Celsius Network Weekly AMA– January 15, 2021

With Alex Mashinsky and Zach Wildes, Community Manager, and Shehan Chandrasekera, Head of Tech Strategy at CoinTracker

Gradients on gradients on gradients! 🌅

This week’s AMA begins with a dope new intro (amazing job, Tom!) followed by some updates from Alex, a short tax session with CoinTracker, and then community questions. As always, the timestamp from YouTube is hyperlinked to each question below.

Summary: Alex starts off the AMA with the exciting news that in just the past two weeks, Celsius has had $227 million in net deposits, as well as 39,000 new users registered with $80 million in net deposits from these users. One unfortunate side-effect of this massive increase in users has been that Celsius’ support has become completely overwhelmed with tickets, in large part due to a promo code bug. As a reminder, Celsius is actively working to fix this, and you will be credited the proper amounts. Also, if you have a question about your loan, email the loans department directly at loans@celsius.network to get much quicker turnaround times.

In other news, CEL/ETH is live on Loopring’s L2 AMM here. Loopring is a Layer 2 scaling solution for Ethereum using zkRollups, and allows trading with virtually no gas fees. Alex also revealed that Celsius would be announcing a new exchange listing partner in the next few weeks, and this partnership will include no withdrawal fee for CEL token. Multi-collateral loans are still a work in progress, Pound and Euro deposits will be coming to the app, and DOT should be added after some final testing. Celsius has also integrated with CoinTracker, which will allow users to easily import their tax data from Celsius to simplify the process. CoinTracker currently supports the US, Canada, the UK, and Australia.

Finally, Alex discussed the previously announced “mega deals,” and clarified that while one was finalized, another wasn’t finalized but was looking good. One of these companies has about 300 million customers, and the other has over 200 million. Team bonuses originally set to unlock at $3 have now been pushed out to $5, $10, and $15, but even at those levels I wouldn’t expect many tokens (if any) to be sold by the team. The web app will be demoed next week during the AMA and will be available to platinum users first. In-app swap is coming in a few weeks and will support all assets, barring any local restrictions. Lastly, Alex announced that Celsius would be partnering with Visa for their card offering, and that it would be “something that the card business had not seen before.”

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

1. What is money? The answer isn’t quite as easy as you think. We started with barter (chicken for bread), then moved on to rare metal coins, to notes backed by coins, then ultimately to fiat currency backed by no hard reserve. We know that another $1.9 trillion is going to be printed, meaning that 30% of all US dollars will have been printed in the past two years, and over 75% of all US dollars will have been printed since 2008.
2. How does money make money? The entire business of banking is making money from money—lending out money, and earning yield on it. When you look at who makes the most money each year, it’s those who do asset allocation—some of these guys make billions of dollars each year, and we as a society celebrate them. This value creation comes from significant risk taking—but we should be celebrating those who made money while taking the least amount of risk. This is why it’s so important to understand what is happening with your money, and why we take so much time to understand the various risks of where Celsius deploys our assets.
3. Two apologies. I definitely called the downturn in BTC too early—and I was probably too vocal about that. The second apology is for our customer service. We get tens of thousands of tickets, and a lot of it has to do with us 4x’ing our customers over the past few months, but a lot of tickets have to do with the promo code bugs. Everyone is going to get paid, and everything should be good for new users—it’s just previous users who used previous codes who are still having issues that we are resolving.
4. Crypto news updates. Christine Lagarde, head of the European Central Bank, is discussing Bitcoin being used for money laundering. She’s a great economist, but she’s always going to see Bitcoin as a threat, because she’s from the old guard. You should also follow Kevin on Twitter, he hosts great events for the community and is a great supporter of Celsius. Also, I know a lot of people have been curious as to why my number of CEL tokens have decreased, but I’ve said in the past that my wife and I both moved large chunks of CEL into trusts for our children to take advantage of a tax benefit, and these other four wallets are now marked here on the Top 500 as “The Machine.” Additionally, I recently moved about 1 million CEL token to my personal wallet so that I could increase my CEL/ETH LP position on Uniswap, making it easier for the community to trade. Celsius also has our own Medium, with great recent posts by Harumi and Waseem.
5. Trade CEL token, gas free! CEL token has been added as the CEL/ETH pair on Loopring, a Layer 2 zkRollup solution that has both an orderbook decentralized exchange (DEX), as well as a recently launched AMM (Automated Market-Maker, like Uniswap). We love this because we want for our community to pay as little fees as possible, and removing gas fees is a great first step. Go check it out and buy CEL token with no gas fees!
6. Loan questions have their own email. If you have a question about your loan, email loans@celsius.network directly, to bypass the 14,000 messages in the queue for app@celsius.network.
7. Celsius video clips. Here Zach showed some amazing videos (Tom is really stepping things up!). In the first video, Kevin discusses the value that Celsius brings to its users, and the second explains the Celsius Flywheel. Go check them out!

