Celsius Network Weekly AMA– November 6, 2020
With Alex Mashinsky and Zach Wildes, Community Manager
This week’s AMA begins with a song and 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 incredible news that Celsius’ on-chain assets have now topped $2 billion. Additionally, Celsius holds ~$220 million off-chain with a third-party custodian, in addition to the ~$600 million CEL token in Celsius’ treasury. An incredible achievement, and we’re just getting started. This growth in AUM was no doubt fueled by recent integrations with Bitfinex and LINE, and Alex mentioned that Celsius would likely be announcing another exchange integration this coming week. Zach also announced a new promo code (GOLD20) which grants new users a $20 bonus when they deposit $200 in any asset.
In other news, loans in the UK are live again, and over 300 users are already queued up to borrow there. Celsius also announced five $500 bonus prizes to users who were special for various reasons (200,000th user, most loans taken, etc.) and Alex said they plan to do more giveaways like this in the future. Regarding upgrades to major blockchains, Alex discussed how ETH 2.0 staking will be beneficial for Celsius’ ETH yield, and that Celsius would be making an announcement regarding the BCH hard fork within the next week.
Finally, Alex had a few updates regarding CEL token. Starting Monday, users will be able to borrow against CEL token at 33% LTV. Celsius feels comfortable doing this because of increased trading volume and relative price stability for CEL token. Furthermore, the 2.5 million CEL token that was set aside for OTC sales from the employee distribution has completely sold out, and as a reminder, almost all of the remaining team CEL token will be locked for another 3 years. Finally, don’t forget that Celsius is constantly buying CEL token—both for weekly interest payments and to help fill OTC buy orders—so if you ever see a dip in CEL price, know that Celsius almost certainly bought some CEL there.
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.
Celsius Updates
- AUM is over $2 billion. Celsius currently holds $2.02 billion in assets on-chain, with another $220 million off-chain with a third-party custodian. Furthermore, Celsius holds over $600 million worth of CEL token in our treasury. Together with our hot wallet insurance through FireBlocks, and paired with our security team, we think this is the best protection your assets could have. On this note, we’re also planning to reach out to Cred (who recently suffered a breach) to see if we can help in any way.
- Alex in the news. When massive money printing occurs, companies start thinking of ways to protect themselves from inflation—and thus you see Square and MicroStrategy buying Bitcoin, and PayPal getting into crypto as well. Also, don’t forget to take profit during a bull run!
- Celsius is live with Bitfinex. You can earn yield directly from your Bitfinex account. Through an automated process, your assets are transferred to Celsius and earn interest. You can then withdraw them from Celsius at any time to trade them on Bitfinex or transfer the funds elsewhere. Alex also mentioned that Celsius will likely be announcing another exchange partnership next week!
- Alex does Bitcoin TA. Bitcoin historically had a tough time breaking the $10,000 and $12,000 resistance/support levels, and now we’ve broken above $14,000 to the mid $15ks. It doesn’t matter when you’ve joined—we’re still early. But just make sure you HODL!
- More of Celsius in the news. Alex was quoted in an article on CNN Business, Celsius got a great writeup on their success, and Alex also played a clip about the collaboration between Horizen and Celsius on Proof of Community. Alex also did interviews with Patrick McClain of REIMAGINE 2020 and Brock Pierce for an episode of MOIP.
- Number go up! Before the elections, there was a risk-off—but now that the threat seems to have subsided of any post-election chaos, money is flowing back into the markets (especially to Bitcoin and other capital markets). It’s also important to note that during times of volatility, Celsius is able to make more money lending because there is greater demand.
- 33% LTV loans for CEL. Previously, loans against CEL were only possible at 25% LTV. We now feel more comfortable in the stability of CEL token price, and so we will let you borrow more against your CEL token if you’d like.
- 2.5 million OTC CEL is sold out. This was set aside as a tax payment for Celsius’ employees to get their bonus payments. However, if you’re interested in buying OTC, it’s super easy—just email otc@celsius.network. Anytime Celsius sells CEL token OTC, we immediately place a buy order for a lower price, since Celsius is always buying back CEL token weekly anyway. Most notably, any time there is a big dip, Celsius is always buying the dip.
- Another new promo code! For new users only, enter code GOLD20 when depositing $200 of any asset to get a $20 bonus.
- Celsius supports mining. Argo is one of the world’s largest cryptocurrency mining companies. Celsius has been helping to fund their operations, earns Bitcoin from it, and also earns interest. Expect a press release on this next week.
- 5 winners get $500 each! Celsius decided to randomly award $500 to five users for different reasons: a user who has never withdrawn, only deposited (aka ultimate HODLer), Celsius’ 200,000th user, a user who has referred 1,004 (!!) people to Celsius, a user who has the most different assets in their wallet (33), and the user who has taken the most loans (28).
Community Questions
Q: When are we going to get an update on UK loans?
Alex: UK loans are live right now! We have over 300 loans pending already. If you’re in the UK you can borrow against any asset right now.
Q: Are there any plans for Celsius to work with a tax-advantaged vehicle like a self-directed IRA?
Alex: Yeah, there are several third-party vendors who do this stuff. We’ll find a place on the website for this information.
Q: What do you think about Wyoming’s new crypto-friendly senator who was just elected?
Alex: Yeah, anyone who is elected who’s crypto-friendly is great for us, and Wyoming is really becoming the center of the crypto legislative world recently.
Q: All of my friends are asking how to get into crypto—what should I tell them?
Alex: Tell them to download the Celsius app and give them your referral code so you both get $20! Share it with all of your friends.
Q: How, as a community, are you going to celebrate the 100th CELionaire?
