Digital currencies have grown in value and reputation by leaps and bounds since the launch of Bitcoin (BTC) in 2009. More than 18,271,364 BTC exist, with a total coin supply of 21 million. Furthermore, BTC is held by an estimated 23 million entities.
While Bitcoin accounts for 63.8% of the cryptocurrency market capitalization, it isn't the only coin to keep an eye on. Tether USD, for example, is a popular stablecoin that sees more daily transactions than Bitcoin.
That's not even including Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and other cryptocurrencies. To get access to the incredible savings interest rates for Bitcoin and other cryptos on the market, you'll need a reliable platform.
We'll examine one such website in our Celsius Network review.
Here's all you need to know about Celsius Network so you can decide if it's appropriate for you.
What Is Celsius Network?
Celsius Network is a wealth management platform that allows users to earn interest and borrow funds in cryptos. The network has an app for both Android and iOS devices.
The platform was founded in May 2018 as a result of an initial coin offering of its own token, CEL. They raised $50 million during the ICO, gaining exposure for the native coin in the process.
Since then, CEL has done admirably. It has a year-over-year performance of +3767.7%. Customers can earn extra interest on their savings accounts by using the utility token.
When taking out a loan, you'll also enjoy discounts on interest for loan repayment.
Which coins does the network support? More than 30 cryptocurrencies. They include popular digital currencies and stablecoins such as:
USD Coin (USDC)
Tether Gold (XAUT)
How did the Celsius Network come to be? It's a byproduct of the innovations of a true Renaissance man. Here's everything you need to know about the early days of Celsius Network and its fascinating founder.
A Brief History of Celsius Network
Celsius Network's CEO and founder is Alex Mashinsky. Mashinksy assisted in the development of Voice over Internet Protocol prior to introducing this platform (VoIP).
For those unfamiliar with VoIP, it is the technology that allows us to communicate via the internet without relying on telephone networks. Mashinksy also owns over 35 patents and has launched a number of successful enterprises, including Arbinet.
Arbinet Corporation had an initial public offering (IPO) in 2004 with a market value of more than $750 million. He also founded Transit Wireless, which at the time of his departure was valued at $1.2 billion.
Mashinksy's YouTube channel is still operational. Every Friday, he hosts Ask Mashinsky Anything events in which he engages with the community (AMAs). For the Money Over Internet Protocol (MOIP) series, he also conducts interviews with some of the top figures in the crypto world.
Jonathan Levin of Chainalysis and presidential candidate Brock Pierce have both been interviewed on previous episodes of the MOIP.
Alex has a wealth of experience in the technology industry and is now focusing his efforts and time on assisting others in achieving financial independence. Cryptocurrencies and the blockchain, he argues, are two critical vehicles for attaining these goals.
Celsius Network: Ease of Use
How easy is Celsius Network to use? The app makes creating a crypto savings account and earning yields a cinch. You'll also enjoy a simple onboarding process.
That said, you should be prepared for a slight delay following onboarding. Why? Because of the need for identity verification.
The Celsius Network app is available in more than 100 nations. And each of these countries comes with unique laws surrounding cryptocurrency.
This variation in legislation shouldn't surprise you. After all, there are still some countries in the world where trading cryptos represents a crime.
The onboarding and verification process differs depending on which country you live in.
Once onboarded, the app's user interface is streamlined and intuitive. As a result, you can navigate the platform without a large learning curve or need for guidance.
Should you desire a tutorial, Celsius's app boasts countless videos that walk you through each service and feature available on the app. It also contains detailed videos on how to use them.
For example, you'll see your balance and total earnings available at the top of your dashboard. With a single click, you'll see a weekly breakdown of your earnings with records stretching back to when you joined the app.
More Advantages of Using Celsius Network
With Celsius Network, it’s easy to keep track of your deposits, earnings, and withdrawal history. You'll also find it a cinch to start earning interest.
What do we mean? Every Friday, your rewards will get calculated. And every Monday, they'll get deposited automatically into your wallet.
When you make a deposit, you start earning. For example, if you deposit on a Wednesday night, you’ll see your first rewards the following Monday in your Celsius wallet.
Other features that prove equally simple include:
Buying more coins
Taking out a coin-backed loan
To get started, choose your preferred loan amount along with your interest rate and payback schedule. Then, you’re ready to start earning on your crypto-assets. It doesn't get much simpler than that.
Celsius is the only app with no withdrawal fees, no lockups, no minimums. You can also transfer crypto to other users in the app without fees. There are also no limits on withdrawals. If you are withdrawing greater than $75k then you must verify your identity for security purposes.
What backs the loan? Your coin balance. This means the amount is limited based on what's in your wallet. Your coins stay in your wallet and continue earning while paying back the loan.
This system makes it a convenient option when you need cash. But you won’t have to withdraw any funds from your Celsius wallet to realize it.
