Celsius Network Weekly AMA– September 11, 2020

With Alex Mashinsky and Zach Wildes, Community Manager

Even the AMA title card got the new color treatment!

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

Summary: Alex starts with some updates, beginning with the fact that it’s been a very busy week for Celsius. Both the website and the app received a fresh coat of paint and a new look, a large holder of CEL token from the ICO days finished selling his stash, and as a result CEL’s price jumped to an all-time high– up 50% vs ETH in a week! Also, this week Celsius saw record deposits, users, income, and a record-high amount of CEL token and other crypto paid out as interest. As a result of all of this growth, Celsius is looking to hire 39 positions– so email hr@celsius.network if you think you can bring something novel to the Celsius team.

In other news, we found out that the in-app maintenance was still on for Saturday, and that PAX Gold would finally be added to the app on Wednesday, September 16th. Regarding the Spark token distribution, Celsius has been in direct contact with Flare Network and will reach an agreement that will allow all Celsius XRP holders to receive their Spark token airdrop. Alex also spoke more about Proof of Community (PoC)– Celsius is collaborating with an existing blockchain to bring this to fruition, and also has an in-house demo of PoC scheduled for the team this week.

Finally, Alex dropped the news that Celsius would soon be bringing coin swaps to the Celsius app. These swaps will have very tight spreads, and no gas fees or swap fees– and I honestly can’t wait to see how they pull this off (whenever it does eventually go live). Alex also mentioned that he was very happy to see so much of CEL token’s current trading volume on Uniswap, and that Celsius is looking to do many things with Uniswap to increase liquidity there– making it even easier for CEL holders to buy and sell.

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

1. An amazing week! Celsius released a new website, the ICO seller (originally held ~7 million CEL) finished selling, and CEL price skyrocketed shortly after– up 50% vs ETH this week. And even though blue may be Alex’s favorite color, he still thinks orange on the new website is a great look too.
2. September 11th is a special day. Alex lost his best friend on September 11th, 2000. That day, the subways stopped, and because of the lack of cell phone service, no one could reach their loved ones. In honor of his friend, Alex decided to push for building a cellular network in New York City’s subways. It took five years to get it approved, but now 8 million New Yorkers get to use it every day.
   September 11, 2017 was also a special day– Celsius was featured in ICO Crowd, a big ICO Magazine at the time. Even though some of the details changed, the business model and the community-first ethos have stayed the same since the beginning.
3. Migrating from comfort to growth. Even though you may feel safe in dollars, dollar assets are rapidly losing value due to inflation. As you move on to learning and growth, you can transition from the dollar to other non-correlated assets such as gold (or tokenized gold like PAX Gold) and Bitcoin. It’s not an easy transition to make– from fiat currencies to other assets– but it’s important when looking to our uncertain future.
4. The Celsius Flywheel just works. While others may try to imitate, no one can do it like Celsius. Celsius holds ~$1.2 billion in deposits and continues to grow. With more users, Celsius earns more money, buys back more CEL token for interest, and users take more loans, which generates more revenue for Celsius and larger interest payments. Celsius continues to raise rates and keep them high, with ETH’s rate climbing to 6.54% this week!
5. Crossing the chasm. From a presentation in 2017, Alex and Celsius predicted that stablecoins would be one of the things that helped bridge the gap between BTC and ETH and the institutional adoption of cryptocurrencies (now ~$20 billion in stablecoins exist). Celsius has always been at the cutting edge and is constantly innovating to find ways to earn more for their community while being as transparent as possible.
6. The public blockchain will change the world. Successful projects require strong decentralized apps, token economics, and must be secure and immutable. When you do all of this and give away 80% to the community, it’s very hard for others to copy your business model.
7. Less volatility and more utility. Celsius aims to bring lower volatility and more utility to their users. This means that Celsius is consistently bringing new features to the app while you consistently earn interest on your deposits without paying any fees.
8. Replace middlemen with middleware. Everyone in crypto– every exchange and app is just acting as a toll collector. Instead of being another toll collector, Celsius is acting to connect you to institutions and DeFi so you can earn more yield. Celsius is creating value for users instead of charging them to use their service.
9. Bring friends into crypto. Our job at Celsius is to help empower and educate you so that you can empower and educate others about how financial freedom can be achieved– through the power of cryptocurrencies and the blockchain.
10. Team Celsius. From the beginning, Celsius has focused on doing good before doing well. And our team worries about keeping your crypto safe and earning you the highest yield, 24/7, so you don’t have to.
11. Record…everything. This week– record deposits, record users, record income, a record-high amount of CEL tokens and other crypto to pay out interest this week. The more Celsius pays out, the more that means we’re earning– so we love it too!
12. Looking to hire. Celsius has 39 open positions. If you think you are an exceptional individual who believes in the mission of Celsius, email us at hr@celsius.network and tell us why we need to hire you!
13. Most CEL trades are happening on Uniswap. Alex is a big supporter of Uniswap– all of the fees go right back to the community. Celsius is looking to do many things with Uniswap to increase liquidity there– making it even easier for CEL holders to buy and sell– instead of supporting centralized solutions.
14. The lowest rates in the crypto world. Celsius offers 1% loans (0.7% if you’re platinum and pay in CEL) with absolutely no fees! And if you refer a friend who takes a loan, you both get $100. The only losers here are the banks and our competitors who charge high rates for borrowing.
15. Spark distribution will be happening. Celsius has been speaking directly with Flare Network, who is issuing the Spark token to XRP holders. The two will come to an agreement that will allow all XRP depositors in Celsius to claim their Spark tokens– details to be released in the future.
16. In-app swap is coming! In the next few months, Celsius will be integrating an in-app swap with very tight spreads– and these swaps will be even better than going to Uniswap. Celsius is going to be able to do this in a way without any gas fees or swap fees. (Editor’s note: While Alex mentioned “30–45 days” in the video, I’ve heard that this is a very optimistic estimate– but swaps definitely will be coming #soon).
17. Skate to where the puck is going. Celsius is constantly innovating to stay ahead of the competition. Celsius was the first to offer interest on cryptocurrency deposits, and was also the first to pay you in a different token for depositing another token (think DeFi yield farming). And what you will see coming from Celsius before the end of the year will surprise you in ways you can’t imagine.
18. CEL token is rocketing. The price of CEL has been increasing steadily and rapidly over the past week, with good, real volume– because of the exchanges Celsius is offered on, there is minimal wash trading.