Alex: Yeah, so we need to celebrate all of them. When COVID is over we’re going to have a big party and invite all of the Top 200. We’ve had 3 or 4 events before in the past, where community members got to hang out and meet team members. And we always hear from people asking to expand the list—but once the Top 200 are all millionaires, then we’ll expand that list.
Zach: It’ll just become the CELionaire list, not the Top 200 list!
Q: Alex, you mentioned that the 2.5 million CEL tokens sold out and that there were 30 outstanding orders that would still get the bonus—where did the CEL token come from for these orders?
Alex: We are constantly buying CEL token—this has nothing to do with the treasury, and is instead specifically for OTC orders. Also, just a reminder that there are no new CEL tokens being created or released every month. Any tokens that we pay back as interest or sell on OTC are bought by Celsius from the open market.
Q: We received our Celsius equity certificates, are there any further updates?
Alex: Yeah, the best way to get updates is to sign up for our newsletter or to subscribe to our YouTube channel. There’s no special news that we share with our equity holders on BnkToTheFuture that we don’t share elsewhere. The big benefit with users on BnkToTheFuture is that they got to invest in Celsius at such a low pre-money valuation. We’re so excited that we got so many community members to invest in the company instead of the way most companies do it with venture capitalists!
Q: New Yorkers are only restricted to a few assets in the wallet—will we ever get access to all of Celsius’ assets?
Alex: We’ll buy you a ticket to fly to the country of your choice! Only kidding, but we need to do this in order to stay compliant. When the regulators tell us it’s okay to add assets then that’s when we’ll be doing it. However, you are only restricted by where you are using the app from. Even if you open an account in the Netherlands and move to New York, you’ll have the same restrictions as other New Yorkers. But the opposite is true—if you open your account in New York and then move elsewhere, you’ll have access to more assets. I know it doesn’t make any sense, but we need to follow the regulations so that the banks aren’t able to shut us down.
Q: Will we ever be able to hold fiat in the app?
Alex: Fiat is a complex thing, because you have to be a bank to be able to take deposits. We aren’t a bank—we only accept digital currencies, and we don’t offer checking accounts. If we wanted to, we could head to Wyoming and apply to be a bank, but that also comes with ~60,000 pages of regulations.
I think as you watch the US OCC open up the doors and allow banks to do more and more with crypto, that also works in the reverse—meaning that Celsius will be able to collaborate with these banks and do more and more. However, once the regulations open up enough, at some point the benefits of Celsius becoming a bank will outweigh the regulatory negatives, and this is what we’re waiting for.
Q: Why do PAX Gold and Tether Gold have different pricing? Aren’t they both pegged to the price of gold?
Alex: They are, but just like Bitcoin has slightly different pricing across different exchanges, PAXG and XAUT will trade at slightly different prices. The main difference between the two is that PAXG is based in London and cannot be redeemed for actual gold, while XAUT is based in Zurich and you can redeem your tokens for physical gold should you choose to do so.
Q: Are you Israeli? Do you speak Hebrew?
Alex: *Says something in Hebrew*.
Q: Could you tell us what OTC is in layman’s terms?
Alex: In Hebrew or in English? Russian? Arabic? So OTC is over-the-counter. Most liquid assets trade on exchanges. However, if you want to place an order that is large relative to the liquidity on the exchange, you will end up paying a much higher price for your order due to slippage. But when you reach out to the OTC desk, they will give you a quote at one price for a large order, and you know exactly what you will pay. If you have a large order of CEL token you’d like to buy or sell and don’t want to deal with slippage, please email us at otc@celsius.network.
Q: Will Celsius support the Bitcoin Cash (BCH) hard fork?
Alex: We’re still looking into it, but we’ll have an answer by the next AMA.
Q: Will Celsius be adding support in Spanish?
Alex: We have community telegram channels in many different languages, so I would start there. However, if that doesn’t work, feel free to email us in your native language and we should be able to find one of our employees to help—we’ve got employees in almost 20 countries! Someone recently sent us a long email in Polish, and the wife of one of our new employees is Polish so she helped us translate that.
Q: ETH 2.0 has launched—will Celsius be paying higher than the staking fee?
Alex: Staking ETH is going to be great for Celsius because it’s going to provide us with a floor for ETH returns. However, we will also be able to blend that with lending to exchanges and institutions, so our average should be much higher than staking. (Editor’s Note: ETH 2.0 Phase 0 staking is a one-way bridge that burns your ETH, meaning that it’s not viable for Celsius to stake there just yet.)
Q: You tweeted about the market not having enough CEL tokens—is that going to be an issue for buybacks?
Alex: What I was saying is that there just aren’t enough sellers, and this is driving up price. When the price of CEL token goes up, we don’t stop buying CEL token, we just have to buy less of it because each CEL token is worth more.
Q: If CEL price goes up too quickly, does that cause a problem for Celsius?
Alex: It doesn’t cause a problem. We are also sometimes a seller in the market. If we feel that the price is going up too quickly, we always need dollars for loans, and so we (Celsius) will be selling CEL token into the market. Again, if you think this isn’t good for our community of HODLers—it is! The more dollars Celsius has, the safer Celsius is in case of a bad event. Today, we have around $40-50 million of dollars on our balance sheet.
And unlike many of our competitors who are subsidizing their rates, we are profitable and didn’t need to spend any of the $20 million we received from our equity raise earlier this year. We are making money even after you use your promo codes, after we pay out weekly interest, and after we pay out those $500 bonuses to contest winners. All of these things are showing you how healthy our company is, and we’ll be filing our disclosures from this past fiscal year with Companies House here in the UK very soon.
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
