Celsius Network Weekly AMA– January 8, 2021

With Alex Mashinsky and Zach Wildes, Community Manager

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

Summary: Krissy (Alex’s wife) starts off the AMA with the exciting news that Celsius has now topped $6 billion in Assets Under Management (AUM), has received $620 million in net deposits in the past month, and $168 million in net deposits in the past week. After taking over, Alex announced a 10% discount for OTC orders greater than $100k—email otc@celsius.network to get your discounted CEL! Additionally, while some users noticed a large seller of CEL token over the past few days, if you take a closer look you can see this is Alex’s wallet, and he’s merely converting a chunk of CEL token to ETH so that he can provide liquidity to the CEL/ETH pair on Uniswap. This is ultimately a good thing for CEL holders and users, as it will increase market depth and liquidity of CEL token.

Speaking of CEL token, Alex showed off the new Top 500 list of CEL holders, as the previous Top 200 was already 100% millionaires. FTX, one of the world’s top exchanges, recently listed CEL token (and it already has over $2 million in daily volume). However, Alex confirmed that this was not the previously mentioned “mega deal” (partnership), and that in fact there would be a second mega deal with a US company this year as well. Excess loan collateral releases for CEL token only have currently been paused—with the sudden explosion in new users, paired with rising crypto prices, support staff has been overwhelmed with emails, and this temporary step will help the support staff catch up. As a reminder, Celsius is also hiring more support staff, just rolled out a chat bot with automated answers to FAQs, and also is hiring staff for a call center. Alex apologized for issues with support and said that they will get better.

Finally, the demo of the web app has been pushed to the AMA two weeks from today, as next week Celsius will bring on a tax professional to discuss special considerations for crypto taxes. If you’re looking for some new Celsius swag, the web store has over 50 new items—go check it out! Alex also mentioned that with their new office in Austin, Texas, Celsius was actively pursuing solutions to allow Texans to earn interest on stablecoins. Unfortunately, when discussing XRP’s status, he said that it did not look good and Celsius may need to remove it from the app. Lastly, Alex and Zach did mention that Celsius was hoping to get Alex an interview on the Joe Rogan show to discuss crypto and were also looking for more success stories from Celsians on reddit—so do your part, tag Joe Rogan on Twitter and let him know why Celsius is great, and post on Celsius’ subreddit about how Celsius has helped you move closer to financial freedom.

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 (and Krissy)

1. Financial updates from Venus! Krissy is here to bring one more women to crypto. Celsius now has over $6 billion in assets, $620 million in net deposits over the last month, 21,586 new users in the last week—and while the US Federal Reserve was printing dollars, Krissy and usastrong.io were printing Celsius shirts! For context—just two months ago in the week of November 6th, net weekly deposits were $35.7 million, and this past week they were $168 million—a 4.68x growth in net deposits.
2. Special Deal for OTC Desk. If you buy over $100,000 or more in CEL token, you can receive up to a 10% discount—just email otc@celsius.network.
3. Eight reasons why BTC is better than gold. Scarcity: there is much more gold left to be mined than BTC. Transferability: BTC is very easy to send, physical gold is a real pain. Storability: physical gold costs money to store, BTC is essentially free. Decentralization: No one can confiscate your BTC, in the past governments have confiscated gold. Durability: Like almost all natural materials, gold can break down over time. Fungibility: Very hard to pay people in gold, possible to do this for BTC. Verifiability: BTC can always be verified to be real, gold can be counterfeited or stolen and is less traceable. Divisibility: You can easily divide BTC into Satoshis, but shaving off pieces of gold is not easy.
4. BTC keeps climbing. People keep buying in, and BTC keeps hitting new all-time highs. Be careful when users are margin-buying like this—”be greedy when others are fearful, and be fearful when others are greedy.” Greed is at an all-time high right now, and we are definitely due for a correction for the market to cool off. And I’ll even do my price prediction for this year on next week’s AMA!
5. Alex is LPing CEL, not selling it. There were some questions earlier this week about some transactions from my wallet—people were worried about me selling some CEL. If you check the blockchain, you can see that I‘ve been selling half of the CEL I transferred to my wallet for ETH so I can then provide liquidity to Uniswap. Uniswap is now the most popular market for CEL, and Celsius can’t provide liquidity there, so I am doing this to try to help out the community more. Overall, I’m trying to add around $6 million in liquidity.
6. Celsius in the media. The Wall Street Journal just published an article today about Bitcoin’s price increase and asked us for a quote about it. An article from CNN Business (also about Bitcoin’s price spike!) also featured a quote from me. I also posted a few new articles on my Medium. Usastrong.io was featured in an article talking about blockchain and “Made in America.” My cofounder Daniel posted a really funny video where he addressed previous comments by Warren Buffet about Bitcoin being “rat poison squared.” Additionally, I also had a great interview with Charles Hoskinson (founder of Cardano) moderated by the Crypto Crow.
7. Issues with support. A lot of users have had slow responses from support—we see your messages, and are currently building internally to try and optimize our support process. We’re hiring lots of new staff, just launched a bot to answer more simple questions, and are also launching a call center.
8. The new Top 500. The Top 200 has now become the Top 500 on our website—the Top 500 CEL token holders. We made all of the Top 200 millionaires, and now our goal is to make the Top 500 millionaires as well.
9. Update to the Celsius shop! A completely revamped store (with over 50 new items), and it ships internationally! Go get yourself a Celsius t-shirt for you or the HODLer in your life.
10. Joe Rogan and Celsius. We’re trying to get on the Joe Rogan show—our community did a great job of getting Real Vision’s attention and getting us on that show, and we’d love to do the same with Joe Rogan. Word on the street is that he’s looking to talk and learn more about crypto, and we think we’d be a great fit for his audience. So make sure to let him know you want to see Alex on Joe Rogan’s show!
11. Top referrers. Some of our top referrers are doing great work—including Digital Asset News, and we’re giving each of them $200 on top of all of their referrals for bringing in so many new users to the Celsius community.

