update 19 August 2021

A Guide to Celsius Network – Crypto Lending on Your Terms

If you are completely and utterly new to cryptocurrencies, you don’t have to engage in risky financial operations. On the contrary, you can put all your newly-bought assets in a wallet, sit back and watch it pay you back.

This simple but effective way of increasing your crypto portfolio passively is possible with Celsius Network. This platform allows you to earn interest by lending a fraction of your holdings to them. It’s a bit like traditional banking. Only here, you don’t pay any fees and get juicy bonuses and rewards for participation.

If you’re wondering how to use Celsius Network to earn money, you’ve come to the right place. Read on to discover how this innovative DeFi protocol works!

What is Celsius Network?

Celsius Network is a decentralized banking platform that offers a rich suite of financial services to cryptocurrency users.

Celsius users can lend and borrow blockchain assets like stablecoins but US Dollars as well. More so, they can earn up to 17% yield on the assets they stake on the platform.

The Celsius Network was launched in June 2018, and it fuels its operations with a native ERC-20 token, the CEL token. Participants can use CEL to:

  • Generate interest
  • Take out loans
  • Send peer-to-peer (P2P) payments
  • Pay and get paid with various cryptocurrencies

And, that’s not all! Celsius is slowly becoming one of the best-performing all-in-one banking solutions in the decentralized finance space. Proof of its ascent is the value of the CEL token, which increased in value by 600% since its release.

Who is Behind Celsius Network?

Celsius Network was co-founded by Alex Mashinsky, the inventor of the VoIP (Voice over Internet Protocol). His innovation was a technological breakthrough that, today, enables us to talk in real-time over the internet instead of over the telephone.

Today, Mashinsky is the CEO of Celsius, which he runs with its other co-founder, S. Daniel Leon. The latter is a business and social entrepreneur with a long history in building and growing successful organizations.

The two came up with the Celsius project in 2017 and released it a year later. They now have a large team of technical developers and advisors improving the platform and its services.

How Celsius Network Works

Celsius Network defines itself as the “wallet that pays you back.” However, behind this overly simplistic description, we find a complex staking mechanism that enables users to earn crypto-assets starting almost from scratch.

Staking on Celsius

The Celsius Network takes a unique approach to staking when compared to similar DeFi services. Firstly, it organizes users in four tiers depending on their loyalty. Then, it allocates different interest rates and bonus rewards to each tier, respectively. Thus, the more assets you stake, the highest the tier you’ll occupy, and subsequently, the earnings will be more substantial.

Here’s how the Celsius Network tiers work:

Bronze Tier

You can stake between 5 and 10% of your portfolio in CEL tokens in this entry-level tier. In return, you earn a 5% bonus reward from interest payments and a 5% discount on loan interest.

Silver Tier

If you stake between 10 and 15% of your portfolio in CEL tokens, you advance to the Silver Tier. As a result, you gain 10% bonus rewards and a 10% discount on loan interest.

In the silver tier, users are holding 10-15% of their portfolio in CEL tokens. This entitles them to 10% bonus rewards (interest payments) and a 10% discount on loan interest.

Gold Tier

Increase your stakes to anywhere between 15 and 20%, and you advance another level to the Gold Tier. Here, you get 20% bonus rewards and a 20% discount on loan interest.

Platinum Tier

The top-level in the Celsius staking system is the Platinum Tier. Only participants who stake between 20 and 100% of their portfolio in CEL tokens can access it. In return, they get 30% bonus rewards and a 20% discount on loan interest.

What are the Celsius Fees?

If you thought the staking tiers on Celsius are great, wait until you find out about the zero fees that you have to pay.

That’s right! On Celsius Network, you don’t have to pay any fee for deposits or withdrawals. Furthermore, the platform doesn’t tax you any origination, default, or early termination fees. So, you don’t have to worry about paying the lion’s share every time you move a finger on the network.

How to Earn Interest with Celsius

Celsius Network has a beginner-friendly modus operandi. In other words, you don’t have to be a crypto guru to earn interest on this platform. All you have to do is create a wallet and deposit several coins of your choice. Then, you start earning interest almost immediately.

Every week, you get a payment from Celsius representing the interest you made over the last seven days. And, if you want to withdraw your principal and the interest, you can do so at any time.

How to Get a Loan through Celsius Network

You don’t necessarily have to use Celsius Network for earning interest. You can also access this platform to get a loan in cryptocurrencies. This is possible if you have enough crypto assets to offer as collateral.

Additionally, Celsius practices insanely low interest rates. For instance, they take 1% APR for cash loans and only 0.7% APR for loans you take in CEL tokens.

What is CelPay?

Celsius Network has an expanding suite of financial tools. One of them is CelPay, a crypto payment app that you can use to send crypto to other people. The best part about it is that the receiver doesn’t necessarily have to own a crypto wallet.

When you send money with CelPay, you receive a unique link you can send to non-crypto users by email or SMS. When the receiver accesses it, he has to create a temporary wallet on Celsius and retrieve the sum. Senders can get up to 2% cashback if they use CEL tokens for payments. However, you can also send Bitcoin, Ethereum, and more than 30 other crypto assets.

What is Celsius Network Token (CEL)?

CEL is the native token of the Celsius Network platform, and it is an ERC-20 token running on the Ethereum network.

CEL was officially launched in June 2018 through an ICO that raised no less than $50 million. During the event, every token was valued at $0.30. However, soon after the sale ended, the price dropped by 90%.

Some of the CEL token uses include:

  • Staking
  • Earning interest
  • Loaning
  • Sending and receiving payments
  • Paying interest

At the time of this writing, CEL was trading for $6.16. There was a circulating supply of 238,863,519.83 CEL, and its market cap was estimated at $1,470,333,735.

You can buy CEL at crypto exchanges like Binance, MXC.COM, and Hotbit. Also, since it is an ERC-20 token, you can store it in crypto wallets compatible with Ethereum-based assets, such as Ledger Nano S and MetaMask.

How Safe is Celsius Network?

So far, you may say that the Celsius Network is one of the best DeFi protocols to date. And, you wouldn’t be far from the truth. However, like any other crypto project, Celsius has its downsides as well.

The biggest downside of using Celsius Network is that you entrust your assets to a custodial wallet. This type of crypto storage is one of the least secure ones because a third party controls your keys.

Now, this doesn’t mean that all custodial wallets are bad or even that Celsius would mismanage your account. Nevertheless, to access all its exciting services, you have to give up a generous slice of your control pie.

In terms of safety, Celsius aims to meet the highest standards of security in decentralized finance. In this regard, the company asked and received licensing from the U.S. Treasury Department’s FinCEN unit. In addition, the Securities and Exchange Commission in the U.S. Therefore, we can safely say that Celsius is not a shady project looking to run off with your keys and crypto-assets.

The Bottom Line – A Guide to Celsius Network

Celsius Network is one of the most promising lending/staking protocols to come out of the DeFi upheaval. It offers plenty of convenient tools for beginners who can earn some crypto at a stage where they don’t know the difference between coins and tokens.

Additionally, Celsius also helps experienced crypto users buy and borrow value in as many as thirty currencies. Finally, innovative payment apps and a future credit card complete a spectacular suite of new financial tools.

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If you are not a control freak, and you don’t mind earning interest on your assets while they stay in a custodial wallet, Celsius Network is for you!

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