Tax Q&A Session with Shehan Chandrasekera, CPA, Head of Tech Strategy at CoinTracker

Alex: Celsius has integrated with CoinTracker, so if you use their software you can seamlessly import your data from Celsius. I also just want to make sure that everyone knows that you don’t have to pay taxes on appreciation of your assets, only on the value at the time you received it. Also, I get so many questions from Australians about filing taxes—and one of the reasons we did this partnership is because CoinTracker works in which countries, Shehan?

Shehan: The US, Canada, Australia, and the UK. And actually, we have a promo code for Celsius users that will give them 10% off that I’ll give to Zach.

Q: What other crypto advice can you give us about good things and bad things that people do when they file crypto taxes?

Shehan: First of all, make sure to check the box saying that you have cryptocurrencies. There are a few major taxable events in the US:

• When you cash out your crypto
• When you convert one crypto to another
• Earning rewards from staking, or interest like from Celsius
• When you send crypto as a payment, this counts as selling it
• When you receive crypto as part of an airdrop or fork

Alex: Also, the IRS has announced that they are moving from education and warnings to actual enforcement of tax rules with crypto holders, so they’re going to start being a lot more aggressive about this. I normally don’t give financial advice, but I’ll give you this advice—pay your taxes!

Q: A lot of us are getting great rewards every Monday, but we’re not having any of it taken out for taxes. What should be we doing tax-wise for that throughout the year?

Shehan: If you’re making a lot of money from this interest, I would recommend sitting down with your CPA every quarter, looking at your taxable income, and seeing if you can figure out your tax bill for that quarter and pay it each quarter so you don’t get a penalty for underpayment. In general, it might just be a good idea to keep 20% or so of your earnings in a stablecoin just to make sure you have enough to pay your tax bill at the end of the year.

Zach: And just to add on to that, we will be issuing 1099s for everyone that needs them, and those should be coming in the next week or so.

Community Questions

Q: When is the Celsius dating app coming?

Alex: Celsius dating app? There’s only 15% women in crypto, so if you’re looking for men, fine, but if you’re looking for women we’re going to have a really tough time finding you a match. And my wife is already taken, so don’t try anything there!

Q: Where can I buy CEL token affordably?

Alex: You can buy it with a credit card in the app, you can buy in on Uniswap, you can buy it on Liquid, you can buy it on FTX. We are going to announce next week or the week after an exchange who decided to not charge any fees, but we will have a no transaction fee, no withdrawal fee partnership soon. If you’re buying a big chunk ($25,000 or more), the best deal is by emailing otc@celsius.network. (Editor’s note: If you’re in the US, Uniswap is your best bet, hopefully when gas is low, and outside the US I’ve heard FTX has very low fees).

Q: Can I pay off my loan early?

Alex: Yep, you can do that—you just need to pay the first six months of interest, but at 1% that’s almost nothing.

Q: Will Celsius continue to support XRP?

Alex: The lawsuit is in the US against XRP and affects US users, so we’re planning to follow the lawsuit and take action based on what happens in the lawsuit. You’ve seen Coinbase and Grayscale delisting XRP for US users, and we’ll likely have to follow them by doing the same for US users.

