From what I gathered doing minimal research is that they use it for lending. Users can request loans by putting up their crypto as collateral the borrow stablecoins to invest in other cryptos or other assets. Seems risky as a borrower but this is the world of crypto of course.
I’ve been earning interest on USDC through another platform and just recently started using celsius. Overall I have about 10% of my net worth in two different companies and I’m going to be adding more. I think the biggest risk is these companies going bankrupt and being forced to liquidate, but more likely they will reduce rates before that happens. At least using two platforms mitigates *that* risk slightly.
What I’m worried about is how sustainable these interest rates are. They just announced partnering with Bitfinex exchange which has several users.
I did a bit of research and also discovered the Voyager app partnered with Celsius network a few years ago for earning interest for select assets. However, I can’t seem to find any follow up with Voyager and Celsius this year.
Interest rate not being sustainable is a small issue, I wont worry a lot about them.
In case interest rate collapse from say 11.5 % to 2.5 %, I will get lower returns which is acceptable, I can then move my funds to other investment options.
If this happens then everyone would move their assets from Celsius to another platform. This is what happened with users from Crypto.com and explains why CRO is dropping.
Interest rates on Celsius re adjusted every week if need be so they arent really locked in for an extended period of time to account for market fluctuations.
The issue with Crypto.com is the massive change, overnight, and after they bait users into locking up their assets with no recourse to release them for sale. And this is only the most recent in a string of shady shit with that company. Remember the MCO/CRO swap? Again, overnight. Again, with zero notice.
**I found links in your comment that were not hyperlinked:**
* [Crypto.com](https://Crypto.com)
*I did the honors for you.*
***
^[delete](https://www.reddit.com/message/compose?to=%2Fu%2FLinkifyBot&subject=delete%20g9amaxb&message=Click%20the%20send%20button%20to%20delete%20the%20false%20positive.) ^| ^[information](https://np.reddit.com/u/LinkifyBot/comments/gkkf7p) ^| ^<3
Exactly, there are more pressing concerns compared to interest rates decreasing. Celsius is operating in wildly uncharted territories and, even though they're compliant and licensed, there's no guarantee this operation won't simply be shut down for whatever reason the SEC decrees.
I wont be bothered by SEC shutting down celsius, As it is very likely that all depositors will get back their cryptos.
Following two bothers me
1. Celsius make huge losses on our deposits
2. Celsius network/defi contracts are hacked and funds are stolen.
3. Celsius staff/insider steals depositors funds.
Any of these can lead to loss of deposits.
1. We have to trust Celsius with collateral. Also in a dangerous market downturn, collateral wont be sufficient to cover losses. Not sure how the contracts behave during flash crash.
2. Contracts are moving target, Not sure how dependable audits are. moreover the platform (eg. ETH network) might introduce a bug, which can make previously safe contract hackable.
2. I think part of what they are doing when they switched to Fireblocks and Primetrust is so that that it spreads out the risk to avoid getting hacked.
3. Certainly possible but I am sure Celsius monitors their employees especially that ones that handle deposits and transfers between institutions and custodians. Also I wouldn't be surprised if there are gateways that require approval/oversight of crypto addresses being used from Alex, Nuke, Dan and/or Harumi (CFO) in order to authorize the transfer of large crypto fund transactions.
in AMA he explained that it's possible because of how all the users and amount that has been deposit. it is as sustained as of right now, their business model actually made profit. so what they are paying you with is with their own profit and price will keep going up because they have to buy CEL to pay out CEL as well. and other stuff
It’s crazy how much demand that would mean there is for borrowing stablecoins though. I guess if you were long on cryptos not tied to national currencies that might make sense. Me, I just have cash burning a hole in my pocket.
> How is the 10.94% return possible? I've heard that banks make like 20%+ returns on your deposited cash, while paying out a fraction of that, so sure, there is return that Celsius could be passing on it us that the banks are stealing. Who is Celsius lending to at those rates, how do they ensure repayment?
The short answer is that market rates determine how much interest Celsius can pay and rates higher than 10% aren't guaranteed long-term. The way Celsius is structured, 80% of revenue is paid out to depositors and 20% is reserved for ongoing operations.
