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Understanding Celsius Network: a review

TL;DR: You can get a summary of this article on its last section

The Celsius Network is a major decentralized finance application that offers Crypto savings and loans. The service is accessible via mobile applications for both [iOS] and [Android]. Support is available via ticket and email. Besides Crypto finance, the Celsius wallet offers a zero-fee payment product in CelPay.

I will divide this review into 5 sections covering the Celsius Network’s most salient features:

1. origin and team
2. potential
3. CEL token
4. Crypto savings & loan
5. summary.

Origin and Team

The Celsius project was conceived by Alex Mashinsky, a veteran hi-tech entrepreneur and inventor of the voice over internet protocol (VOIP), and cofounders S. Daniel Leon, an early-stage growth expert, and Nuke Goldstein, a software architect and AI specialist — both from Israel, where Mashinsky grew up. Celsius, after raising $50M in its ICO, has been backed with venture capital by, among others, [BnkToTheFuture] and [Tether][USDT]. The founding team still runs the company as CEO, COO, and CTO respectively.

Celsius Network, after its launch in March 2018, has grown to a team of 50+, distributed in offices in London, New York, New Jersey, Tel Aviv, and throughout the world. Starting with the Celsius wallet, and providing interest payments since August 2018, the Celsius Network now has $700M+ in assets under management, has originated $8B+ in loans, and is supported by $124k+ active wallets. Needless to say, the Celsius Network is one of the most successful DeFi applications in existence.

Potential

“The Internet was an application running on the Voice network (back then it was all dial-up)… and I said you don’t understand, the Internet is going to become so huge that the Voice network is going to become an application on the Internet… and today we are going through the same thing… the Blockchain and cryptocurrencies are the future of everything, that network is going to be 1,000 times bigger and more powerful than the Internet.” — Alex Mashinsky

Mashinsky refers to the Celsius Network as like going “from VOIP to MOIP”. Meaning, in a similar vein to how almost nobody 25 years ago believed calls would be free as an Internet app, no one is ready for the eventual growth of the Blockchain to absorb both existing financial systems and the Internet itself.

So what does MOIP look like according to the Celsius team? According to Mashinsky, banks who pay 1% APY to depositors and charge 30% APR to cardholders take 90–95% of the value in the system for themselves. Celsius, on the other hand, using Blockchain and AI, is capable of providing 80% of the value to depositors, which translates to savings with up to 9% APY and credit lines as low as 1% APR. Mashinsky believes this has the potential to bring to Crypto the next 100M users.

Applications like Celsius Network are but the beginning of the transformation of Blockchain. [Bitcoin][BTC] and [Ethereum][ETH] are already amongst the largest computing networks in the world. Mashinsky swears by the adage that the largest network eventually wins and that we see most advances in computing today are being driven by the demands of serving increasingly more apps and users in the public blockchains.

CEL token

The CEL token is an in=app utility for the Celsius Network. The relative amount of CEL in your Celsius wallet will determine your membership level and thus rewards you will get as bonus interest for savings as well as rate discounts for loans. There are other benefits like VIP service to those with high CEL ratios, CEL balances, and “HODL ratios” (defined as CEL balance / CEL withdrawals) on CEL.