Community Questions

Q: Can New Yorkers take loans against their coins?

Alex: Yes, New York State can both deposit to earn interest and take loans against their deposits– and has been able to for about five months now.

Q: What keeps Alex and the other founders of Celsius grounded or from dumping their tokens on users?

Alex: The easiest thing would’ve been for us to do the ICO in 2017, pay a listing fee to be listed on Binance, and then immediately dump our coins during the ICO craze. In this industry, you’re tested everyday– we went through a long crypto winter from the middle of 2018 through much of 2019. It would’ve been very easy then to give up and just say that things were too hard, especially while giving back 80% to our community. So we’ve been tested both for greed and for grit. And our community has been tested too, to trust us both during bad times (low loan demand) and during good times like now where we have our highest rates ever.

Q: Could you share an update on Proof of Community?

Alex: I know the team is working very hard on this, and I don’t wanna spill the beans. We are working with another blockchain on this– we’re not creating our own blockchain. We’re partnering with this blockchain to bring transparency and proof from an independent source that Celsius is telling the truth about our holdings and our earnings. The beauty of the blockchain is that it’s a truth-teller 24/7, 365 days a year. And Celsius is actually having an internal demo of Proof of Community next week!

Q: What would you like to see Celsius become in five years?

Alex: Our goal is to bring 100 million people to financial independence– that’s our dream. But as soon as we reach 100 million– our next goal is going to be 1 billion people!

We set high standards, and we’re convincing the giants in the industry to follow us. Coinbase and Binance have to pay you interest on your holdings because they don’t want to lose depositors to Celsius. And even our competitors– they don’t want to pay you rates this high– we’re dragging their rates up.

Q: What will Bitcoin’s value be if the dollar heads to zero?

Alex: The dollar is unfortunately heading to zero. The US Federal Reserve is doing what it has to do to help support the economy. But inflation is already happening– you’re seeing Amazon and Apple go up in value, not because of value increasing at these companies, but because of investors buying up these stocks to try and protect their dollars from inflation. Everything you are earning is worth much less than you think it is because of inflation.

Q: Are you working to allow users to earn and borrow from a cold storage wallet such as a Ledger?

Alex: I really like the Ledger guys– but they take security extremely seriously for obvious reasons so they update only about once a year– and this makes it very difficult to integrate or launch anything with them. Currently, we are not supporting direct integration, but in the future we will automate some of these transfers to make it easier to move between your Ledger and Celsius in one click.

Q: How can we be assured that Celsius will always give back 80% to the community even if Alex is gone?

Alex: If you look at the team– all of them are committed to the cause. Everyone understands why we are doing this and what makes the Celsius Flywheel go. Even if I woke up one day and said we should start keeping more money, I know my team wouldn’t go with it! And again, we wouldn’t be building Proof of Community if we were trying to take more money or hide from our users what we were making.

Q: Why does my total rewards paid fluctuate throughout the week?

Alex: This is because this number displays the current value of all interest we have paid you. So if we pay you in CEL or BTC and the value of either of these goes up, then your total rewards paid will go up as well.

Q: Why are you selling shares of Celsius? If it’s so wonderful, why not keep it all for yourself?