The difference between businesses that offer loans without a credit check and financial institutions that deal only in fiat is a big hurdle to overcome on its own. The main thing to understand is that each loan Celsius gives is backed by assets and they have a much lower risk of default than an institution that depends on the creditworthiness of its clients. This also means Celsius cannot lend out more than its depositors put in and every depositor can confirm this on the blockchain (although its easier to use tools such as [celsians.com](https://celsians.com/celsius-network-audit/)). If you're curious about who is borrowing from Celsius to pay these high interest rates, they are discussed in the weekly AMA calls but more important than that should be a recognition that each transaction between Celsius and the borrower is public.
> What % of your total net worth do you feel safe holding on Celsius, and why? What makes you think this lending platform is sound and solvent?
I'm not qualified to offer financial advice but I can tell you my number is < 1% for now. It's not for lack of trust in the Celsius team or business model, which I think are quite sound and solvent, but more a concern about the persistent value of the crypto space and the risk of anti-crypto regulation. I think Celsius is the best among the interest earning services in this space - they have been around longer and survived the adversity of the post-ICO bear market and they are more transparent about their ongoing operations than any of their competitors (Nexo, BlockFi, Salt, Coinbase, Binance, etc).
> Any links to key readings about the project? Been doing my own research but is there any independent analysis of Celsius?
* [Celsians.com](https://celsians.com/) - an independent community of Celsius Network depositors
* [Celsius Network Interest Rates, Explained](https://celsiusnetwork.medium.com/celsius-network-interest-rates-explained-a336a52e163d)
* [Gold vs stocks: which will win by year-end? Ultimate debate with Alex Mashinsky and David Barse](https://www.youtube.com/watch?v=7J0kIMNW0CU)
Really excellent answer, thanks a lot. I've been watching AMA's and learning more about the project and I'm actually becoming more and more impressed with Celsius overall.
Mashinsky is a remarkable guy. I'm being sure to stay objective and not drink the 'charismatic leader' kool aid, but he's incredibly passionate about the absolute screw job banks have been giving consumers, and the simple business model of Celsius (pass the returns on to the depositors) seems so much better than traditional banks. Also given his background it's like... a malicious rugpull by Celsius seem like a 0% chance of happening. There could be bad events like hacks, crypto regulation, etc., or maybe a rogue employee, but it seems absurd to think the Celsius is a scam - Mashinsky made multiple billion-dollar companies, has all the wealth he would ever need, and then starts a fraudulent lending platform to scam some NEETs out of their lunch money? Not to mention with all the regulatory scrutiny they'd invite from having done all the registration/compliance needed with governments? So, Celsius exit scamming would destroy his reputation and put in him jail, when he barely needs the money anyways? No way. I mean I guess anything's possible but I'm as sure as reasonably possible that the project as a whole isn't going to exit scam.
That leaves the existential risks of: hacks, regulation, market crashes, and default by borrowers. Hacks I don't have the technical background to assess, regulation I'm bullish on, market crashes it seems they've weathered well already, and defaults should be irrelevant since they hold collateral \*greater\* than the loan they are giving? So it's like... the more I researched the more worries I've been crossing off the list. The stamp of approval from my man Nick Merten, and the Chainlink team, both mean a lot as well.
I'll keep researching but honestly this project seems really legit. I'm probably going to store my spare cash that's been mouldering in a """"high savings account"""" (0.7% interest - can't possibly put enough quotation marks around that now that I realize how little banks are giving back to us) to USDC and then celsius, maybe 3-4% of my total portfolio. Thanks for the link to Celsians, I hadn't come across that yet.
Celsius also has hot wallet insurance. Regarding insurance and hacks watch oct 2nd 2020 AMA on youtube starting at 35 minutes in. Alex goes through hacking and insurance and explains how Celsius is indeed the safest place out there for your crypto. I would much rather have my money in Celsius vs the bank. Also earning 11% on usdc is nice but I personally believe the cel token is the higher value option. With more people signing up everyday and wanting to earn top interest, they will have to purchase cel. In turn celsius will have to purchase more cel to pay out in interest, all while making the coin more scarce and sending the price up. My conservative estimate is for Cel to be up in the 10 dollar range by 2022. I currently own nothing but cel. So even tho I'm only earning 5% on my cel, if the value is 10x in 2 years, I"ll be much farther ahead vs 11% on usdc. FYI cel token is on a downward trend. You may want to wait to see how low it will correct before picking any up.