Community Questions

Q: Why don’t you have to pay taxes on loans from Celsius?

Alex: Normally, when you sell something, the IRS immediately jumps in and ask for you to hand over up to half of it in taxes. If you look at the richest people in the world, when they need cash they don’t sell assets—they borrow against them. Celsius brings this power to normal people, for loans as small as $500 and rates as low as 0.7%.

Q: Is there any chance of a silver token so I can earn interest on my silver?

Alex: We depend on issuers, and there aren’t that many issuers for tokenized silver. There are several gold coins, but not much silver—and we need to find a way to earn yield on it. When that happens, we will add it to the wallet.

Q: Alex, are you saying we should keep money on exchanges to buy the Bitcoin dip?

Alex: You should always have some spare liquidity in the event of a dip, and especially be careful if you’re in a leveraged position.

Q: How do you calculate the interest rates on crypto when the price is moving up and down so quickly?

Alex: Our rates don’t depend on the price, they depend on the volatility. Institutions borrow coins from us to market-make, so they make more money when price is moving more, which also means that we can charge them more.

Q: How is interest calculated? Is it 5% of the dollar value, or 5% of the tokens you hold?

Alex: For interest in-kind—like Bitcoin-on-Bitcoin—it’s just calculated in the base asset. If the interest is 6.2% and you have 100 BTC, at the end of the year you’ll have 106.2 BTC. For in-CEL interest we take a price snapshot at Friday, 5 AM UTC and use that to calculate interest each week.

Q: What is Celsius’ position on XRP? Will you continue to support the asset?

Alex: It’s a tough situation—basically in this case the “cops” (SEC) are saying they’re bad, but we haven’t heard anything from the judge and the jury. We’re still investigating, but based on the action of other exchanges and what we are hearing from our lawyers it’s not looking good.

Q: On January 1st CEL had a surprise listing from FTX—could you talk a little more about that?

Alex: FTX is a great exchange, Sam (FTX’s CEO) is doing a great job over there. Their daily volume on CEL is already over $2 million. So now, if you’re outside the US you have three good options to buy CEL: Liquid, FTX, or Uniswap. FTX is also great because they don’t currently charge any withdrawal fees.

Q: Have loan collateral releases been paused?

Alex: Yes, for CEL token only we have currently paused this. We had increased allowing this to two times per month, but our support staff is just currently overwhelmed with 27,000 people signing up for Celsius in the last week. I apologize for this, but our support staff is currently drowning, and we want to free them up to deal with new customers.

Q: With more AUM and users, why was there a dip in CEL price?

