Celsius Network Weekly AMA– January 1, 2021
With Alex Mashinsky and Zach Wildes, Community Manager
Summary: Alex starts off with the exciting news that Celsius just had a record week, with over $312 million in deposits and 4,600 new depositors. One of the reasons for this massive influx is likely CEL token’s rapid increase in price. As such, the Top 200 CEL holders are now all millionaires, and so Celsius will be expanding this list to now exclude the Top 500 holders, with the new goal of making all 500 of them millionaires as well. A scavenger hunt to find a new promo code on the website will launch soon— follow Celsius’ twitter for updates on when it goes live. Additionally, Celsius’ web app will launch early for platinum users on January 15th. Alex and Zach will do a demo of the app during the AMA, and after a short testing period the web app will rollout to all users.
Regarding new coins and tokens coming to the app, Alex announced that ADA (Cardano) would be added in Q2 of this year, and that 1INCH and AAVE tokens would also be coming very soon. Celsius’ in-app swap will be going live in February, and will also work when HODL mode is enabled. As a reminder, this in-app swap will have no fees and will launch with support for ETH and staked ETH 2.0 swaps. In other news, it’s important to note that the issues currently facing XRP do not apply to CEL token or Celsius. Celsius worked hard to ensure compliance with the SEC (registering CEL token when it was launched), and has always treated CEL token as if it were a security until the SEC provides regulatory clarity. Furthermore, Celsius is still borrowing and lending XRP because of a 5-year grace period that was recently granted to all broker-dealers. Bottom line, Celsius is always vigilant and works with regulators to ensure full compliance.
Lastly, the past year has been an incredible one for Celsius—going from $550 million to $5 billion in AUM, 30 employees to over 150 (including 30 new employees for a call center), and paying $440,000 in withdrawal fees for users. Looking forward, Alex set goals of $10 billion in AUM and over 500,000 users. The future does look bright, as institutions are now accepting CEL token as collateral for dollar loans (decreasing Celsius’ cost of capital), and Celsius continues to add more exchange partnerships and integrations—including the recently released Liquid Earn, and another previously mentioned “mega deal” that has yet to be announced. Stay tuned for a great 2021, friends.
And scroll to the bottom for current Celsius promo codes (free money), sign-up guides with referral codes for both Celsius and Coinbase (more free money for new users), and my Gitcoin grant (support these write-ups).
Updates with Alex
- New segment: Rapid Fire! We’re doing a new segment on the show today, where Zach will hit me with several of your questions back-to-back so we can answer all of them—I think he already has 20 lined up.
- What is different in this economy? We’ve had recessions before, but this is the first time where we are having a service economy recession. When you have a pandemic, these services get hit really hard—and they will take a while to get back to normal. To help combat this, the US Federal Reserve is flooding the market with dollars, which is is slowly eroding the purchasing power of each US dollar.
- A record week. Over $312 million in deposits last week, and 4,600 new depositors— we have crazy growth going on right now.
- Celsius media blitz. Back in January 2020, I predicted that BTC would hit $30k by the end of the year—I was only off by a few hundred, but now I’m saying that I think we will have a correction to around $20k. There’s a great chart on TradingView with the CEL Channel of Dreams, following CEL’s price action. Also, I’m doing an AMA with Charles Hoskinson and Crypto Crow—so make sure to tune in to that. I can also confirm that we will be adding Cardano (ADA) in Q2 of this year.
- Stats for 2020. We started the year with 550 million in Assets Under Management (AUM), and are closing the year with over $5 billion. We started the year with 30 employees, we now have over 150. We are hiring 30 new employees for the call center, and have 15 new employees starting on Monday. We paid $444,000 in withdrawal fees for our users.
- Top 200 is expanding. Since all 200 of the members of the Top 200 are now millionaires, we will now be expanding this list to the Top 500. Our next goal is to make the Top 500 holders all millionaires.
- Predictions for 2021. It’s hard to predict the future, but we expect to have over $10 billion in AUM and over 500,000 users. I do think that BTC is going to either go over $100,000, or just oscillate between $30,000–$50,000. Right now it’s too much too fast, and I think we’re bound for a healthy correction soon. Our advice is to stay the course—don’t try to become a pro trader, just HODL.
