Welcome to my Celsius Network Review. Today I’ll discuss what Celsius is, how it works, whether it is safe, what its products are and its limitations.
Celsius is an online platform that is aiming to disrupt the financial industry. It offers similar products to banking institutions, such as earning interest on assets, the ability to pay and transfer finances, feeless deposits and withdrawals and the ability to borrow money. However, it differs from traditional financial institutions in one distinct way.
Unlike banks and other financial institutions that retain the majority of their revenue, Celsius distributes 80% of its revenue to its users. This aligns with the Celsius Team’s vision, which is to allow every-day investors to succeed financially. For these reasons, anyone seeking financial independence or the ability to generate passive income through cryptocurrencies may benefit significantly from this platform.
The majority of banks typically receive 14-25% return on their capital, yet typically offer their paying customers around 1% interest on their deposits. Subsequently, these banks are keeping over 80% of their profits. These profits are then distributed to shareholders, typically in the form of dividends.
Alternatively, the Celsius business model operates in reverse, by giving 80% of the total revenue back to the community. This occurs weekly in the form of earned interest. Celsius still retains profits by issuing asset-backed loans to hedge funds, exchanges and institutional traders at an average rate of 9% interest.
Celsius also has its native cryptocurrency – CEL Token. This utility token offers higher interest rates on holdings and lower interest rates on loans. This incentivises institutional and retail investors to invest in the token, increasing the market cap of Celsius Network and allowing them to continue offering such attractive interest rates.
Celsius takes security very seriously, by integrating a range of cybersecurity defence measures. They also provide a 24/7 Security Operations Center, an immutable audit trail and provide disaster recovery controls and insurance. If losses or damages occur to the user’s funds; they will use their balance sheet to cover damages. If the losses exceed their balance sheet, they will then use Eligible Digital Assets to absorb the remaining losses. Therefore, it is one of the safest platforms for storing crypto assets.
To enhance security measures from a user perspective, you can also implement these additional security protocols to further protect your crypto.
Celsius Network offers a range of products that traditional banks and financial institutions offer. However, due to the unique structure of Celsius, these products have much higher incentives for investors.
Users who deposit any of the 30+ supported cryptocurrencies into the Celsius Wallet can earn attractive interest rates on their assets. These interest rates range from 2.05% to 18.55% and they are paid out weekly.
Rewards can be received in that particular cryptocurrency or they can be received in CEL tokens, the native cryptocurrency of Celsius Network. A range of popular cryptocurrencies is supported such as Bitcoin, Ethereum, Chainlink, Uniswap and Stellar among others. Alternatively, users can choose to earn interest on their stable coins. USDT, USDC, DAI and TUSD are supported.
For Australian, British, Canadian and Hong Kong residents, they also offer stable coins in these native currencies. For users who choose this approach, they can receive weekly interest rates above 10% for their native currency. Making it a much better interest platform than traditional banks which offer rates from 0.1-2%.
A unique feature of Celsius Network is the option to borrow both cryptocurrencies and cash at an Annual Percentage Rate (APR) of just 1%. That’s right, depending on the amount of collateral that you deposit and the duration of your loan, you can borrow fiat currency and cryptocurrencies with an interest rate of 1%.
‘Being decentralised, users can apply for these loans in minutes without any credit checks being required. This allows investors to borrow money without having to sell their assets. Additionally, this can provide tax advantages by deferring capital gains tax, as you aren’t selling your assets.
CelPay is a feature that enables users to send and receive cryptocurrencies from one another without encountering fees. These feeless transactions occur within seconds and enable a fast and cost-effective method of spending and receiving tokens.
The process for utilising CelPay is simple. Just add or select a recipient, choose the currency and the amount that you wish to send and then you can add a note or send the currency. The process takes seconds to complete and the transaction is processed in a similar time frame. This enables fast, feeless and borderless payments.
Like all Cryptocurrency platforms, Celsius Network has its own native cryptocurrency. However, unlike many platform tokens, the CEL token offers unique utility incentives. Users who hold CEL are rewarded with increased earn rates and lower borrowing rates. These are dictated by CEL holding percentages which put users in particular tiers. The higher your CEL holding percentage, the higher your loyalty tier and subsequently, your benefits.
As per all platforms, Celsius comes with some limitations. These come in the form of other competitors, namely those that offer better interest rates.
Celsius offers more than 30 crypto products that users can earn interest on. This is only a fraction of the crypto market. Fortunately, Celsius provides interest rates on some of the most popular altcoins and stable coins, so this may not be considered an issue for macro-investors.
However, for users who like to hold smaller, less common altcoins, they may not be able to earn interest on their assets on the Celsius Network. Instead, other wallets, exchanges and liquidity providers may be more suited.
Despite offering competitive interest rates on a range of assets, there may very well be better rewards elsewhere. DEFI projects can typically yield returns over 100% APR through yield farming and by providing liquidity. While this comes with its form of inherent risks, people with a high-risk tolerance may prefer these options to maximise potential profits.
Alternatively, other products offer a similar service to Celsius Network. These include BlockFI, Avalanche, Binance and Crypto.Com among others. For people interested in learning more about these competitor projects, I cover Binance and Crypto.Com in these reviews:
When it comes to generating passive income with cryptocurrencies, there are two main methods. These are lending/earning and staking. With Celsius Network, you are lending your tokens to other investors and earning a % cut for providing that service. This differs from Staking which occurs when you lock up your assets in a wallet or delegate them.
When you lend cryptocurrencies to other users, they are borrowing said currencies at an interest rate. You receive a commission of that interest rate which gives you an incentive to lend. This differs from staking which occurs when you delegate your cryptocurrency to verify transactions on the network and provide an additional layer of support to the network. Under the Proof of Stake (PoS) system, users receive a portion of the blockchain rewards in the form of interest.
Subsequently, users who actively want to get involved in strengthening their cryptocurrency’s eco-system may choose to prefer staking over lending their crypto to other investors. As such, staking wallets such as AtomicWallet or TrustWallet will be better options.
For more information on the difference between Lending and Staking, this is a useful article:
Celsius Network has lived up to its vision of helping the poor and middle class reach financial independence. By giving 80% of their profits to the users, people who take advantage of the Earn, Borrow and CelPay features can reap rewards that have traditionally been reserved for financial institutions.
With loan rates as low as 1% APR, earn rates as high as 18.55% that are paid out weekly and the ability to transfer and receive cryptocurrencies instantaneously and without fees, Celsius offers a revolutionary platform. For anyone in the crypto space who wants to generate passive income or receive tax advantages through the borrow feature, Celsius Network is a great option.
For investors who hold lower market cap altcoins and those who would rather yield farm or stake their cryptos, other platforms will be more useful. However, for the majority of investors, Celsius offers an easy, cost-efficient method for earning passive income on their assets.
If you would like to sign up to Celsius Network and earn passive income on your cryptocurrencies, you can use my referral link to receive a Bitcoin Bonus valued at $30 USD.
Alternatively, you can download the app and once prompted for a referral code, you can enter the following code to be eligible for your bonus:
If you’re having difficulty signing up or would like a guide to view the registration process, this resource will be of use: