upon receiving your coins, although the actual interest payments are made weekly. And you can withdraw your principal and the interest any time you like.
As mentioned above, there are no fees to pay to withdraw your money. However, you may want to consider holding some CEL since the interest rate is so much better when you reach the platinum tier. Though it is good to understand that the CEL token is more vulnerable to volatility than some of the more established high-cap cryptocurrencies, it is up to you to decide if the higher APY is worth the risk of holding CEL tokens.
Also, keep in mind that interest is deposited right to your wallet, so your deposit and interest payments will compound over time. That’s pretty powerful stuff.
Getting a loan through Celsius Network
Just as earning interest with the Celsius Network is simple, so too is getting a loan, as long as you have sufficient crypto available as collateral for the loan.
Note that you will need to take the loan in CEL tokens if you want the absolute lowest interest rate. That said, the rates on cash loans are so low you might not even care. How low, you ask? How about 1% APR for cash loans or 0.7% APR if you take the loan in CEL. I can’t imagine any bank coming even close to those loan rates.
CelPay is a nifty crypto payment app where you can send crypto to anyone, even someone who doesn’t yet have a wallet. CelPay is fast, easy and fee-free, allowing users to send or receive crypto directly from the app.
This is how modern currency moves. Image via Celsius.network
It also makes the process relatively simple. When you send the crypto, a link is generated that gives the recipient a CelPay wallet holding the coins that were sent. The link can be shared in any way you like, including via email and SMS. There are no fees for making transfers and creating wallets, and users can get 2% cashback by sending CEL. And if you don’t want to send CEL, there’s also support for Bitcoin, Ethereum, and over 30 other cryptocurrencies and stablecoins.
CEL Tokens Explained
The CEL token is an ERC-20 token running on the Ethereum network. It was launched back in June 2018 and raised $50 million in its ICO. At the ICO, tokens were valued at $0.30 each, but soon after the ICO, the coin price crashed to nearly $0.03, making it look like the project had little chance of profitability for early investors.
By early 2020 things were looking better, although the CEL token was still valued at less than half the ICO price, hovering just below the $0.15 level in the early months of 2020. Holding was going to pay off, though. In June 2020, the price spiked briefly and went as high as $0.46.
There was a pullback for a couple of months as things cooled off, but then in September 2020, the price began to rocket higher, and as of late November 2020, each CEL token is worth more than $2. Over that year, the CEL token is up more than 4,500%. Patience sometimes is a virtue.
The fact that CEL has moved above $2 is interesting because just 50% of the nearly 700 million total supply was issued at the ICO. Half of those went to the Celsius team, and the remaining 50% was locked in a smart contract that allows release for new loans when CEL is valued at more than $1.50 for ten days or longer. That milestone has been passed. The rest of the tokens can be released for new loans if CEL is valued above $3 for more than 30 days.
Fast forward to 2021, the CEL token saw a parabolic rise with many other tokens in the first half of the year, reaching an all-time high of $8 before the markets stooped in May and CEL came tumbling back down alongside the broader crypto market. In Q1 of 2022, the CEL token’s price continues to struggle with the rest of the crypto industry amidst all the global macroeconomic uncertainties.
Many people feel that these are bargain sale prices for the token and have been accumulating as they think it will ultimately be CeDeFi platforms such as Celsius that will have the most to gain once crypto reaches mainstream adoption.
There are several utility cases for CEL, but primarily it is used to stake in the system and receive higher interest payments and discounts on loan payments.
The CEL tokens can be used to:
- Send and receive payments
- Receive interest
- Pay interest on loans (up to 25% less)
- Hodl to earn high bands of interest rates (up to 30%)
Based on the massive growth in the value of the CEL token and mass adoption of the platform, it seems like the system’s mechanics are working. As a result, Celsius has become massively popular and is one of the leading lending and borrowing crypto platforms.
According to Celsius, over 50% of those users choose to take their interest payments in CEL tokens, which helps explain the coin’s strength. In addition, the Celsius Network also buys CEL tokens each week on the open market to make interest payments to users.