- Flashback to 2017. Since the beginning, we’ve been focused on bringing wealth and great financial services to normal people instead of just to the top 1%. We’re pulling money from big institutions and giving it back to our community.
Alex: There are very few companies that did file with the SEC, and we are one of them. When XRP was crashing, you saw several other cryptos crashing that investors were similarly worried about because of their potential status as a security. Celsius is still able to accept XRP deposits and lend it out to institutions, and we know that this is still a perfectly safe thing to do due to recent guidance released for broker-dealers, giving us a 5-year safe-harbor.
Alex: We definitely will be locking them back up again—and our employees who locked their tokens at $1.50 got a great deal, because now their tokens are worth almost 4x! So no one is in a rush to sell them. As a reminder, we split the 25 million tokens from the $3 unlock across $3, $5, $10, and $15, but we’ll announce our plans with that once we finalize it.
Alex: If you’re in crypto, it’s very simple—just keep your assets in the Celsius wallet. Hold on to your crypto, don’t trade, and don’t cash out into dollars that are going to be rapidly decreasing in value. This way you’ll keep seeing your assets appreciate instead of losing value to inflation or vanish because of a bad trade.
Alex: We’ll do a special AMA on January 15th where we walk everyone through the web app—and this will be opened up to platinum users first.
Alex: I always tell you to pay off your credit cards first—those interest rates are ridiculously high. You want compounding interest to work for you, not against you.
Alex: Yeah, you can sign up via our corporate onboarding platform and deposit any of the assets we support.
Alex: Yeah, we’ve talked about it before, and once we have something ready, we’ll announce it.
Alex: Yeah. (Editor’s Note: Celsius has $20 million insurance per event through their infrastructure provider, Fireblocks. Additionally, since Celsius’ funds are almost always fully deployed, there is not a centralized location where funds are kept. Finally, Celsius has a balance sheet of $100 million in cash and over $1 billion in CEL token to cover any potential losses.)
Alex: Since we take 4x the collateral, we are no longer paying interest on that collateral and are now able to lend it out to generate profits—and we can make anywhere from 10–20% on capital we lend.
Alex: Yes, we support fiat transfer (via ACH or SEPA) and convert it directly to stablecoins in the app. We can’t earn yield on fiat, but we can earn on stablecoins.
Alex: Institutions, exchanges, DeFi, and mining operations.
Alex: Until there’s a determination whether CEL is a security or not, we are acting as if it is a security to be safe, and that’s why we don’t allow users to earn in CEL but are opening it up to accredited US investors. US users can buy CEL legally, but we just can’t pay it to you as interest on a different asset.
Alex: We’re not trying to convince users to stop using their Ledger or their Trezor and give us all of their coins. There are many people who are happy to do this, and we think that’s great, but the next wave of users is not going to be able to do that well—they can barely manage their google password, and you want them to keep track of private keys? You can always hold your own keys, but if you want to earn yield, you need to either find ways to generate it yourself or deposit your funds with someone like Celsius.
Alex: When someone on an exchange wants to leverage buy more BTC, but they only have BTC in their account, someone needs to lend those stablecoins to the exchange so they can lend them to their users who are trading. I’m not saying that these rates will last forever, because the market will eventually become more efficient, but for now we can pay these high rates because we are earning them.
Alex: We’ve proved that our model works in an up market, in a down market, and in a sideways market. We’ve paid $205 million in interest to date—and we just had our audit with Chainalysis to verify our AUM.
Alex: There’s plenty of information about that on CelsiusHub.com, as well as Celsians.com, and on our website.
Alex: No. We may decide to go public so we can get broader participation, but we don’t plan to sell the company to Coinbase or anyone like that.
Alex: If we’re not profitable, yeah. Say the market collapses and no one wants to borrow coins, and we’re burning cash that we have, then we’ll need to decrease that percentage.
Alex: If you truly believe in many of the things we’ve discussed, like the deflation of the dollar, you can’t predict exactly when this is going to happen. Today, 80% of the transactions in the world are conducted in dollars—but you never know when this could come crashing down.