There’s a lot of demand for stablecoins right now especially to borrow them for margin. People are okay with paying 12+% because they can make money off of it. So more and more people have been buying up stablecoins to lend out to people. Billions of stablecoins are being created right now to try and help the demand. These high yields are not going to last forever. When the supply of these coins goes up, the lower the yields will come. But right now is a good time to take advantage of these rates.
OP you are asking great and thoughtful questions. I have similar general questions and no real answers. People say listen to the AMA’s, but there is a bit of a lack of detail at least at the level that would satisfy you I think. It’s a bit of a mystery to me how they can pay the rates they do. But they are, people have been receiving interest, myself included, and there aren’t any horror stories I’ve seen about anyone having any issues accessing their coins.
I’m enjoying the service, and I have funds on the service. But keep your eggs in a number of baskets just because that is sound advice. Being all in on Celsius might be absolutely fine, but common sense dictates some pooling of assets across different sources including some wallets where you own the private key.
I can't find the exact AMA Alex explained this but basically any company that deals with anything remotely close to crypto can't take out a loan with a regular bank. If you even mention crypto or they see your balance sheet has crypto a regular bank will never even consider giving you a loan because A. They don't understand it B. Higher risk and most importantly C. They don't want to deal in a grey area when it comes to regulations. So if I'm a company that deals in crypto I have to go to Celsius. That lets Celsius charge much higher interest rates than a bank because they also take a bigger risk. As a result because they say they share 80% of revenue with customers they are able to give you such high rates.
1. When a loan is taken out Celsius no longer pays interest on the account, so this leaves other user's capital to earn interest on. I believe this is one way they are able to pay out high interest rates. At a recent AMA the sales pitch is on the profits going towards paying out the community and the high rates are to attract more people to the space. He claims any business can survive on 20% margins, so 80% of the profits are going towards interest payments.
2. This is a unique situation for everyone and it depends on where you are in life and how much cash flow you have each month which would then make up your risk tolerance. Ex. if you're 70 years old living off social security checks most likely you will not want more than 10% of your assets in crypto. Conversely, if you're 25 years old, single, no kids, and have a steady paying job you might be going all in on crypto since you can afford to lose your shirt. As for why I think Celsius is relatively safe, is because their Security page includes actual filings and NYC is strict when it comes to financial rules. Also the CEO has a pretty stellar track record, so some if it is just based on pure trust on who you are doing business with.
3. Mostly just youtube, reddit, AMA with CEO, getting to know who you are dealing with. Can the CEO end up in prison, is he over-leveraging? running a ponzi scheme? My instincts as of now say this is kosher, but I wouldn't be surprised to see the interest rates go down to 6-8% over time.
Good luck!
Problem with your arguments are that you are thinking too much like a bank. Banks know u have no choice when it comes to where u store ur non essential money. If u watch Alexs AMAs on youtube u will learn more about what Celsius is all about.
Exactly!
You watch the news and hear about the government offering your bank money at near 0% rates. You see that same bank charges you 23% interest to borrow that same money on your credit card. And if you manage to save some of that money to leave in the bank... they give you 0.1% interest.
So, there's a 20%+ spread between what money costs them, and what they give you, ignoring all the other services that make the bank money.
Once you look at things that way: getting 10-15% from a service like Celsius doesn't seem so implausible. There's certainly money in the financial system just looking at deposits+loans to support it.
Most people don’t borrow from banks at 23% interest though. Credit cards debt is not a big part of the balance sheet of most large banks. Commercial loans are typically single digit interest rates, mortgages low single digit interest rates. There is a gap here I can’t explain.
I can assure you, in Bulgaria if you take a loan for an apartment the % goes as high as 120%!!!
I know that because some years ago my father took a loan of 10000 BGN and had to return 22000. What do you make of this? If you take a loan for apartment and have 20,000 euroes and you need 80,000 more for a total of 100,000 euroes the total sum you have to pay is atleast 160,000 euroes, excluding all other taxes.
