CELSIUS: Dominating the CeFI Market!

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Written by

Crypto Enthusiast

3 years ago

In community: Crypto Mindset(9c1c)

The crypto space has been buzzing with DeFI projects for a long time now. It started with the pioneer initiatives of Maker Dao, Compound followed by AAVE, dYdX and many more. Recently there was a mad rush in user interest thanks to the unbelievable returns offered by projects like Sushiswap which also led to launch of many similar projects in quick succession. The frenzy has calmed down to more normal levels now and people are more skeptical of the 1000% return offered by new projects. When people had started to believe that the DeFI craze was over Uniswap came up with the 400 UNI token airdrop which was worth more than $1,200 at the time of the drop. This made people come running back to DeFi and this led to another batch of new DeFI projects popping up every other day.

In this period of DeFI madness CeFI projects had taken the backseat but some of the projects had been silently gaining strength and the most prominent of them was Celsius and this article would be taking a closer look at what exactly is Celsius, how is it getting stronger with each passing week and how is it managing to beat it’s competitors like Nexo and BlockFi.

Why was I ignoring Celsius till now?

I had heard about Celsius quite a while back and a lot of people kept recommending me to try out the platform and highlighted the fact that the rate of return it was offering was way higher than any of the competitors. I still resisted trying out the platform as I strongly believe in “Not your keys, not your coins” philosophy and that was the key reason why despite trying out all popular DeFi platforms like Compound, AAVE, Uniswap, Maker, Synthetix, I never tried any CeFI option for a long time. I decided to atleast start researching about what these projects are, do they seem legit and genuine, are they backed by a team that can be trusted, does their operating model look sustainable in long term etc.

The most popular CeFI platforms these days are Nexo, Celsius, BlockFi and Crypto.com. From these options I decided to put on hold Crypto.com despite the fact that I have an account there and I have completed KYC. This is due to the fact that I found their staking terms of the native tokens too confusing and their biggest USP seem to be their card and the benefits you can get from it. This is not really an attractive option for me as I have never been a fan of cards. BlockFi seems to be offering much lower rates than Nexo and Celsius so I have not tried that so far.

Nexo Vs Celsius!

Now my choices were narrowed down to Nexo and Celsius. It was clearly evident that Celsius was offering much better rates than Nexo but I finally decided to transfer the unused crypto I had to Nexo. This was governed by the fact that Celsius is only supported by mobile device and they do not offer a website or portal where it can be used via a laptop. This was a big factor for me as I could not trust an app being solely on my mobile as it would create a single point of failure and I would always be concerned that if someday I lose my mobile will I also lose all the crypto I had on it.

When I started using Nexo I really liked their user interface and I did not bother about the 1-2% less return they were offering at that time compared to Celsius.

How I finally decided to try out Celsius!

When the Uniswap airdrop happened I converted half of the UNI tokens into DAI and was wondering whether to move it to AAVE or Nexo. Then I realized that why not try a new platform so my crypto is more spread out and I will have a lower risk in case of a future hack. I had recently bought a new mobile and I decided to install Celsius app in my old phone which I would not be carrying outside so no risk of losing it or getting it stolen.

Another factor that motivated me was that Celsius had a referral program running where you get $20 in BTC for storing $200 or more in your Celsius account. So I transferred the $200 DAI I had got by converting my UNI and moved it to Celsius. It did get some time getting used to the interface but now I am comfortable with it.

Is Celsius safe?

Just like Nexo, Celsius also uses third party companies for crypto custody and they have insurance for the crypto they store. There is a risk that once your crypto is lent out it will not be covered by the insurance however the fact that Celsius maintains a 150% collateral for loans mitigates the risk of lending.

Another reason why I feel safe using Celsius is that the CEO is Alex Mashinsky who has been working on high-end tech projects for more than 25 years now. He was part of the team that invented VOIP.

How is Celsius managing to offer such high rates of returns compared to it’s competitors?

The main reason Celsius is able to offer such good rates is that they pay the lenders 80% of the interest they earn back to the users. So if they earn 15% by lending crypto to institutions they pass 12% interest to the users. They are basically crypto aggregators who consolidate small crypto holdings of retail users and lend it out to big institutions. The crypto they have currently lent out is worth more than billions of dollars and have paid out more than 40 million dollars to it’s users in interest.

Why do I think Celsius is beating it’s competition out of the game?

I think a clear indication of how a project is doing is the performance of it’s native token which is governed by the demand it has in the market.

Looking at the performance of CEL and NEXO over the last 1 year we can see that while CEL has done more than a 50X it’s competitor NEXO is stagnant at the same level.

Have you tried Celsius?

If you still haven’t tried Celsius I would strongly recommend you to give it a shot and see if you like it. As with all crypto projects make sure you do a lot of research yourself before making a final decision.

If you do decide to try it out feel free to use my referral code which will give both of us $20 worth BTC.

Celsius Referral link - https://celsiusnetwork.app.link/119892d7cf

Referral code- 119892d7cf

Cheers,

SamBTC

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