Q: How will Celsius handle the astronomic rise in CEL token price? Will you start distributing from treasury or lower the CEL-on-CEL rate?
Alex: The main question you should be asking is if Celsius is earning yield on CEL token. We are working on new ways to make money on CEL token. In the past, we’ve used BTC as collateral to borrow dollars, but now institutions are accepting CEL token as collateral—so this lowers our cost of capital. As long as we can generate yield on CEL, then we have no problem paying the community and may even be able to increase the rate.
Alex: Most of the time I feel like I’m spinning plates on sticks—today I’m helping the team with solutions, management, hiring, and onboarding the dozens of new employees we’ve been hiring.
Alex: DOT, 1INCH, AAVE—COMP is already live in the app. We are adding coins and tokens that earn yield and will continue to do so. And don’t forget ADA coming in a few months!
Alex: So the Southern District of New York is suing Tether already—but it’s a very complicated case. I think the Biden administration will need to issue some guidance for stablecoins, so we’ll see about that. Janet Yellen leading the treasury wants the dollar to be strong and for any stablecoins denominated in dollars to be safe, so I think they’ll focus on that. The US dollar has low velocity in traditional markets, but very high velocity in crypto markets—so it’s something they should be supporting for sure.
Alex: We’re a hot commodity! No, there isn’t a scientific explanation, we just wanted to come up with a name that was unique, and that most people could spell—Fahrenheit was too hard to spell, so we just went with Celsius.
Alex: Yeah, we’ve got two or three of them that we’re going to be adding to the website soon.
Alex: It’s coming soon, we’re testing it now—no fees, lower spreads than anyone, cheaper than anywhere else—we’re not trying to make money on this. And you’ll be able to do swaps inside the wallet even if you have HODL mode turned on. Coming in February.
Alex: Yep, I found two of them, and they’re actually starting on Monday.
Alex: So you can gift tokens to others for tax reasons, and I took advantage of this. So I gifted ~13 million CEL to my wife, and then we each gifted a large share of our holdings into trusts for our children for the future. So the tokens are still in the Top 200 and in the app, they’re just not under my name anymore. I’ll be tagging these CEL tokens soon so everyone can verify this.
Alex: It’s coming, I can’t announce it yet—but as a sneak peak, Liquid announced they’re offering yield now, and guess who they’re partnering with? That’s not the mega-deal that I’ve previously mentioned, though.
Alex: Currently we’re pursuing many licenses, but we’re not trying to be a bank. Being a bank comes with a tremendous amount of liabilities and responsibilities, and will prevent us from doing many of the things we’re doing for you today. We’re trying to get licenses to offer additional services and also partner with banks where it makes sense to expand the services we can offer to our users.
Alex: There’s no specific time, we just buy throughout the week and it varies from week to week.
Alex: It really depends on what happens there, I think the government issued something like 40 licenses. We’re waiting to see what happens there, but right now we have to partner with other license holders.
Alex: To hold fiat, you have to be a bank, and Celsius is not a bank. We have partners like Gem and Wyre who can process the fiat transactions for us, but we cannot take fiat to stay compliant.
Q: Are there any plans to denominate BTC in Satoshis to make it easier to read and better for new users?
Alex: Yeah, I think when BTC goes up to $100,000 or more then we’ll start to see Satoshis used more.
Zach: Cash app actually started doing this recently. Also, on the website, we’re going to have a very clever hidden promo code that you need to find! We’ll announce the scavenger hunt when it’s live on Twitter.
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
Current Celsius Promo Codes
- WELCOME20: Deposit $20 in any asset, get $20 reward (must be first promo code, for new users only).
- WEB30: Deposit $200 in any asset, get $30 reward (must be first promo code, for new users only).
- TRUST: Deposit $2000 in any asset, get $50 reward.
If you find my work helpful and would like to donate to support it, you can use the addresses below or find my Gitcoin grant here. Thanks! 🙂
- ETH/ERC-20: 0xF8030E71e3F5A6B0F4E3EF4324f5Dd55F4d679BD
- BTC: 3JteiJoCdF2gsTbD8YB1YBKerCCpXb5P5n