Celsius Network Weekly AMA– December 11, 2020

With Alex Mashinsky and Zach Wildes, Community Manager

This week’s AMA begins with some updates from Alex, followed by community questions. As always, the timestamp from YouTube is hyperlinked to each question below.

Summary: Alex starts off with the exciting news that Celsius’ recent audit with Chainalysis has been released and confirmed that Celsius holds over $3.31 billion in assets under management. Celsius’ swag store has tons of great new items, and as always, 80% of the proceeds go right back to the Celsius community. The current bug that has been preventing promo code rewards from displaying will be fixed this upcoming Wednesday, and CEL token is now available for purchase in the Monolith wallet, further helping Celsius to integrate with DeFi.

Celsius has a new promo code that gives a $50 reward on deposits of $2,000, but you’re going to have to search the website for it (hint: it’s all about trusting Celsius). Alex also discussed Celsius’ plans to roll out ETH 2.0 staking. This will be the first available pair to swap using the new in-app swap, and will allow users to swap between normal ETH and staked ETH 2.0. In other news, a German bank recently announced they will be issuing a Euro stablecoin, and this may be an option for Celsius to add to the wallet in the future. Furthermore, Alex briefly discussed the possibility of a Celsius debit card, and while he didn’t divulge any major details, he did say that “our card will be something that no one else has ever done before.”

Finally, Alex had a great monologue touching on why Celsius is so different from their competitors here. You should really listen for yourself, but ultimately it comes down to the simple fact that Celsius is working to change finance by always putting their community and their customers first. By aligning their business model so that Celsius only succeeds when the customer succeeds—this is how Celsius is so different from their competition, and that’s something that’s very hard to copy.

And if you’d like to earn interest on your crypto, gold, and stablecoins with Celsius, scroll to the end for instructions on how to get $20 in BTC when you sign up.

Updates with Alex

1. All about you. When we’re young, we want to be the best at everything. Instead, you should really focus on finding one thing, concentrate on that and then try and be the best in the world at that.
2. Celsius’ audit with Chainalysis. Celsius recently released the results of their audit with Chainalysis. You can read a press release here and can find the report itself here. This audit was conducted using Chainalysis’ blockchain audit tools, and confirmed that Celsius holds over $3.31 billion in assets under management.
3. Check out the swag store! There’s lots of great new options on the Celsius online store—shirts, hoodies, and more. And the best part is, proceeds from purchases in the web store go right back to Celsius depositors!
4. Buy CEL with Monolith! You can deposit in Euros or other currencies, it’s converted to DAI, and then you can use it to buy CEL. Another great onboarding ramp!
5. 5% OTC Discount is no more. We’ve been offering a 5% discount on OTC purchases, but that expires tonight. We’re also increasing the minimum back up from the promotional $10,000 up to the normal minimum of $25,000.
6. FDIC isn’t quite what you think. Banks in this country practice fractional reserve banking, meaning they have much more debt than actual assets, but they are insured by the FDIC. However, the FDIC only holds about $61 billion in reserves, but the top four banks in the US hold over $17 trillion in debts. So, this means that they’ve got less than 1% of the money they need, so really it’s just a label and isn’t meaningful insurance in the event of a major loss. But when you buy GUSD, or TUSD, or USDC, since these are trust companies, they’re required to use the dollars they receive to buy US treasury bonds, meaning that these assets are always backed by real dollars.
7. Gift your loved ones financial independence. Instead of buying them a fancy present this year, teach your loved ones how to get themselves to financial freedom. Following these seven steps are a great start: 1. Make a financial plan, know your destination (what you need) 2. Financial freedom means that you save and make your money work for you. 3. Reduce high-interest debt, don’t worry about good debt (low-interest mortgages) 4. Grow your savings, don’t buy frivolous things (and grow them faster in Celsius!) 5. Know how much money you need for retirement 6. Never stop learning, there are always new ways of earning yield 7. Manage your risk! Don’t put all your eggs in one basket, don’t over-leverage yourself.
8. Celsius is not a neutral platform. Most of the platforms you use—Aave, Compound, and any of the traditional finance companies—they are at best neutral, and are simply trying to make money from fees by pairing up buyers and sellers or lenders and borrowers. However, Celsius is working as hard as possible to extract as much money as possible from institutions and then gives this back to our community.

Community Questions

Q: Why did Celsius decide to incorporate in the UK?

