My take on Celsius Network (Review)

Cryptocurrencies have been taking a very special place for a lot of investors. As of writing, BTC has also hit an all time high (ATH) of over $65k.

If you are new to crypto, check out my other post to get some basic understanding of how to look at them (Article here)

I came across Celsius Network a few times, but never paid much mind to it because of how small my crypto portfolio is. However, after my crypto portfolio became bigger, I took a better look at Celsius Network and found it intriguing.

So, what is Celsius Network?

*This is NOT a sponsored post and is based purely on my own research, experience and opinions

If you are here for the Celsius referral code, then look all the way to the bottom of this article for that!

---

Overview of Celsius Network

In my previous sharing about Understanding Cryptocurrencies, you would probably also notice a section about “Earning Interest” from Crypto. This is normally known as Staking. But for Celsius Network’s case, it is quite different.

Website – https://celsius.network/

Celsius Network was established in 2018 with the motto “Unbank Yourself” as they are very passionate about moving away from the banking system. They are focused solely in Cryptocurrencies, yet they are not a digital exchange. As of writing, you could not trade Cryptocurrencies on the platform, but the “Buy” option is available for selected Crypto using selected fiat currencies.

There are two main features under Celsius Network:

• Earn – Earning “rewards” by depositing your Crypto with Celsius
• Borrow – Take up loans by using your Crypto as a collateral

Sounds like what a bank offers to consumers? Yes, but with a very interesting twist.

EARN

They offer up to 17% annual percentage yield (APY) in rewards. An example of their reward rates:

• Stablecoins earn 8.88%,
• BTC earn 6.2% (up to 1BTC),
• ETH earn 5.35% (up to 100ETH).

No minimum balance, no lock in period, no fees, rewards automatically credited every Monday.

BORROW

I haven’t used this function before, but for those who are interested, they offer their users loan with rates of 1%, 6.95% and 8.95% depending on the Loan-to-Value (LTV) ratio of 25%, 33% and 50% respectively.

Their borrow function works by taking your Crypto deposit as collateral. This means that if you deposit 1BTC, at 25% LTV, you can borrow 0.25BTC with 1% annual percentage rate (APR).

Did I mention that it takes less than a day (as quick as 30 seconds) to approve your loan? No credit checks required as they take your deposits as collateral. Of course, your Crypto used as collateral will no longer “earn rewards” as long as your loan is outstanding.

Statistics

Some statistics as extracted from their website:

There are other platforms that offer similar services as Celsius Network: Blockfi, Nexo, etc

---

Some things to take note of

(1) Compliance (aka licenses)

Celsius has the following compliance/licenses/certifications as published on their website. As Celsius Network is a US company, it makes sense to have these with the US regulatory bodies, especially the US treasury.

(2) Security

There are a few things here to share on:

• Login options: They have your typical email and password login, together with the ease to login via Google, Facebook, Twitter and Apple ID. I’d suggest against using social media as a login mechanism.
• Biometric Authentication: Popular with a lot of smart devices now
• 2FA: We all should be familiar with how this works by now
• HODL Mode: When this mode is switched on, Celsius will give you a long random alphanumeric code. Your account will only accept deposit and restrict outbound transactions including withdrawals and send requests. To deactivate this mode, you will need to provide that code and there will be a 24-hour wait before the outbound features are restored. This allows you to have a window of 24 hours to rectify any security matters if your account has been compromised.
• Whitelist Address Security: To be able to withdraw your funds from Celsius to any other account, you will need to whitelist the address. The first time you input the address, it will require 24 hours before you are able to send/withdraw funds to that address. This means that if coupled with the HODL mode, any unauthorised access will require 48 hours to withdraw the funds from your account.

(3) Business Model

As published in their website on their Celsius Fly Wheel:

They also have published an extensive article about their business model here.

In short: Celsius accepts deposits from users > Celsius issue loans to corporates > Receives interests from said corporates > Distribute returns to users & lends to users at low rates > Repeat

(4) Gas Fees

Something worth mentioning in a section by itself is that all gas fees are absorbed by Celsius. Not sure if this will change in the future.

Gas fees are basically transaction fees that are usually incurred when withdrawing cryptocurrencies. That means if we transfer cryptocurrencies from (say) Luno to Celsius, we will incur a transaction fee and this varies depending on the cryptocurrency and platform involved.

However, Celsius covers all gas fees when withdrawing from Celsius, so that’s definitely a “yay”. The downside is that sometimes the withdrawal may take a bit longer than expected to process.

(5) Support

The general feedback from the community is that their customer service is bad, such as take long time to respond or never respond. I personally haven’t experienced this.

Having said that, they have a weekly AMA (ask me anything) session on Youtube with the CEO and co-founder every Friday, 1pm EST. Usually they will provide updates during that session and answer questions from the community, which I find quite interesting.

(6) Promo codes

If you are new and want to open an account with Celsius, PLEASE use the referral code so both your referrer and you will get $50 worth in BTC! Check out mine at the end of this article.

That aside, Celsius itself will have promo codes that they release from time to time to encourage more deposits from their users or new users. You may check it out in their website here. Take note that those with * means it is only applicable for new users. Please use the referral code and so that your referrer will benefit too if you are a new user.

However, for referral and promo codes, there will usually be a lock period of 30 – 60 days in order to get the promo amount rewarded into your account. So take note!

---

My Personal Experience with Celsius Network

I began my journey with Celsius Network in August 2021. The app’s look and feel is very simple and straightforward. Check it out below:

As for my experience:

1. I started with a referral code and deposited $400 worth of crypto. As it was my first time performing a withdrawal and transfer, I took time to carefully note the address and the chain used to transfer. This is very important as a mistake can cost the entire amount to vanish forever.
2. The $50 promo is instantly shown in the account as “locked”, which will only be credited once the lock period of 30 days has passed.
3. I switched on the security features as I intended the crypto that is deposited in Celsius to be HODL for long term.
4. Every Monday, a notification comes in that $xx reward has been earned. The timing of the reward pay out is different every week. So I learn to pay no attention to it.
5. Recently, I did a withdrawal from Celsius and it took a bit of time to reflect in my trading account. There was no gas fees. So transferring $100 = $100 reflected in the trading account.

That’s about it. Boring HODL mode which nets me rewards every week, and I earn a compounded interest on that weekly rewards too.

---

BTM’s verdict on Celsius Network

Celsius Network functions like a consumer bank in the crypto space, but with rates that we can’t (possibly) see in the banking system. I find it pretty revolutionary from the traditional banking system. The benefits of its Earn and Borrow is very clear.

How do they compare to other lending platforms like Blockfi and Nexo? There are other articles that cover these on the web and I don’t use the others so it won’t be discussed here.

On the other hand, crypto is still crypto and I am not one to “all in crypto” and exit the fiat system. There is still a degree of risk that comes with (1) Cryptocurrencies and (2) Celsius Network as a business. Our funds deposited with Celsius is not protected like how PIDM protects our funds in traditional banks.

There is also the case about liquidity. It takes sometime to withdraw if we have all the security function up and running.

I have a good amount deposited in Celsius Network, but not all my cryptocurrencies are in there. On top of that, the amount I have in crypto is, again, just a very small portion of my entire net worth. Most of it are still in traditional stock investment and fiat.

All in all, I think Celsius Network is worth considering a try for people who are HODL-ing their cryptocurrencies for the long term. Do your own research and probably worth sticking a toe in to try out first.

---