Q: What are the top two things that make Celsius different from their competitors?

Alex: The biggest difference is that Celsius is not neutral. We are not a neutral platform between buyers and sellers or lenders and borrowers, we are trying to extract the most value possible from institutions for our depositors. Also, the CEO (me) has over $200 million of his own money sitting right next to you in Celsius—you’re not going to find another business in crypto where the CEO has done that.

Q: Why has customer service been so bad recently?

Alex: The truth is, we did not expect to grow our user base nearly as quickly as we did in December. When that growth came in, paired with the promo code bug, our support collapsed under the strain of all of those messages. We’re hiring more people, we’re fixing the bug, and we are hoping to be back to normal in the next week or two. Again, I apologize—this is not normal for Celsius, this is not how we do things, this is not the way.

Q: Could you tell us what the stats are like since the beginning of the year?

Alex: Since January 1st (two weeks), $227 million in net deposits, 39,000 new users registered, with $80 million in net deposits from these new users. This past week we’ve had 15,000 signups, 2,500 new users who made deposits, and $47 million in net deposits—and again, you can always track inflow and outflow on the blockchain.

Q: Why do you no longer have a 33% LTV option for CEL token?

Alex: Part of us protecting the community is slowing things down when they’re moving too quickly. If CEL token is going up too quickly, or if too many people are taking out loans and leveraging to buy more CEL, then we need to pull things back a bit. We want steady growth over time, with AUM, community, depositors, and CEL token all growing steadily.

Q: Do you have an update on the web app?

Alex: Yep, we’ll be doing a live demo of it next week! And it’ll be opened up to our platinum users first, and then a few weeks later to everyone else.

Q: Last week we were unsure if there were one or two mega deals, could you clarify?

Alex: So there’s one mega deal that’s finalized, that we’re just waiting to announce, and we’re working on a second mega deal where we haven’t come to terms yet but it’s looking good. For one of them they have about 300 million customers, and for the other one they have over 200 million customers.

Q: Can Celsius continue to grow at the same pace it has for the past few years?

Alex: So we’re actually accelerating—we’re growing faster now than we ever have. A lot of it has to do with excitement in the community, but even just the $30 promo code on the website has been huge for getting new users to deposit. Instead of paying money to advertisers, we prefer to give it to our users.

Q: Once in-app swaps are live, will all assets be swappable or just ERC-20s?

Alex: No, we support 14 blockchains, and the in-app swaps are not going to have to leave and actually be swapped on the blockchain. This will give you the best price with instant settlement from within the app—I can’t wait for it to come out.

Q: Was there a team bonus at $3? Were those tokens sold?

Alex: So we decided that giving our team bonuses at $3 just a few days after they got bonuses for $1.50 wasn’t fair to our community, so we bumped up the milestones to $5, $10, and $15, so the next one will release after 30 days straight above $5. All of these big awards are locked up and are not affecting the market today.

Q: When will the card be coming? Will it be debit or credit?

Alex: My last call before the AMA was about the card program, and we have a few partners. This is a program that Visa or Mastercard have never done in their history, but we are partners with Visa, we’re joining one of their programs, and it will be something that the card business has not seen before. It will definitely not be like BlockFi’s card, which is charging you an annual fee. It’ll be in your best interest, and you’re not going to need another card.

Q: Do Europeans have the option to take their loans in Euros?

Alex: We support Euros for certain transactions for institutions, but we currently don’t support it for retail, but we are working on both Pound and Euro deposits, so that’s coming but it’s not ready yet.

Q: Is Celsius still planning to add DOT?

Alex: Yep, it’s still just undergoing some final testing, but we will be adding it.

Q: Is it possible to have a limited account for children or grandchildren?

Alex: Currently you can’t create an account without an ID, so in this case just have another adult create an account and use that, or just deposit your child’s funds into an asset that you don’t use. Allowing sub-accounts is something that is on our roadmap but has not been a priority over things like swaps and other ways to purchase crypto.