Celsius Network's Four Loyalty Tiers
What else do you need to know about Celsius Network? The platform has four loyalty tiers. These tiers are stipulated by the percentage of CEL tokens customers hold as opposed to the rest of the funds that they've staked.
The Bronze Tier
The Silver Tier
The Gold Tier
The Platinum Tier
What do you need to know about each of these tiers? Let's take a closer look at each one. That way, you'll get a better idea of what perks are possible with Celsius Network.
The Bronze Tier
Customers of this tier will receive between five and 10% in interest on CEL. But the benefits don't stop there.
You'll also enjoy 5% bonus rewards and 5% loan interest discounts with the Bronze Tier.
The Silver Tier
As for the Silver Tier? You'll receive between ten and 15% yields with CEL. You'll also enjoy bonus rewards of 10% and loan interest discounts of 10%.
The Gold Tier
Moving up to the Gold Tier, you'll get 15 to 20% in earnings with the platform's proprietary token. Bonus rewards come in at 20%, and you'll see 20% loan interest discounts, too.
The Platinum Tier
Last but not least, you'll upwards of 20% on CEL at the Platinum Tier. You'll also get bonus rewards of 30%. And you'll enjoy loan interest discounts of 30% as well.
As you can see based on the data above, the more CEL tokens you hold on the platform, the higher the yields you'll receive. Of course, HODLing in CEL proves riskier due to the high volatility of the crypto market. So, you must weigh the advantages and disadvantages carefully.
Other Services Offered by the Network
What else do you need to know about Celsius Network? It provides a useful service called CelPay.
As the name implies, Celpay is an in-app payment solution. This service lets you network with other Celsius users to facilitate sending and receiving cryptocurrencies. That way, you don't have to deal with unwieldy cryptographic addresses and network fees.
Instead, when you send one Bitcoin, your family member or friend receives one Bitcoin. Best of all, the person you send crypto to doesn’t need to have a Celsius wallet to receive your funds. It doesn't get easier than that.
Generally, it’s a streamlined and convenient platform. This platform proves simple for customers to use and navigate all of the features offered.
It's also worth noting that the company is renowned in the community for not charging Celsius network fees for the services it provides.
That means no deposit fees, no transaction fees, no withdrawal fees, no early termination fees, and no origination fees. Period.
What fees will you pay in the app? They come solely from third-party services (such as Wyre, Coinify, and Simplex) for the purchase of digital currencies.
Celsius is also in the process of adding CelSwap, an automated market maker (AMM) and decentralized exchange (DEX), to the app. This feature will allow users to swap between currencies to take advantage of higher interest rates on some tokens.
The Safety and Security of Celsius Network
Is Celsius Network safe? This is a valid question with a complicated answer.
After all, each week, the news is cluttered with stories of crypto entities that get hacked, resulting in the loss of untold user funds. What steps has Celsius Network taken to ensure its customers' funds remain safe?
Celsius Network boasts licenses with FinCEN and the American SEC. The company has many measures in place to protect user assets. They include everything from two-factor authentication to biometric signatures.
What's more, funds get stored with third-party custodians like PrimeTrust and Fireblocks. Both provide insurance on customer assets. Fire block uses MPC (multi-party computation) wallet infrastructure. Celsius has a dedicated in-house security team composed of ex-military cybersecurity professionals.
In their 3+ years of business, Celsius has never had a hack, security breach, or loss of funds.
Celsius Network can be trusted to pay interest and provide loans quickly. As long as you stay on your toes about these issues, you won't be surprised when using the site.
How Does Celsius Network Pay High-Interest Rates?
Celsius only pays what it earns. That's why the company adjusts rates so frequently. Compared to what traditional finance lenders or banks make, it represents around 15 to 20% of net profits.
These profits get distributed to company shareholders, not depositors. The network doesn't pay shareholders any dividends. Instead, it passes earnings along to customers.
Ultimately, Celsius's mission is to return 80% of its revenues to the Celsius community via weekly interest payments. Celsius generates profits through lending cryptos (e.g., Bitcoin (BTC) or Ethereum (ETH)) to institutions.
Currently, Celsius boasts more than 340,000 active users. The platform also has 340 institutional clients. Expect to see these numbers continue to rise. It's also worth noting that Celsius published a thorough explanation of how they set rates back in 2019.
How Does Celsius Make Money?
Celsius Network's finance team creates returns for the community by lending the community's digital assets to borrowers in the institutional and retail spheres.
Celsius Network has a stated objective of returning up to 80% of the revenues made from lending the community's assets back to the community on a weekly basis.
Because the rate of returns the network can achieve in the lending market changes almost daily, Celsius adjusts the rates that the community earns on crypto assets each week.
Is Celsius Network Insured?
The company has $20 million in insurance in hot wallets. These contain coins in transit from one place to another. But Celsius doesn’t have insurance on currencies lent out.
