Celsius Network Weekly AMA– October 16, 2020
With Alex Mashinsky and Zach Wildes, Community Manager
Summary: Alex starts today’s AMA with another song—check it out here if you haven’t heard it before (bye bye to bank!). Celsius has been seeing a flood of new users and deposits thanks to new partnerships with LINE and Bitfinex, and just saw their largest day of net deposits so far. As teased in an earlier email, Celsius dropped some exciting news about loans. Starting Monday, minimum loans will be down to $500, and there’s a new promo code (TREAT)—take a loan and get up to $100. Alex is also looking for suggestions for guests to interview on his show MOIP, and also showed off some of the great new swag available on Celsius’ web store.
Four new coins are coming to Celsius next week, including UNI, UMA, MANA, and SGR. Additionally, this past week, Celsius made changes to the loyalty rewards program. These changes were designed to take a bit from the platinum members and give it back to the bronze members. Also, with the huge rise in the price of CEL token recently, these changes help make the loyalty program more sustainable for the future. Alex also discussed CelSwap a bit more. This is apparently a community-built project that Celsius plans to audit on completion. Celsius may then provide liquidity to it, and it will be a great option for swapping between CEL and other tokens. Lastly, although he didn’t confirm it outright, Alex did discuss that Celsius was waiting on Bitfinex to tell them when (not if) a CEL listing was happening.
Finally, Alex showed off two new sections that were added to the website— Why Trust Celsius and Security Insight. These sections are designed to give users more insight into Celsius’ licenses and regulations, as well as milestones that helped them get to where they are today. The security page shares information about the practices that help keep Celsius’ funds safe, and also has a link to the special AMA with members of Celsius’ security team that was held a few months ago. Ultimately, the goal of these two pages is to help put users at ease and to further Celsius’ goal of being as transparent as possible.
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.
- An update to the Celsius Rewards Program. We’ve taken from the rich and are giving to the poor! Rates have been updated to provide a bonus for bronze tier, as well as a higher threshold and slightly reduced rewards for platinum tier. See the new tiers here (or check your email).
- Trust and security are important to Celsius. Celsius has added two new sections to their website — Why Trust Celsius and Security Insight. The former provides information about Celsius’ licensing, milestones, and mission, while the latter contains key aspects of Celsius’ security protocols as well as a link to a special Security AMA Celsius did earlier this year. In terms of licenses, we will definitely have a few more lines of licenses by next year.
- Lots of good Celsius news recently. Even though some news outlets don’t want to report on Celsius, we’re going to highlight some who are. Starting with one of our partners Tether, you can go to their website and check on their current balances. We’ve had a flood of new users and new deposits thanks to our partnerships with LINE (BITFRONT and BITMAX) and Bitfinex, and we just had our highest net Bitcoin deposits in single day. And on Bitfinex, we already have several assets available to earn interest and will keep adding more over the next few weeks. You can also check out one of Alex’s favorite YouTube reviews of Celsius here.
- Four new coins coming next week! UNI, UMA, MANA, and SGR will all be added to the Celsius wallet next week. UNI had been previously announced, and SGR is a replacement of the previous SGA token. UMA is a governance token for the UMA protocol—a protocol for building synthetic assets, while MANA is the token for Decentraland, a virtual reality platform.
- Get up to $100 back on a loan with Celsius. Celsius is offering a new promo for anyone who takes a loan—use the code TREAT on any size loan, and you’ll get up to $100 back. The promo code will be going live on Monday. Even better, Celsius has lowered the minimum loan size down to $500! For more information and details on the loan promo, read here.
- Coins are leaving exchanges. If you look at the data over the past year, it’s clear that crypto is leaving all of the major exchanges and flowing to places like Celsius and other DeFi platforms. This year, but especially in the past few months, Celsius’ deposits have skyrocketed—and they’re not showing any sign of slowing down.
- Traditional finance is buying Bitcoin. In addition to the recent purchases by firms such as MicroStrategy and Square, Fidelity has recently issued a statement advising investors to diversify 5% of their portfolio with Bitcoin. Bullish.
- Submit suggestions for Alex’s MOIP! Alex is looking for suggestions for people to interview on MOIP—so send in your best candidates/ideas!
- Chatting with The Bank. Alex brought on his wife, Krissy (AKA, “The Bank”) to talk about her insights into Celsius. She shared that Alex has been thinking of ways to transmit money easier for years—including a method in 2003 of attaching money to emails. Krissy spoke about regulations in the US in different states making access to crypto more difficult, which can hamper financial independence (especially in the case of women). Blockchain offers an easy way for women (and others!) to become financially independent, and to not need to rely on others or the banks. We can create systems that act in our best interest, despite lobbyists from the banks—we just need to work at it.
- Loan minimums down to just $500 now. This will go live on Monday—meaning you now can borrow against as little as $1000. Even if the $500 is all you can afford—if you have credit card debt, that’s $500 less you owe the banks. Celsius is constantly looking for ways to lower the barrier for entry to using its services, and will continue to do so moving forward. We’re lowering the rates we charge you, and increasing the rates we pay you—and the more we do that, the easier it will be to convince new users to join us.