Alex: There has been a ton of volatility lately—we’re making record income, and will keep buying CEL token. Just because we’ve gone up like crazy over the past two months doesn’t mean we always will—it’s good to take a pause and recoil the spring every once in a while.

Q: Can we get an update on the upcoming assets?

Alex: Yeah, tokens are easier to add—AAVE should be coming next week—but DOT’s a bit more complicated.

Q: Does Celsius have any new partnerships?

Alex: Our partnerships grew 4,000% in the last year, and we have a very strong pipeline coming up for 2021. That “mega deal” I mentioned previously is one of our partnerships this year. We also have a second mega deal this year—it’s in the United States with a huge partner, and when it’s ready I will tell you about it.

Also, as a reminder, we have over 300 institutions that are onboarded with us, and in the three years since we launched we have never had one instance of an institution not repaying a loan, not covering a margin call, or not paying all of their interest.

Q: Do you have any updates about the web app?

Alex: So we’re actually going to do the web app demo in two weeks—next week we have a separate surprise for you. But in two weeks the team will come on the AMA and demo the app for everyone.

Zach: Yep, next week we’re going to have a tax professional who just came and spoke with everyone at the company come on the AMA and answer questions on crypto taxes.

Alex: Yep, and we’ve integrated into the app your 1099 that you receive in the US—so this will greatly simplify taxes for you. Make sure to use that so you don’t pay the wrong amount for your taxes, and definitely don’t use the “Total Earnings” on the home page, since this includes the current price of any interest earned!

Q: Going forward, how can we estimate the value of our shares purchased in the BnkToTheFuture sale?

Alex: Anyone who purchased shares then did very well. Anyone who holds equity, watch what happens when Coinbase goes public. Coinbase holds about $25 billion from institutions and $6–8 billion in retail AUM. They make good money on the retail AUM, but almost no money on the institutional holdings—but when they go public you’ll see the whole number at $30 billion or so in AUM. So if Celsius is at $6 billion in AUM, and we’re making more money than they are—and Coinbase is valued at $30 billion, then where do you think Celsius will be valued?

Q: What do you think about the OCC news that allows banks to run nodes and operate stablecoins?

Alex: Think about it this way—let’s say dollars are dollars and you can move them on different highways, different toll roads. So if you want to do a wire, you have to go on one road, you want to do ACH, you go on another road. All the OCC did is add a third road called Ethereum. Currently, transacting on Ethereum is actually more expensive because of gas fees, but the OCC made it a viable option once scaling arrives later this year.

Q: Could Celsius send me a monthly account balance?

Alex: You already have it—just open up your app, and you can see your balance 24/7. If you want us to send you a paper statement, that’s like last century stuff—sorry, but I don’t want to waste time stuffing envelopes and I don’t want to kill trees. The desktop app will allow you to generate PDF statements, but we will never send you paper statements. We don’t do paper, only crypto.

Q: BlockFi has a money transmitter license and offers interest on stablecoins in Texas, is that something Celsius is working toward as well?

Alex: We opened an office in Austin, Texas, so we definitely will have a solution for it—I’m just not sure that it’s going to be exactly what BlockFi is doing.

Zach’s Call to Action.

Zach: I have a call to action for all of the Celsius Ambassadors and users out there, go to reddit and share your experience with Celsius and how it has improved your life. A large portion of new users come to Celsius because of other users sharing their positive experiences, so we already know this is a really powerful thing to do. We haven’t had enough activity on reddit, and we know this would be a huge help.

Q: Does Celsius covering network fees create the wrong incentive for a HODLer community?

Alex: Yeah, it does—I think we’ve paid close to half a million dollars in withdrawal fees. When we started Celsius, we wanted to make it easy to onboard, but we also didn’t want for it to cost anything for users to leave us because we were so confident that they would stay.

Q: Alex, my family is interested in crypto—where should I have them start?

Alex: I would have them start with a few videos, I think that buying coins is probably not the best place to start. I was having this discussion with my daughter last night that 99.9% of people in the world still think that crypto is a scam or fake money or something that only geeks do. So we need to do bridge that by making small deposits for our family and our friends, and they can see how it appreciates and earns interest over time. To convince someone that this stuff is in their best interest, you need to educate them first instead of just making them buy some coins.

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

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

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