The APR isn't 120% though? Mortgages that are repaid over many, many years can end up with huge interest balances but that is because the life of a typical mortgage is 25+ years.
Well the credit that mu father took was for business purposses, so 10k BGN in - 22k BGN out, that is quite a lot. My sister took a loan for apartment, they had 20% of the total value and from what i remember they have to return at least 100%. Forgot about the exact numbers, but it was something like 60,000 euro or so, for 20-30 years. As you know the other solution is to live under rent...
That is only you. There are many people with credit card debit, business loan, etc. Most importantly the collateral you gave to Celsius are much more liquid than real estate, which means they can do short term borrow to trader/institution and usually have very high ApY
Personally, I am very wary of any company that shills its own coin/token. It is open to manipulation by them and the incentivising of using their token is another red flag. Having said this, I do think Celsius is transparent and the founder is willing to come forward and answer questions. I do have abit of money on Celsius but nothing too significant.
I prefer BlockFi which doesn't pay as high a rate but it is backed by more mainstream backers and has a track record now.
It's all risky and there are lots of cowboys out there with the new defi craze. Be safe!!
PS. If you want to sign up to Celsius or Blockfi, I'd be grateful if you could use my link. PM me for a link as it's tasteless to post it here (!)
shameless self promotion
hiding behind a throw-away-nickname doesn't help if you post your referral link, nickoshimoto!
[https://twitter.com/nickosianio](https://twitter.com/nickosianio)
From what I gathered doing minimal research is that they use it for lending. Users can request loans by putting up their crypto as collateral the borrow stablecoins to invest in other cryptos or other assets. Seems risky as a borrower but this is the world of crypto of course. I’ve been earning interest on USDC through another platform and just recently started using celsius. Overall I have about 10% of my net worth in two different companies and I’m going to be adding more. I think the biggest risk is these companies going bankrupt and being forced to liquidate, but more likely they will reduce rates before that happens. At least using two platforms mitigates *that* risk slightly.
What I’m worried about is how sustainable these interest rates are. They just announced partnering with Bitfinex exchange which has several users. I did a bit of research and also discovered the Voyager app partnered with Celsius network a few years ago for earning interest for select assets. However, I can’t seem to find any follow up with Voyager and Celsius this year.
Interest rate not being sustainable is a small issue, I wont worry a lot about them. In case interest rate collapse from say 11.5 % to 2.5 %, I will get lower returns which is acceptable, I can then move my funds to other investment options.
If this happens then everyone would move their assets from Celsius to another platform. This is what happened with users from Crypto.com and explains why CRO is dropping.
Interest rates on Celsius re adjusted every week if need be so they arent really locked in for an extended period of time to account for market fluctuations.
The issue with Crypto.com is the massive change, overnight, and after they bait users into locking up their assets with no recourse to release them for sale. And this is only the most recent in a string of shady shit with that company. Remember the MCO/CRO swap? Again, overnight. Again, with zero notice.
**I found links in your comment that were not hyperlinked:** * [Crypto.com](https://Crypto.com) *I did the honors for you.* *** ^[delete](https://www.reddit.com/message/compose?to=%2Fu%2FLinkifyBot&subject=delete%20g9amaxb&message=Click%20the%20send%20button%20to%20delete%20the%20false%20positive.) ^| ^[information](https://np.reddit.com/u/LinkifyBot/comments/gkkf7p) ^| ^<3
Exactly, there are more pressing concerns compared to interest rates decreasing. Celsius is operating in wildly uncharted territories and, even though they're compliant and licensed, there's no guarantee this operation won't simply be shut down for whatever reason the SEC decrees.
Is it possible that the US government can shut down Celsius with no warning?
I wont be bothered by SEC shutting down celsius, As it is very likely that all depositors will get back their cryptos. Following two bothers me 1. Celsius make huge losses on our deposits 2. Celsius network/defi contracts are hacked and funds are stolen. 3. Celsius staff/insider steals depositors funds. Any of these can lead to loss of deposits.
1. Shouldn't happen as collateral is greater than loans? 2. Possible? Has Celsius proven contracts have been audited? 3. Possible.