Why? Because Celsius loans out coins to a wide variety of different institutions. These loans get collateralized, unlike many others in the industry.
That means there's a minor chance that multiple institutions could get hacked. If this happens, the company could lose its funds. In this worst-case scenario, the network wouldn't have enough collateral to cover its losses.
Can You Earn Interest on the Amount Above a Loan's Collateral?
If you take out a loan with Celsius but continue to deposit more of the same collateral, you'll earn interest on the amount above the collateral. And you don’t need to do anything for this to start happening. It's automatic.
You'll earn interest on everything not locked up in collateral. What's more, you can swap collateral between different coins.
What to do? It's as simple as reaching out to the company via the following email address: email@example.com. From there, Celsius Network's skilled team will handle the rest.
What Advantages Do You Get With Celsius?
Celsius Network permits customers to earn interest in their cryptos. It also allows them to borrow against them instantly, with no fees. Celsius’s mission remains to return 80% of its revenue to the community via an interest in cryptos held in the Celsius app.
Currently, they offer rates of 11.5% APY on stablecoins. Customers will also enjoy anywhere from two to 18% APY on other cryptocurrencies like Ethereum and Bitcoin.
Their rates fluctuate over time. Nevertheless, they get set weekly based on how much Celsius earned in the previous week.
What is CEL Token?
As we've already mentioned, CEL is the native token of the Celsius ecosystem. Why does CEL matter? Because it can unlock tremendous earnings for users.
When it's all said and done, the CEL token can be held to receive bonus interest on deposits. Earning with CEL also permits access to discounts on loan interest payments.
Is Celsius Network Safe to Use?
No doubt you will want to use a safe, reliable place to store and hold your crypto. Whenever we choose to store our funds, be it fiat or crypto, we want to know we're in safe hands. Does Celsius Network offer a safe and reliable source?
With any financial platform, crypto, or fiat, we recommend you do your due diligence. Depending on where you do your own research (DYOR), you'll receive like-minded or opposing viewpoints.
As of January 2021, here are some noteworthy numbers for the Celsius Network:
345,854+ active users
$8.2B loans processed
Hodls $5.3B in community assets
$200M crypto rewards distributed
It is also important to mention that Celcius Network is a custodial wallet. This means that you are not in control of your private keys. As the mantra goes, not your keys not your crypto.
It's worth noting that Celsius was the very first yield provider of crypto. Today it has the largest assets under management of any consumer-facing crypto yield provider with over $10B under management.
Their CEO does a public AMA every Friday and answers community questions. Celsius pays up to 80% of its revenue to users as rewards on a weekly basis.
According to Celsius, they've paid the most in rewards in comparison to their competitors - over $350MM.
How Does Celsius Network Fund 3-10% Interest Rates?
With traditional banking systems offering an average of <1% APR, how is Celsius Network able to provide a much higher option? The short answer? Banks choose not to.
Banks keep >80% of your 1% interest—a sobering thought indeed. Any bank's capital is generally between 14 and 25%. This is then evenly dispersed amongst shareholders through dividends or share buyback.
Banks don't have to and banks don't want to. When you deposit your fiat currency into a bank, you'll get next to nothing for it. Banks profit both figuratively and literally by giving the individual a low rate.
Competition is lower in the traditional banking system as well, allowing them to get away with this for the past 100 years.
How Interest Rates Are Determined
The state of the market, the insistence of coins, and 80% of Celsius' profits being returned to the crypto community all play a role in how weekly interest rates are determined.
Celsius Network interest rates provide a competitive alternative to similar crypto platforms and traditional banking systems. For coins with more demand, Celsius Network remains competitive with their high-interest rates as well.
How frequently are interest rates Changed
As stated in the paragraph above, interest rates are calculated by three major contributors.
You can always check the current state of interest rates on celsius.network, the app, or on their respected social media channels. On a week-to-week basis, they remain fairly constant.
Interest rates are subject to change, and Celsius is open and transparent about that fact.
Compare with Celsius Network alternatives
Similar Savings Accounts and Loans
|Coin||Platform||5 Star Rating||Interest Rate (APY)|
Celsius Network Review
As you can see, there are many advantages of using Celsius Network. But who is the ideal client for this platform? It proves most well-suited to beginners looking to buy cryptos without shouldering the full risk associated with the volatile crypto markets.
Besides newbies, the network will also meet the needs of passive investors who gravitate towards a safer tool for holding and buying digital currencies. Remember that there are no account minimums with Celsius Network.
By using this company, you'll also avoid hidden fees and other complications associated with withdrawing money. That said, we highly recommend doing your research before deciding on a crypto platform for your financial needs.
How can you learn more about different currencies and how the crypto market functions? Take a look at the leading CeFi and DeFi platforms that provide crypto loans, lending, credit cards, and debit cards.