Alex: At the time, it was unclear about what the regulatory structure would look like regarding crypto, especially in the US. The UK has some of the clearest laws around finance, as well. However, even though many countries are cracking down on crypto in one way or another through regulations, Celsius isn’t worried about this because we are always transparent with what we are doing and follow along with every regulation.

Q: When will the reward bug be fixed in the app?

Alex: Wednesday, there should be a new version released, and this will include the bug fix to properly display promo code and referral rewards as well as several other features.

Q: Will Celsius offer an option for people with less than 32 ETH to stake and earn staking rewards?

Alex: Yes, the first version of our swap function will be swapping ETH for ETH 2.0. Our ETH will earn the blended rate (lending out to institutions and DeFi), while the ETH 2.0 will only earn the staking rate.

Q: What is your opinion on Nexo? Are you threatened by your other competitors?

Alex: We’re not threatened by anyone. We publish our users, deposits, how much we earn, and how much we pay in interest—but not a single one of our competitors publish this information. What they do publish is vague and doesn’t make much sense. Celsius has an open API that allows many community sites (Celsians, CelsiusHub, The Financer) to play with our data and display it however they want—and again, none of our competitors do this either. The information is just not available—they don’t want for you to know how much money they’re making liquidating you, and these are the reasons why they’re opaque and not sharing.

Q: Can I attend the job fair while being a student? I can work part-time.

Alex: So the best thing if you want to work part-time is to start off as an ambassador. Zach runs the ambassador program, and you can pick something that you want to do that is unique and special such as producing content in another language or creating one of these sites that reviews or audits Celsius’ data in different ways. I retweet a lot of that, so if you want to see some of that content just head to my twitter.

Q: I plan to invest 1 million USDC with Celsius. Am I grandfathered in with the current rate against lower rates in the future?

Alex: The rates change every week—just because it hasn’t changed in several weeks doesn’t mean that it won’t go up or down. If you want to look at historical rates, head to one of our great community sites, Celsians.com. So I don’t know what the rate is going to be in the future—we don’t lock up rates, we only pay what we earn each week, whether that’s higher or lower.

Q: Do you think the market is getting saturated with crypto loans? Are we seeing too much leverage?

Alex: All markets have leverage. Fidelity gives you leverage on any of your stocks—and Bitcoin is not any different. The big difference is for retail users—when you go and take a loan from BlockFi, they charge you 2% up-front in origination fees, and then 4.5% on top of that for the loan. So I think the choice is easy—is it better to pay 1% per year with Celsius, or 6.5% per year with the other guys?

Q: What is the plan for the Celsius treasury in the future?

Alex: Look, we are just like the Federal Reserve for CEL token, except instead of being here to protect the rich people and the companies like they are, we’re here to protect the Celsius community. The Federal Reserve is there to keep unemployment low, and keep inflation low, both of which are important for big players in the economy. We know that more users, with more deposits, means that we’ll be buying back more CEL token each week. The fact that we haven’t touched any of our CEL token in the treasury just means that we think that CEL token hasn’t reached a fair market value yet. Once it does reach that level, then we’ll start to exchange some of it for BTC or cash or other assets.

Q: Can you let the community know that we (CelsiusHub) have launched the content platform so the community can translate content?

Alex: Yeah, that’s great—I know I’ve retweeted that in the past. Go help them out if you can. This is another great community effort that’s completely independent from Celsius. We support it and we love it.

Q: Are we going to see fiat support in Celsius?

Alex: So we already essentially have this available—in many states, working with our partners Gem and Wyre you can ACH dollars into your Celsius account and have it converted into USDC and start earning on it there. In Europe we’re working with other partners to be able to do this with SEPA as well.

Q: Are there any good Euro stablecoins that Celsius could add?

Alex: I just learned today that one of the oldest German banks is issuing a Euro stablecoin, so we’ll be looking into that and seeing if it fits our platform. The big issue was that we could not find a Euro stablecoin that we were comfortable with, because again we want to make sure that at any time you will be able to get your money back.

Q: How are payment rates calculated? Is it in the dollar value or in the coins themselves?

Alex: We get paid in coins—institutions pay us interest in whatever currency the loan is taken in (BTC, USDC, XRP, etc). For our users, half of them are earning interest in-kind, and the other half are getting paid in CEL—so we just take the BTC or ETH or whatever else we would’ve paid them and use that to buy more CEL.

