Quick Facts

Approximate Market Cap$752,870,713 
Year Established2017
FounderAlex Mashinsky, S. Daniel Leon
Symbol/AbbreviationCEL
UtilityUtility Token

A cryptocurrency-backed loan, like a securities-based loan, uses digital currency as collateral. The main idea is that users pledge their crypto assets to get the loan and repay it over time. This type of loan can be obtained through a crypto exchange or a crypto lending platform.

Cryptocurrency interest accounts and lending services are now popular in the blockchain community. These services, which replace intermediaries, offer interest-bearing cryptocurrency balances and low-fee lending that uses cryptocurrency as a guarantee.

What is Celsius – Definition

Celsius Network is a worldwide P2P financial decentralized network. It connects cryptocurrency asset owners with borrowers. The network enables cryptocurrency owners to earn interest on their holdings in the form of coins or obtain cash loans.

The system is built on its native coin CEL, used to make loans, rewards, and payments. CEL is an Ethereum ERC-20 standard coin. For its token, Celsius employs a modified proof-of-stake method.

CEL is primarily utilized as an incentive system for Celsius Network members. It is also used as a collateral instrument to receive loans. CEL holders benefit from the cryptocurrency’s ability to make lower loan payments or earn better returns as compared to other cryptocurrencies.

Inside the Celsius system, there are four important participants:

  • Lenders;
  • Borrowers;
  • Celsius platform:
  • External Exchange markets.

Celsius users may make extra money by depositing crypto assets on the site and earning incentives in a variety of cryptocurrencies. Bitcoin, Ethereum, or USDC are among them.

Pros and Cons

Pros

  • No fees
  • User-friendly transfer system
  • Perks for using

Cons

  • Highly centralized
  • Limited trading
  • Not available to US citizens

The History

Celsius Network was founded in 2017 in London by Alex Mashinsky, S. Daniel Leon, and Nuke Goldstein.

Through launching an ICO in 2018,  Celsius raised approximately $50 million by selling 325 million CEL. The Celsius team earned 25% of the total, with the remaining tokens secured in a smart contract. This smart contract would only allow new loans to be granted if the CEL token was worth more than $1.50 for 10 days in a row. 

This was accomplished in 2020. After a prolonged period of increasing momentum throughout September, the CEL token’s price increased by almost 4,500 percent. The remaining tokens can be released and distributed for loans if the CEL token remains over $3 for 30 days or more.

How Celsius Works

The Celsius Network is a blockchain-enabled fintech platform.  The Celsius mandate is simple at its core: provide financial services and do what is best for the community, not the middlemen.

Celsius provides 80% of its earnings to network users in the form of incentives. The remaining 20% is used to support project expansion. This value proposition questions traditional banking structures while emphasizing the Celsius community. 

Celsius enables borrowers to swiftly obtain fiat cash by using their cryptocurrency as collateral and paying a low-interest rate. 

Celsius Network does not impose any fees for deposits, withdrawals, defaults or staking termination. Furthermore, interest is paid weekly and is withdrawable at any moment. Platinum members receive highly attractive rates. This adds significant value to the CEL coin.

Advantages & Disadvantages

Advantages

Network fees

There are no withdrawal fees, deposit fees, processing fees, early repayment fees, or origination costs at Celsius.

No credit check

Users are putting their cryptocurrency up as collateral in order to obtain a loan based only on that. Their financial history is irrelevant in this case.

Team and partnerships

Celsius is composed of individuals from diverse backgrounds. Serial entrepreneurs, financial specialists, and experienced blockchain innovators are among them.

Disadvantages

Centralized wallet

The primary issue with centralized networks such as Celsius is that consumers don’t possess the private keys to their wallets.

Margin call and liquidation

Celsius uses a margin call, which means that if a user’s collateral value falls below a particular level, Celsius will ask the user to contribute extra to fulfill the minimum coverage on their loan.

Celsius in the Global Crypto Market

Celsius has a total supply of 695.658.160 CEL coins and a circulating amount of 238.863.520 CEL coins. The recent adoption of the Celsius Network app, as well as the improved usability of the platform, has fueled a significant spike in the price of the CEL token.

 Because of the current uncertainties surrounding the UK Financial Conduct Authority banning the usage of crypto-related firms in the UK, Celsius Network may cease trading as of July 2021. 

Last year, cryptocurrency firms that wanted to continue trading applied to the FCA register. Businesses that did not meet the deadline, on the other hand, were barred from trade beginning in early January 2021. While Celsius Network’s application is being reviewed, the FCA has provisionally registered them.

FAQ

Are Celsius loans available everywhere?

Celsius loans are not accessible everywhere. If users have the Borrow option on their Celsius mobile app, Celsius loans should be accessible in their area.

What currencies are loans available in?

Users can get a loan in USD or in stablecoins. Some coins aren’t accessible everywhere.

How can users get CEL?

There are two ways to get CEL, earn it as an interest or buy it.