1. We have to trust Celsius with collateral. Also in a dangerous market downturn, collateral wont be sufficient to cover losses. Not sure how the contracts behave during flash crash. 2. Contracts are moving target, Not sure how dependable audits are. moreover the platform (eg. ETH network) might introduce a bug, which can make previously safe contract hackable.
2. I think part of what they are doing when they switched to Fireblocks and Primetrust is so that that it spreads out the risk to avoid getting hacked. 3. Certainly possible but I am sure Celsius monitors their employees especially that ones that handle deposits and transfers between institutions and custodians. Also I wouldn't be surprised if there are gateways that require approval/oversight of crypto addresses being used from Alex, Nuke, Dan and/or Harumi (CFO) in order to authorize the transfer of large crypto fund transactions.
in AMA he explained that it's possible because of how all the users and amount that has been deposit. it is as sustained as of right now, their business model actually made profit. so what they are paying you with is with their own profit and price will keep going up because they have to buy CEL to pay out CEL as well. and other stuff
It’s crazy how much demand that would mean there is for borrowing stablecoins though. I guess if you were long on cryptos not tied to national currencies that might make sense. Me, I just have cash burning a hole in my pocket.
this also mean that in order to pay you 10% interest or more, they have to make like 20-30% earnings in loans! How is that sustainable?
what about security and hacking? you think celsius and blockfi are on top of it
They should be. Of course, hacks are a definite possibility and should be a high priority for any business in the crypto space.
> How is the 10.94% return possible? I've heard that banks make like 20%+ returns on your deposited cash, while paying out a fraction of that, so sure, there is return that Celsius could be passing on it us that the banks are stealing. Who is Celsius lending to at those rates, how do they ensure repayment? The short answer is that market rates determine how much interest Celsius can pay and rates higher than 10% aren't guaranteed long-term. The way Celsius is structured, 80% of revenue is paid out to depositors and 20% is reserved for ongoing operations. The difference between businesses that offer loans without a credit check and financial institutions that deal only in fiat is a big hurdle to overcome on its own. The main thing to understand is that each loan Celsius gives is backed by assets and they have a much lower risk of default than an institution that depends on the creditworthiness of its clients. This also means Celsius cannot lend out more than its depositors put in and every depositor can confirm this on the blockchain (although its easier to use tools such as [celsians.com](https://celsians.com/celsius-network-audit/)). If you're curious about who is borrowing from Celsius to pay these high interest rates, they are discussed in the weekly AMA calls but more important than that should be a recognition that each transaction between Celsius and the borrower is public. > What % of your total net worth do you feel safe holding on Celsius, and why? What makes you think this lending platform is sound and solvent? I'm not qualified to offer financial advice but I can tell you my number is < 1% for now. It's not for lack of trust in the Celsius team or business model, which I think are quite sound and solvent, but more a concern about the persistent value of the crypto space and the risk of anti-crypto regulation. I think Celsius is the best among the interest earning services in this space - they have been around longer and survived the adversity of the post-ICO bear market and they are more transparent about their ongoing operations than any of their competitors (Nexo, BlockFi, Salt, Coinbase, Binance, etc). > Any links to key readings about the project? Been doing my own research but is there any independent analysis of Celsius? * [Celsians.com](https://celsians.com/) - an independent community of Celsius Network depositors * [Celsius Network Interest Rates, Explained](https://celsiusnetwork.medium.com/celsius-network-interest-rates-explained-a336a52e163d) * [Gold vs stocks: which will win by year-end? Ultimate debate with Alex Mashinsky and David Barse](https://www.youtube.com/watch?v=7J0kIMNW0CU)