Q: Alex, what is the meaning of life?

Alex: I tweeted about this a while ago—if you don’t want to be disappointed, then don’t have very high expectations, right? If you simplify it, it’s someone to love, something to do, and something to look forward to. If you can get those three things, then you should be doing okay.

Q: Can non-profits open a Celsius account?

Alex: Yes, we have a new process on the website for corporate onboarding, and this accepts non-profits.

Q: When taking a loan, if the borrow rate is 7%, but the rewards are higher, do I get to keep the difference?

Alex: No, you don’t, you either get to earn interest on your crypto or borrow against it—you can’t do both. We wouldn’t be running a real business if we were still paying you interest on crypto and also letting you borrow against it—it wouldn’t be profitable.

Q: Why is the APY for MATIC and SNX so high?

Alex: We set the rates based on what we can get for coins—and especially for staking coins, these rates are largely set by the network.

Q: Can US members take out loans?

Alex: Yes, I think we’re still blocked in a few states like California, but ultimately we will be able to offer loans in all 50 states.

Q: Could we raise our LTV on a loan instead of adding more collateral when we get a margin call?

Alex: We’re not currently able to adjust LTV on an open loan. We’re not trying to liquidate you—we don’t hide the buttons during price dips like some of our competitors, and we are ultimately moving to multi-collateral loans. This will allow you to borrow against all assets in your wallet, greatly simplifying the borrow process.

Q: What can users do to ease the burden on the support team?

Alex: Don’t send 5 tickets with the same problem. All that does is clog the system—it slows you down, it slows us down, it slows down other Celsians. We’re still resolving all urgent issues within 24 hours—if it’s been 24 hours and you think it’s urgent, then reach out to us again.

Q: Is there an interest calculator in the app so we can estimate how much we’ll make?

Alex: There’s one on our website, and there’s one in our app as well. Click on “reward rates” and you can see what your interest will be like.

Q: Alex, what’s your opinion on hyperbitcoinization? Why are all of these countries and people buying Bitcoin?

Alex: Everyone has the same problem—they’re trying to escape the fiat world into a non-correlated asset. BTC is an exceptional choice, because it’s easier to manage than assets like gold or real estate.

Q: Is there a plan to allow CEL token to be used to pay back loans?

Zach: That’s already live, you can pay back a loan with CEL and get up to 30% off your interest payments.

Q: What happens to my wallet when I pass away? What will my family need to do to recover those funds?

Alex: We’ve teamed up with heaven to form a wallet—no, just kidding. You should have a will, and in that will you should specify what you want to do with your assets, and we’ll follow any legal action as required.

Q: How can you assure us that user’s funds are safe at Celsius?

Alex: We probably have the strongest security of anyone in the industry. For more detailed insights, check out our previous Security AMA.

Q: How is usastrong.io working with Celsius to help attract female business owners?

Krissy: Right now, 80% of the business owners on usastrong.io are female, and we are very successful on Instagram, which is heavily used by women. We are accepting cryptocurrency payments on the site—so we’re trying to merge worlds a bit there. We know the majority of business on Amazon are male-owned, and that’s one reason why we’re focused on onboarding women to the platform.

Q: When will I as a US accredited investor be able to earn in CEL token?

Alex: It’s coming soon, we have a plan, we have the administrator who is going to handle it in the US, but we have been swamped with growth issues and that has put it on hold a bit, but it is coming and is very important to us. We’ll announce it as soon as it’s ready.

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

• Install the Celsius app https://celsiusnetwork.app.link/137247d31d
• 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

Click here for a step-by-step guide for onboarding with Celsius, and here for my onboarding guide for Coinbase.

Current Celsius Promo Codes

• WEB30: Deposit $200 in any asset, get $30 reward after 30 days (must be first promo code, for new users only).
• TRUST: Deposit $2000 in any asset, get $50 reward after 30 days.
• BANTER20: Deposit $1000 in any asset, get $20 reward after 30 days.
• USDT20: Deposit $2000 in USDT, get $20 reward after 30 days.

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