Celsius Network lets users earn interest on crypto and instantly borrow against it without any fees. As of the time of writing, the Celsius platform services over 450,000 users worldwide, and contains over $9 billion in assets. Celsius Network is an ERC20 based project with the CEL token, which was built to be the backbone of the Celsius Network, creating a value-driven lending and borrowing platform. The Celsius system is based on their native token CEL and they support over 30 cryptocurrencies on their platform.
What is CEL?
CEL is a utility token that’s deployed on the Celsius Network. For those who are unfamiliar with blockchain assets, they are basically another kind of digital currency that we have never seen before. They can be divided into four main categories: cryptocurrencies, decentralized applications, collectibles, and utility tokens. Due to the recent creation of CEL token, the Celsius platform has incorporated cryptocurrency as an instrument of loans and investments on their platform. Celsius is the first platform that will allow fiat currency (US dollars) to be used as collateral. For many years, cryptocurrencies have been devalued because of the centralization of mining and distribution of coins.
The Celsius Network
Celsius Network was founded in 2017 by Pascal Bouvier (CTO), Neil Rai (CEO), and Dylan Curran (Head of Product). The Celsius Network team originally began working on a reputation system for Bitcoin as early as 2011, but it took almost another two years before Pascal began work on the currency exchange system. “It was 2014 when I came up with the idea of Celsius,” Pascal tells me. “My inspiration for Celsius came from my work with the U.S. Federal Reserve in San Francisco.” The FIAT currency exchange system that Pascal wanted to build took a considerable amount of time to create. After the start of 2016, the Celsius team had spent over two years perfecting the system before launching the full-featured service in July 2017.
How does it work?
CEL token holders earn interest for lending their CEL and borrowing money from other Celsius Network users. Every CEL you have in your account counts as a loan or loan contract on the platform and is effectively a claim on the Celsius balance of other Celsius Network users. For example, if you have 25 CEL and lent 25 CEL, and then you choose to make a claim on a $100 loan, then your balance would be $0.25, and your CEL would be worth $0.25. The fact that the CEL you have in your account can be lent and taken back into your account is what allows CEL to be classified as money and the value of CEL as money is directly related to the degree to which other users are borrowing money from you.
Crypto lending solutions are becoming increasingly popular as they allow users to easily get access to crypto-denominated assets while also generating daily interest from their unused funds. However, traditional crypto lending platforms come with a lot of hurdles such as high fees, transfer costs, customer verification requirements, and delayed refunds. The digital asset exchange Bitmex faced a number of these issues and admitted that it failed due to its lack of features that allowed users to easily sell/borrow their coins without technical issues. Another company to face challenges with crypto lending is Mynt. The company took several months to add features and, as a result, had to refund investors.
Cryptocurrency users across the globe have already benefited significantly from the growth of the industry. Coinmarketcap has registered the daily volume of crypto exchange as 1.5 million BTC and it has been increasing since its debut. As of the time of writing, there are approximately 16.7 million active users on the platform, which makes the total value of digital assets over $5.6 trillion.