So when you see large chunks of CEL disappear from the sell wall on Liquid, that’s Celsius buying. That’s not some whale buying; we are the whale. On behalf of our community, half of them already told us, “every week, don’t ask me, I want CEL token. Just the interest that I’ve earned is enough for me to retire on. The interest I’ve earned in the last two years is more than the money I gave you in the first place. Why? Because even though I earned only 6% or 7% on BTC, that 6% or 7% was in CEL token and that appreciated 10, 20, 50x, so now the interest is worth more than the principal. It’s not that we paid you some crazy rate that is unsustainable; it’s that the value of the token you earned used to be $0.03 and now it’s $2.20, and that’s what most people miss.

Most people that call us a shitcoin and say it’s unsustainable and whine and say…”Go to the BlockFi website, it says we don’t have a token, we are this and that, we file with the SEC.” Well, guess what, we also file with the SEC. Well, “but we have fancy investors.” Yeah, we have a fancy investor—we just don’t need it. When we wanted to be inclusive, we didn’t go to 16 billionaires, we went and opened it up to the community to allow 1,500 ICO’ers and then over 1,000 people through BnkToTheFuture to come and sit next to me and all of our employees on the bus. Now, you show me anyone else who has done that. Did Nexo do that? No. Look at their ICO. There were four participants in their ICO. Basically, they gave it to their rich friends. Look at BlockFi, look at Nexo, look at Crypto.com. We don’t even deserve to be compared to those guys. Because even though we didn’t have to — we had, again, tens of millions of dollars in cash when we opened it up to the community. We didn’t have to, we wanted to. We wanted all of you who participated to be on the bus with us and achieve those goals. Again, I’m not doing this for me.

The lesson here is that there is a better way, this is the way. There is no other way. You show me another way out of this. I spent the last 30 years thinking about this. And the reason I left everything, I dumped everything, and I focused on this is because I think we actually solved the puzzle. That is why we are doing this.

Q: What would the valuation be if Celsius opened up another equity round?

Alex: Celsius is already worth several billion dollars—just our CEL token in the treasury is worth over $700 million. If you look at our equity in the company—a common valuation is about 20x earnings for a company’s marketcap. If you take that formula and apply it to Celsius, we’re worth more than Coinbase—we’re more profitable than they are! It’s simple math—when people tell me that we are trading at a discount to BlockFi—they raised at a $400 million valuation last round. Just our CEL token and cash in treasury is worth double that.

Q: Do you think that the STABLE act will have an impact on users being able to earn high rates on stablecoins?

Alex: Look, I have friends in the US Treasury Department, and I don’t think they’re going to view stablecoins as an enemy of the US dollar, as I’ve written about before. The velocity (use) of the US dollar has been rapidly decreasing, while the velocity of stablecoins has been rapidly increasing! These are the same dollars, but the velocity of stablecoins in 20x that of fiat dollars. Instead of moving money around like the economy needs, banks are simply hoarding them, and stablecoins are helping to get US dollars moving again.

Q: What’s the new promo code?

Alex: It’s hidden on our website! So go digging around for it to try and find it, but don’t worry, it’s going to be around for a while. It’ll be a $50 reward for depositing $2,000, as a way to say thank you for trusting us with your money.

Q: Could you share any final thoughts you might have, Alex?

Alex: Sure, you can check out a video I recently did with Kitco here about price predictions for Bitcoin for the end of the year as well as moving forward. I think we will still have a lot of sellers above $20,000 for Bitcoin, and I think we’ll see a range between $20,000-$30,000 next year. I also do see dampening in the real economy, but the government will come through with more stimulus packages, and BTC and gold will hit all-time highs.

Q: What are the plans with the debit card?

Alex: First of all, congrats Ben on making $500 by being the selected question for this AMA! As you’ve seen from Celsius, we never copy other competitors or what traditional finance does. We’re not looking to charge you any fees, and our card will be something that no one else has ever done before. We’re not trying to charge you money, we’re trying to help you earn money. So just be patient, but I think you’ll be really happy when it comes out and you can finally get a card that works in your best interest.

Want to unbank yourself with Celsius (and get a free $20)?

• Install the Celsius wallet (https://celsius.network/get-the-app/)
• Use a referral code during registration (137247d31d)
• Deposit $200 of crypto or stablecoins

You will earn $20 in BTC once you hold your deposit for 30 days

…And click here for a step-by-step guide for onboarding with Celsius.