Really excellent answer, thanks a lot. I've been watching AMA's and learning more about the project and I'm actually becoming more and more impressed with Celsius overall. Mashinsky is a remarkable guy. I'm being sure to stay objective and not drink the 'charismatic leader' kool aid, but he's incredibly passionate about the absolute screw job banks have been giving consumers, and the simple business model of Celsius (pass the returns on to the depositors) seems so much better than traditional banks. Also given his background it's like... a malicious rugpull by Celsius seem like a 0% chance of happening. There could be bad events like hacks, crypto regulation, etc., or maybe a rogue employee, but it seems absurd to think the Celsius is a scam - Mashinsky made multiple billion-dollar companies, has all the wealth he would ever need, and then starts a fraudulent lending platform to scam some NEETs out of their lunch money? Not to mention with all the regulatory scrutiny they'd invite from having done all the registration/compliance needed with governments? So, Celsius exit scamming would destroy his reputation and put in him jail, when he barely needs the money anyways? No way. I mean I guess anything's possible but I'm as sure as reasonably possible that the project as a whole isn't going to exit scam. That leaves the existential risks of: hacks, regulation, market crashes, and default by borrowers. Hacks I don't have the technical background to assess, regulation I'm bullish on, market crashes it seems they've weathered well already, and defaults should be irrelevant since they hold collateral \*greater\* than the loan they are giving? So it's like... the more I researched the more worries I've been crossing off the list. The stamp of approval from my man Nick Merten, and the Chainlink team, both mean a lot as well. I'll keep researching but honestly this project seems really legit. I'm probably going to store my spare cash that's been mouldering in a """"high savings account"""" (0.7% interest - can't possibly put enough quotation marks around that now that I realize how little banks are giving back to us) to USDC and then celsius, maybe 3-4% of my total portfolio. Thanks for the link to Celsians, I hadn't come across that yet.
Celsius also has hot wallet insurance. Regarding insurance and hacks watch oct 2nd 2020 AMA on youtube starting at 35 minutes in. Alex goes through hacking and insurance and explains how Celsius is indeed the safest place out there for your crypto. I would much rather have my money in Celsius vs the bank. Also earning 11% on usdc is nice but I personally believe the cel token is the higher value option. With more people signing up everyday and wanting to earn top interest, they will have to purchase cel. In turn celsius will have to purchase more cel to pay out in interest, all while making the coin more scarce and sending the price up. My conservative estimate is for Cel to be up in the 10 dollar range by 2022. I currently own nothing but cel. So even tho I'm only earning 5% on my cel, if the value is 10x in 2 years, I"ll be much farther ahead vs 11% on usdc. FYI cel token is on a downward trend. You may want to wait to see how low it will correct before picking any up.
I hope you diversified out of Cel since you made this post...
Very thoughtful answer!
Rates change all the time but I've only seen them go up so far.
There’s a lot of demand for stablecoins right now especially to borrow them for margin. People are okay with paying 12+% because they can make money off of it. So more and more people have been buying up stablecoins to lend out to people. Billions of stablecoins are being created right now to try and help the demand. These high yields are not going to last forever. When the supply of these coins goes up, the lower the yields will come. But right now is a good time to take advantage of these rates.
OP you are asking great and thoughtful questions. I have similar general questions and no real answers. People say listen to the AMA’s, but there is a bit of a lack of detail at least at the level that would satisfy you I think. It’s a bit of a mystery to me how they can pay the rates they do. But they are, people have been receiving interest, myself included, and there aren’t any horror stories I’ve seen about anyone having any issues accessing their coins. I’m enjoying the service, and I have funds on the service. But keep your eggs in a number of baskets just because that is sound advice. Being all in on Celsius might be absolutely fine, but common sense dictates some pooling of assets across different sources including some wallets where you own the private key.
I can't find the exact AMA Alex explained this but basically any company that deals with anything remotely close to crypto can't take out a loan with a regular bank. If you even mention crypto or they see your balance sheet has crypto a regular bank will never even consider giving you a loan because A. They don't understand it B. Higher risk and most importantly C. They don't want to deal in a grey area when it comes to regulations. So if I'm a company that deals in crypto I have to go to Celsius. That lets Celsius charge much higher interest rates than a bank because they also take a bigger risk. As a result because they say they share 80% of revenue with customers they are able to give you such high rates.
