Crypto interest accounts gained popularity by offering higher interest rates than traditional savings accounts, and platforms like Celsius became a top choice as it offers industry-leading APY. However, these products are distinctly riskier than savings accounts, as we’ll see below.
Editor’s note: Celsius halted all withdrawals, swaps, and transfers on June 13th, 2022. See the official Celsius blog post here for more information. We, CoinCentral, will do our best to keep all of our Celsius content updated as this situation-in-motion progresses.
What is Celsius Network?
Celsius Network is a crypto lending app available on Android and iOS devices.
Storing cryptocurrency funds in Celsius earns you interest on your holdings each week.
The premise is relatively simple:
- You deposit cryptocurrency into the Celsius app.
- The company then loans those funds out to retail and institutional borrowers.
- Every Monday, you receive a payment from the revenue that Celsius gains from those loans and other activities. The Celsius team boasts a return of 80% of company revenue to users.
The functionality of the app expands far beyond simple interest payments, though.
On the other side of lending, loans are available through Celsius, as well. By putting up cryptocurrency as collateral, you can take out cash (or stablecoin) loans at a range of different terms. Unlike most traditional loan services, Celsius loans don’t require a credit check and typically grant you an approval in minutes.
Although Celsius Network isn’t a wallet, per se, it includes the ability to send and receive supported cryptocurrency through CelPay. CelPay doesn’t charge any transaction fees and enables you to send crypto via a link, message, or directly in-app.
Is Celsius Network safe to use?
The company was founded in 2017 by Alex Mashinsky (CEO) and Daniel Leon (Founding President and COO). Mashinsky is notable for his work bringing cell phone service and free WiFi to the New York City subways, enabling WiFI on U.S. flights, and creating Voice over IP (VoIP). And Leon has had an accomplished career as a social entrepreneur, serving as a leader at several organizations, including Atlis Labs, Beyon3D, and GroundLink.
To date, Celsius Network supports over 101,000 users worldwide containing over $730 million in assets. Additionally, the platform has facilitated nearly $5.5 billion in loan originations (about $8.2 billion in today’s BTC prices). The company has made $12 million in interest payments,
As a custodial wallet platform, Celsius can and will hold onto your funds in emergencies. In June 2022, Celsius halted all withdrawals, leaving many users in an uncomfortable position. Time will tell how the company proceeds.
Can you make money with Celsius Network?
Celsius Network gives you the opportunity to earn passive income on your cryptocurrency holdings, but there are a few bits of information that you should be aware of.
The primary way to earn money with Celsius Network is by receiving interest payments on your holdings. To participate, you simply deposit cryptocurrency into a Celsius wallet. Once you’ve done that, you’ll earn interest payments to your wallet every Monday. You can choose whether you receive these payments in like-kind or in CEL (Celsius’s native token).
Beyond traditional crypto interest, Celsius Network also includes the opportunity to earn interest on gold. Rather than actual gold, though, Celsius utilizes XAUt, and ERC-20 token with gold backing.
The annual interest rates vary weekly as well as from coin to coin. However, they seem to generally be in the range of 3.00% to 11.00%. Additionally, choosing to receive your interest payments in CEL will net you a higher return. It should be noted that the “Earn in CEL” is not currently available to U.S. users.
An important warning: Currently, Celsius Network does not provide any insurance on your deposits. So if the company falls victim to a hack, for instance, there is a possibility that you will lose your funds.
Which cryptocurrencies are available on the platform?
Celsius Network pays out interest for a wide variety of cryptocurrencies. The options include (but aren’t limited to):
- Celsius Token (CEL)
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Bitcoin Cash (BCH)
- EOS (EOS)
- And many stablecoins.
You can also purchase BTC, ETH, XRP, BCH, LTC, and XLM directly in the app.
How is customer support?
The Celsius Network website contains a dedicated Help Center that should answer any questions you may have. It includes FAQs regarding deposits, withdrawals, and security, among several other topics.
If you can’t find what you’re looking for in the Help Center, you also have the option to submit a help request in which a Celsius representative will reach out to you via email.
Should you use Celsius Network?
In the end, the decision and responsibility to properly use Celsius Network are up to you, and you alone. Compared to other crypto loan platforms, Celsius offers some of the best interest rates in the industry – to both depositors and borrowers.
Any cryptocurrency holder stands to benefit from hearty interest rates, provided their principal amount is safe. Earning upwards of 11% on stablecoin deposits can be appealing for any investor, particularly in uncertain times.
Celsius is one of the most popular interest-bearing cryptocurrency accounts and lending platforms, a category with other players such as BlockFi.
Celsius technically holds your crypto keys and is missing traditional banking insurance fiat savings accounts enjoy. As seen by its June 2022 halting of consumer withdrawals, this makes for a particularly uncomfortable reality.
Editor’s note: We recommend not putting any funds into Celsius until this current fiasco clears things up.
Read the original article on Coin Central