[Walk-through] - Celsius.network

By HykSs | Crypto Invest | 16 Dec 2020


First things first, I'm not a crypto expert or a certified personal advisor, just a newcomer wanting to share my first experiences and mistakes and hoping it might help some of you to jump right into the Crypto/DeFi world.
I'm very open to critics, comments and anything that would help to make this article better, feel free to drop a message anytime.

I'd also like to let you know I have a strong bias against the current banking system and I hope the Crypto/DeFi mass adoption will precipitate its downfall.
Wait... we are going to talk about Celsius which falls under CeFi (Centralised Finance) category.
Isn't it the same for our current banking system? :D
Well yes it might be similar in several ways and I if we focus on the lending/borrowing money business only, they might use the same principles to make money.
One big difference though, interests paid to the lender !
While depositing your money into your bank will bring you ridiculously low interest rates (even negative), some CeFi lending rates are really attractive.
At the end of the day both are custodian of your money and you'll have to trust the institution/people behind but I have a slight trust issue with institutions which have been fattening for decades on all the fees they could charge on us :)

Enough ranting, time to talk about Celsius Network.

Celsius is offering different services such as lending money, borrowing money and sending money to another Celsius user (without transaction fee).
This post will focus on the lending money part.

How does it look like ?

Please note that Celsius is available via mobile app only, there is no webapp.
This is a screenshot of my account.
wallet-homepage

The app is user-friendly and very simple to use.
You can decide to add coins by buying it from a 3rd party payment provider or to transfer it from your crypto wallets (I personally made transfers from Binance).
buy-coin-options

When you click on “Transfer coins”, you will be able to select the token you want to transfer in and your wallet address/QR code for this coin will be displayed.

From the wallet page you will also be able to reach your wallet details including you wallet total balance with its daily/weekly/monthly change chart and transaction history (deposits, rewards and withdrawal).
wallet-details
(thumbs up for the total gas fee waived :D)
transaction-history

Clicking on “Total Earnings” you will display your earnings details including a graph and all your reward transactions
earnings-details

Last but not least, you can access the details of each coin you have added in your portfolio including graph, price and transaction history.
coin-details coin-details-2

On this page you will be able to choose how you want to get rewarded for this specific token, earn-in-kind or earn in CEL.
This can be set in your wallet settings for all your coins at once or for each one of them.
settings-wallet

Available coins and rates

Current available coins are: BTC, ETH, CEL, XRP, BCH, LTC, XLM, EOS, OMG, 0x, ZEC, TUSD, GUSD, PAX, USDC, BSV, DASH, ETC, USDT, TGBP, TAUD, THKD, TCAD, DAI, XAUT, BUSD, BAT, KNC, LINK, LPT, MATIC, SNX, SGR, PAXG, UMA, UNI, MANA, COMP, SPARK.
Coming coins are: ALGO, TRX, BNB, IOTA, KAVA, BAND, ZEN.

I think it's a common practice but keep in mind that BTC rate is a bit higher for the first bitcoin you store and is then decreased for the rest of your BTC porfolio (see illustration below).
BTC-rate-reduction

Earning rates are fluctuating and updated on a weekly basis depending on supply and demand, the more demand for a coin the higher the rate you'll get.
You will be informed by mail every Monday (see illustration below).
weekly-rates-mail
You can see 2 different rates for each coin, the lowest if your portfolio is holding less than 5% of CEL token and you decided to earn-in-kind (e.g. deposit in BTC and earning reward in BTC, ETH on ETH, etc.).
The highest rate is reserved for Platinum tier account (holding more than 20% of CEL token) who decided to get their earnings in CEL token.

Loyalty system

Earning rates for lending (and for borrowing) are boosted according to your loyalty status.
Which is decided according to the percentage of CEL you are holding in your Celsius wallet.
loyalty-system
Several benefits coming from this decision:
- Highest tier is not reserved to biggest wallets
- Virtuous circle for CEL value
- CEL earning rate is not bad at all (5.12%)

I'm personally bullish on CeFi solutions on a short/mid-term horizon as they are a bit easier to adopt compared to some DeFi projects.
I didn't buy CEL yet but I'm planning to do in the coming days as I think its price would increase in the coming years.
Celsius might not become THE CeFi platform that everyone will use but it could be, who knows - but it will definitely grows.

Reward system

You don't have to do anything to start earning your rewards except creating a Celsius wallet and transferring coins to it.
Rewards are accrued every week and here is an extract of Celsius website regarding reward calculations:
- Reward accrual period: Friday 05:00:00 UTC to Friday 04:59:59 UTC
- Reward calculation price snapshot: Friday 05:00:00 UTC
- Reward payment day: Monday, no set time.

Reward calculation is done from Friday to Friday but reward accrual happens on Monday.
I understand that our interest is compounded from Monday to Friday only – basically rewards being prorated on 4 days instead of a full week compounding.
Now that's something bothering me here and I hope one of you might correct my understanding.

Celsius in figures

You can find some interesting figures:
- 256,702 Celsius members including 88,286 active wallets
- Total assets culminating at US$ 3.3B including US$ 2.375B
- 40.36% of Celsius users are Platinum
- 48.62% of Celsius users are earning in CEL
celsius-community

A quick snapshot of CEL price:
CEL-USD-chart
Not trying my luck on price prediction but at least we can observe an healthy increase over the months.

Something I'd like to see from Celsius is what Nexo is doing with dividends and how they distribute it to their users (promoting earn in NEXO).

Deposit & withdrawal

Regarding deposits I'll link this help page from Celsius support – deposit of coin is well explained there.

Some notes to keep in mind:
- There is no lock-up fee
- Binance Chain (BEP-2) is not supported
- There is no maximum for your deposit

Same for withdrawal steps you can find it there.

Some notes to keep in mind:
- From US$50,000 and up withdrawals are manually handled (increasing time constraint)
- There is a US$150,000 limit / 24h

Conclusion

Very simple to adopt and competitive earning rates.
As I said I'm bullish on CEL (but also on NEXO and CRO – walk-through to come) so it makes sense to me to buy some CEL to reach the Platinum tier level and enjoy multiplied earnings (from better tier + CEL price increase).

I'll be happy if you drop a comment below, especially if it's a constructive criticism !
Coming posts will be about protocols I've tried: Nexo, Curve, yearn, pancakeswap, binance earn.
Feel free to suggest any DeFi/CeFi services you would like to have a review on, I might give it a try for you ;)

I'm sharing my referral link if you want to join Celsius, it will give both of us US$20 of BTC for your first transfer of US$200 or more to your wallet. All my thanks if you use it, no hard feelings if you don't ;)

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HykSs
HykSs

Always hungry for Finance and Crypto knowledge. Proud member of Leofinance community https://leofinance.io/@hykss


Crypto Invest
Crypto Invest

Fond of personal finance and bullish on cryptocurrencies. I wanted to share my first steps in the world of DeFi, CeFi and my experiences/mistakes. Hoping it might help people to avoid traps through my trials and errors.

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