Alex: There are several reasons for this. Almost every company out there needs investors– whether financial investors or strategic investors. The faster a company grows, the more it needs capital to keep growing– and the more investors they will attract. Successful companies typically recruit great financial investors who are betting that the company will do well.

We knew we had an amazing concept– and the easiest thing would’ve been to recruit some of the same venture capital investors who had given me money at my past companies. Celsius decided to do something different, though. We brought in 1,500 investors during the ICO, and now we brought in 1,030 investors through BnkToTheFuture along with our strategic investor Tether. We are always working in the best interest of our community, and we wanted to extend that to how we recruit our investors– by only bringing in community members and strategic investors who would not try to alter Celsius’ mission and goals. By doing so, we continue to keep our company interests aligned with the best interests of our community.

Q: Will US residents be able to earn in CEL token if they become an accredited investor?

Alex: We are working on this with BnkToTheFuture, and we will be announcing a program with them that will allow accredited US investors to earn in CEL if they’d like– we’re just waiting for clearance from our legal team.

Q: Are coins in the Celsius wallet protected from seizure by the government?

Alex: We are a fully compliant company– if a judge orders us to do something– and it doesn’t matter what country this is in– we will comply with the order. We’re not here to hide your assets from governments. Our job is to help you save your money, act in your best interest, and earn the highest yield possible on your coins.

Q: How long is the referral bonus active? I’ve referred several people but they still haven’t deposited yet.

Alex: I don’t think it expires. And to explain why we set the requirement at $200 for 30 days– we want for new users to have to trust us for 30 days, so we have a month to help convince users that we are acting in their best interest. Hopefully, when they receive four interest payments, on time and for the amount we promised, that will help convince them to stay with Celsius.

Q: I keep hearing that DeFi can implode during a liquidity event. Is Celsius in a much better situation?

Alex: Celsius’ business model is not connected in any way to decentralized finance (DeFi). We use various established DeFi protocols to generate yield– but only protocols that have been around for a while and that we have verified are secure. Celsius provides liquidity to several different pools in DeFi, but does not buy new tokens to farm such as SUSHI or SHRIMP.

In many of these new protocols that create no inherent value– it’s a zero-sum game. The only people who make money are the ones who get in early or who only farm the tokens and then dump on the people who get in later. It’s just another version of a Ponzi scheme, where the late guys pay the early guys.

Q: Can I convert my dust in the wallet to CEL token or some other coin?

Alex: The transaction fees are so high right now it’s not worth doing anything– but for now, I would just leave that alone and focus on earning interest on your core assets. (Editor’s note: I think this person was asking about converting dust the same way Binance or Crypto.com allow you to convert dust to their native tokens. Hopefully when in-app swap comes we can add this feature as well!)

Q: If we see a second wave of financial collapse, worse than in March– is Celsius positioned to handle this?

Alex: It’s a great question. Our company and the crypto space in general has been through several catastrophic events since 2017. The market skyrocketing can be just as dangerous for us as flash crashes– because if an institution is shorting during a huge pump, they’re not going to be able to repay their loan. So this is why we need to know for every institution– what they are using the loan for, what their risk parameters are, and how much they have in other assets if they need to add more collateral to the loan. With these institutions, we are very quick to ask for more collateral or potentially recall loans if we need to.

On March 12th of this year, Bitcoin dropped 50% from peak to trough in 24 hours. We had many margin calls for our institutional loans, but all of them added more collateral with no issues. And we always have around 20% of our capital in reserve on hold for withdrawals. So yes, I think we are well-prepared for almost any type of scenario.

A much more catastrophic event for us would be if all of our users suddenly decided to withdraw all of their holdings from us. We would easily be able to pay them all back– our contract language with all of our institutions makes it easy for us to recall our loans at any time– but more importantly, we would have to take a long look at ourselves and try to figure out why so much of our community decided to leave.

Q: Is the maintenance still on for tomorrow?

Zach: Yeah, it’s still planned– to add features to the app and stability fixes. (Editor’s note: Celsius’ CTO, Nuke Goldstein, elaborated in the Celsius Telegram group that the fixes were on internal infrastructure to help support scaling and a new promo code engine. Nuke also clarified that PAX Gold would be added to the Celsius app on Wednesday, September 16th.)

Q: If the dollar is going down in the long run, is it wise to put money in stablecoins?

Alex: If you think the dollar is going down long-term, it may be a risky play– but you are earning 10–15% APY in the meantime. I talked to someone earlier today and they said they were holding in stablecoins, waiting for a crash in Bitcoin’s price. I think this can be a good strategy– earn 15% on your stablecoins, waiting for Bitcoin to go down, and then convert your assets to BTC when it’s at a low point. This is not financial advice– but my preferred method is just to buy a small amount of Bitcoin every month (this strategy is referred to as dollar-cost averaging).

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

…And click here for a step-by-step guide for onboarding with Celsius.