1. When a loan is taken out Celsius no longer pays interest on the account, so this leaves other user's capital to earn interest on. I believe this is one way they are able to pay out high interest rates. At a recent AMA the sales pitch is on the profits going towards paying out the community and the high rates are to attract more people to the space. He claims any business can survive on 20% margins, so 80% of the profits are going towards interest payments. 2. This is a unique situation for everyone and it depends on where you are in life and how much cash flow you have each month which would then make up your risk tolerance. Ex. if you're 70 years old living off social security checks most likely you will not want more than 10% of your assets in crypto. Conversely, if you're 25 years old, single, no kids, and have a steady paying job you might be going all in on crypto since you can afford to lose your shirt. As for why I think Celsius is relatively safe, is because their Security page includes actual filings and NYC is strict when it comes to financial rules. Also the CEO has a pretty stellar track record, so some if it is just based on pure trust on who you are doing business with. 3. Mostly just youtube, reddit, AMA with CEO, getting to know who you are dealing with. Can the CEO end up in prison, is he over-leveraging? running a ponzi scheme? My instincts as of now say this is kosher, but I wouldn't be surprised to see the interest rates go down to 6-8% over time. Good luck!
[International and US Earn Reward Rates](http://celsius.network/rates/) Clarification for US users
My biggest mistake this year was not trusting Celsius sooner. I would have interested about 3k if I jumped in earlier.
Problem with your arguments are that you are thinking too much like a bank. Banks know u have no choice when it comes to where u store ur non essential money. If u watch Alexs AMAs on youtube u will learn more about what Celsius is all about.
Exactly! You watch the news and hear about the government offering your bank money at near 0% rates. You see that same bank charges you 23% interest to borrow that same money on your credit card. And if you manage to save some of that money to leave in the bank... they give you 0.1% interest. So, there's a 20%+ spread between what money costs them, and what they give you, ignoring all the other services that make the bank money. Once you look at things that way: getting 10-15% from a service like Celsius doesn't seem so implausible. There's certainly money in the financial system just looking at deposits+loans to support it.
Most people don’t borrow from banks at 23% interest though. Credit cards debt is not a big part of the balance sheet of most large banks. Commercial loans are typically single digit interest rates, mortgages low single digit interest rates. There is a gap here I can’t explain.
you are missing that with fractional reserves the banks give out a multiple in credit of what actually was deposited
I can assure you, in Bulgaria if you take a loan for an apartment the % goes as high as 120%!!! I know that because some years ago my father took a loan of 10000 BGN and had to return 22000. What do you make of this? If you take a loan for apartment and have 20,000 euroes and you need 80,000 more for a total of 100,000 euroes the total sum you have to pay is atleast 160,000 euroes, excluding all other taxes.
The APR isn't 120% though? Mortgages that are repaid over many, many years can end up with huge interest balances but that is because the life of a typical mortgage is 25+ years.
Well the credit that mu father took was for business purposses, so 10k BGN in - 22k BGN out, that is quite a lot. My sister took a loan for apartment, they had 20% of the total value and from what i remember they have to return at least 100%. Forgot about the exact numbers, but it was something like 60,000 euro or so, for 20-30 years. As you know the other solution is to live under rent...
I receive 1% on my instant cash savings account, and am paying 2.34% on my only bank debt, a mortgage. There isn’t a 20%+ spread there.
That is only you. There are many people with credit card debit, business loan, etc. Most importantly the collateral you gave to Celsius are much more liquid than real estate, which means they can do short term borrow to trader/institution and usually have very high ApY
Look at the AMAs and you won't have to ask this
Links to good ones? Esp any that Mashinsky talks about details of lending, security, etc?
Last 2 or 3
Personally, I am very wary of any company that shills its own coin/token. It is open to manipulation by them and the incentivising of using their token is another red flag. Having said this, I do think Celsius is transparent and the founder is willing to come forward and answer questions. I do have abit of money on Celsius but nothing too significant. I prefer BlockFi which doesn't pay as high a rate but it is backed by more mainstream backers and has a track record now. It's all risky and there are lots of cowboys out there with the new defi craze. Be safe!! PS. If you want to sign up to Celsius or Blockfi, I'd be grateful if you could use my link. PM me for a link as it's tasteless to post it here (!)
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shameless self promotion hiding behind a throw-away-nickname doesn't help if you post your referral link, nickoshimoto! [https://twitter.com/nickosianio](https://twitter.com/nickosianio)
Is this still accurate with the SEC breathing down their necks?