Alex: Before I answer—everyone is pre-approved for a loan! never forget that. There are some geographic restrictions. Next week we’re opening all of the UK back up for loans. The best way to check is to open the app and click the loan button. In some jurisdictions, users will be able to instantly take loans, and in others we may need to manually process your loan.
Alex: If you think about the iceberg that took down the Titanic—the giant part of the iceberg below the surface is systemic or counterparty risk (the risk that one party defaults on their obligation). For instance, in the repo markets, the Federal Reserve had to step in because banks were not lending to each other as needed due to counterparty risk. Celsius is in the business of managing counterparty risk. This is why Celsius requires collateral from both retail and institutional borrowers, and the smaller an institution is, the more collateral Celsius will require from them on that loan.
Q: How does Celsius keep up with weekly reward payments when companies like BlockFi do monthly payments?
Alex: The CEO of BlockFi openly admits that they are not earning the yield they are paying and that they are subsidizing with investor money. At Celsius, all of our rewards come from earnings we are generating for our customers. Again, Crypto.com just recently cut their rewards tremendously because they realized they can’t keep burning investor cash at the same rate anymore—and this was always their plan from the beginning. There is no one else who is paying 80% of revenue back to their community—and we are still in very early days! If you don’t care about your users, you don’t survive working at Celsius—we all care for our community very deeply.
(Zach also mentions here that Celsius has added a bunch of new swag to Celsius’ store—shop.celsius.network. Several new items, including many designs submitted by community members! And as with everything else, Celsius pays 80% of revenue from the store back to depositors.)
Alex: Yes, there are many ways you can buy it now—we have a list of them on our website (Uniswap!), and you can always buy large volumes OTC (email@example.com). Don't forget, US users can also deposit CEL token into the app and earn 5.12% APY.
And this is not a show trying to convince you to buy CEL token. Also, you should never invest any money that you can’t afford to lose, and if you make tons of money with CEL token (or any other asset) it’s always worth considering rebalancing your assets.
Alex: Yeah, so I want to put it in the context of Crypto.com. In their case, they are bleeding coins out to the market from their personal supply—and they hold 80% of the tokens. So as the market cap goes up, CRO price doesn’t rise proportionally to it because Crypto.com is using their supply to pay customers. CEL token price on the other hand has risen almost 1:1 with CEL marketcap because Celsius buys all CEL token from the market to distribute for interest payments. Also, we post all of our wallet addresses here—so if we do start using CEL from our wallets, you’ll be able to see it immediately.
Zach: The calculation for interest is done from Friday to Friday, so you see Friday’s date in your wallet because that payment was calculated on Friday—even though you receive it on Monday.
Alex: We follow the regulations in each country—for example, in the US, you need to produce a death certificate and a will or something similar. We are planning to add a hidden phrase that will help expedite this process—and if someone doesn’t have this phrase, then we will look into their claim much more thoroughly before paying out to them. With digital assets it’s more difficult than it is with traditional finance accounts. You’re also able to create Celsius accounts for your kids or grandkids using your own KYC—and then when they’re 18, that becomes their account.
Alex: Let’s see how they do. Obviously it will be given to you so you will be able to hold it in the wallet, but we need to find demand for it before we can promise interest on it.
Alex: To be more inclusive, we wanted to take a bit from the platinum members and give it to the bronze members. Also, with the huge rise in the price of CEL token recently, these changes help make the loyalty program more sustainable for the future. But what we want is for everyone to be platinum—and it’s important to note that it doesn’t matter how much money you have, only the percentage of your portfolio that is in CEL token.
Alex: We don’t set the rules—but we’re waiting for certain legal things to happen first. We have announced a program partnering with BnkToTheFuture that will allow US accredited investors to earn in CEL, but our goal is to bring that to everyone. And again, don’t forget that US users can still earn CEL interest on their CEL token—just not on any other coins.
Alex: So we’re working on that. Bitfinex has to enable us to do it, and the minute we know about it we will let you know. We’re waiting for them to tell us when that is happening.
Alex: We all love cards, but we don’t want to create an environment in which you are spending your crypto—I’ve yet to meet one person who was happy that they’d spent their Bitcoin on anything in the past. We want to enable a system where you could use a card to take a loan against your assets, but unfortunately the major issuers don’t want to work with crypto companies.
Alex: So this isn’t our project—we know it’s happening, and it’s gonna launch whenever the team finishes it. We’re planning to conduct an audit on it, and then once that is done we’ll decide whether we want to add some liquidity to it or not. It is exciting though because you will be able to earn trading fees on CEL pairs with other tokens.
Alex: When you hold six, if you’re in the US your first five BTC will earn 6.2% APY and your remaining BTC will earn whatever the published rate is. If you’re overseas, then your rates work the same as with other coins based on your loyalty level.
Alex: Yeah, there’s no reason not to! They’re legal, they’ll be in circulation—we always say that we don’t choose winners and losers. If we can generate yield on them, then we will add them to the wallet. Our job is to generate you the most yield we can in a responsible way. We currently support 35 assets, soon it’ll be 40—and in the next few years it could be 2,000.
Q: You’ve partnered with BITFRONT and Bitfinex, who have millions of users. Will we see those assets on the community page?
Alex: If you look on our community-driven website Celsians, you’ll be able to see a lot of these statistics, including new user signups. They also show how many CEL tokens we’ve bought back off the market—over 40 million CEL now!
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