Of course, we are still in the infancy of DeFi, CeDeFi, and the Celsius Network, but so far, everything is looking pretty darned excellent for the growth of a vast, wealthy, and powerful financial network.
Is Celsius Network safe to use?
Celsius follows industry best practices and is as safe as a custodial platform can be. They use top-tier security and cyber defence to protect their customer and company funds. Celsius is Security ISO certified, runs a 24/7 Security Operations Center and employs a team of cybersecurity experts.
Celsius also features some excellent security options that users can deploy to ensure their crypto remains as safe as possible. Security minded users can:
- Enable two-factor authentication
- Enable biometrics
- Activate HODL mode
- Whitelist withdrawal addresses
Though all this being said, there’s just one small problem with using the Celsius Network, and we hinted at it before. When you use their service, it’s custodial, which means you’re turning your keys over to them. That does open up the possibility of a hacking attempt hitting Celsius and your coins disappearing into some thieves’ wallet. Therefore, it’s always safest to hold your private keys and store your coins either in a hardware wallet or offline in a cold storage wallet.
Though to play devil’s advocate, this point is arguable as many crypto users feel that the risk of them losing their private keys or mishandling their crypto wallets is a more likely scenario than a hack. So if you are notorious for being your own worst enemy, being disorganized and misplacing or losing documents, then self custody may not be the safest option. Another valid argument is that many crypto HODLers feel it is too risky NOT to use yield generating platforms like Celsius. The interest you earn today could be worth a fortune tomorrow, so why let crypto collect dust in a cold storage wallet? I guess everyone has their own biases towards risk.
If you are going to take advantage of the juicy interest rates offered at Celsius, you’ll also have to accept the risk of depositing your coins with a custodial platform. If you can trust that arrangement, you’ll find some upsides.
Platforms like the Celsius Network are the perfect onramp for new cryptocurrency users. When they learn that they can earn 10-20x the interest they would earn from a traditional bank, they are quick to jump to the platform. If there’s already a good amount of adoption, the platform is easy to use, there are good reviews and nice perks, new users won’t think twice about depositing their crypto in a custodial wallet.
It is also worth noting that Celsius is trying to make itself as trustworthy as any other financial institution and are keen to work with regulators, not against them. Celsius has received licensing by the U.S. Treasury Department’s FinCEN unit and the Securities and Exchange Commission in the U.S. Regarding the safety of funds, Celsius stores its assets with third-party custodians who provide full insurance on coins held. So while you can still say “not your keys, not your coins”, there is no custodian service that will be any more secure and protected.
Celsius has been an extremely successful blockchain lending platform. It has been around since 2018, and it was the first blockchain lending platform to reach $1 billion in funds under management. The strong leadership team very likely has something to do with that, as does the $50 million raised back in 2018 to get the project off the ground and the further $400 million raised in late 2021 to expand the product features.
So far, the largest customers of the platform are hedge funds and exchanges that are looking to earn interest on their crypto balance sheets, are performing arbitrage, or are seeking to create new markets. With the DeFi and CeDeFi movement in full swing, Celsius is also seeing massive growth and adoption from retail users. That might be a good part of the reason behind the appreciation of the CEL token and the rapid-fire growth of the company.
Of course, there remain concerns over Celsius being a custodial platform. There are other concerns regarding a lack of transparency from the platform, regulatory crackdowns on lending platforms, and the uncertain future of stablecoins. In short, it would be good to know to who Celsius is lending their customer balances. There are also some concerns that the CEL token could be defined as a security by regulators in the U.S.
In general, though, we believe Celsius is a very solid lending platform. The loan interest rates are as low as you’ll find anywhere, and the interest rates for depositors are as high as you’ll find from most blockchain platforms, especially if you’re willing to hold enough CEL to get to the platinum tier.
So long as you are aware of the risks of using the Celsius Network platform, we see no reason not to use your crypto to its best advantage.
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