Celsius And CEL Token: Lending, Borrowing, Should I Buy CEL - Everything You Need to Know
This podcast from the renowned YouTube channel InvestAnswer provided complete details about Celsius. It is the latest decentralized banking and financial system that was founded in 2018 by Alex Mashinsky. It is solely for crypto users and provides several services like loans, earning cryptocurrencies, staking, and much more. Let’s take a look at the topics that were discussed in the podcast:
The Most Popular CeFi Platforms and Their Tokens
The InvestAnswer’s host started the podcast with a brief intro about the entire video and mentioned that he will be answering some of the most commonly asked questions related to the Celsius network like how to you lend, how do you borrow, tax implications, CEL token, is it worth investing, and much more.
What It Does
The host presented the framework that Celsius follows which showed that CeFi platforms were distributed into 3 categories that are Offerings, Security, and Usability that are further divided into sub-categories.
The applications of Celsius were also discussed in bullet points. He explained that it is a crypto-financial service provider with the main purpose of lending and borrowing. It was launched in 2018 and offers rewards for depositing cryptocurrencies, including services like loans and wallet-style payments. It was further revealed that users receive payouts and interest in the form of crypto. Plus, the Celsius token that is widely regarded as CEL has several functions.
The host also promoted his Celsius referral code through which a user can get $50 by depositing $400. Next to that, he introduced the founder of Celsius Alex Mashinsky who has got 50 patents. Alex is also the founder of VoIP but his core mission behind establishing the Celsius network was that he wanted to build a simple and neutral banking system for everyone.
Ranking & How It Plays
The host showed the ranking of CEL tokens from coinmarketcap.com and stated that he will be reviewing each one of them as they have a great impact on today’s world.
Using Celsius to Borrow and Its Benefits
He explained the benefits of using Celsius to borrow. The host mentioned that if anything is borrowed against Bitcoin, then the crypto won’t be sold and the interest can be written off. Stable coins can be also borrowed and exchanged for dollars for real-world projects. The loan can be also used to hedge against downside risk from investment. He also explained the lending rates and what makes them different from traditional finance.
Using Celsius to Borrow and Its Benefits
InvestAnswer also provided details about using Celsius for lending and its benefits. There are several benefits like a user earning passive income on holdings, rewards, and benefits in the form of a CEL token. The reward rates on various cryptocurrencies were also explained to the viewers.
Taxes – How Are Crypto Loans Taxed
It was also revealed to the public that the crypto loan is not taxed at all which makes the decentralized finance system completely distinguished from the traditional finance system. The host also advised borrowing like 20-30% of the amount as 50% can easily get a user liquidated.
Disadvantages of Borrowing
The disadvantages of borrowing using Celsius were also discussed in which the host stated that a user has to make interest payments. The liquidation risk should be over collateralized which means you have to deposit twice the amount as collateral. Further, a user has to give up custody of the cryptocurrencies and the last disadvantage is regulatory risk.
Disadvantages of Lending
Next to borrowing, the disadvantages of lending were deliberately explained in bullet points. The host stated that a user has to pay taxes on the earned interest and give up custody of personal crypto on the platform. There’s the regulatory risk as well.
Lending and borrowing offerings were also explained by the host in-depth. When it was about lending offerings, he stated that the user crypto is rehypothecated, and crypto lending to earn is about 7-18% APY.
As for the borrowing offerings, the rates are as low as 1% APR that is offered for 6 months, 1 year, and 3-year terms.
Offerings – Reward Programs
Rewards are provided based on CEL tokens available on the user’s profile. The reward programs include a discount on loans and various tiers to access bonus interest rewards. Further, the bonus is provided in the form of a CEL token.
CEL Token Tokenomics
The host provided a detailed insight about the CEL Tokenomics that it has a max supply of 695.5M of which 50% is supplied to the public while the remaining 50% is distributed among the team, treasury, and partners. Plus, it’s a POS token.
When it is about Celsius’ security, counterparty risk should be considered because it rehypothecates the collateral funds. Further, it uses its party custodians and insurance providers to secure its assets. Additionally, loans are 150% collateralized.
Usability Is Like A Decentralized Lend Platform, No Paperwork
InvestAnswer also talked about the usability of Celsius that it’s a decentralized platform that doesn’t require any paperwork. However, knowing your customer (KYC) is essential to making an account. There’s also a user-friendly mobile app. In addition to that, Celsius doesn’t liquidate the collateral instantly as they always ask the users so that they can add the collateral and save their funds.
The risk which is the most important matter to consider was also explained. InvestAnswer stated that regulatory risk is a great risk for CeFi. Gary Gensler, The Chairman of the U.S. Securities and Exchange Commission also mentioned in a speech that it’s a risk that a lot of coins are unregistered of which the majority are ICO’s and IEO’s. However, the CEL token was distributed through ICO due to which it can’t be bought in the US.
CEL Token vs DAU & CEL Chart
The chart of daily active users and CEL token was shared which shows that price was below the number of total users which indicates that it is the perfect time to invest in CEL token. The TA also shows that is making a golden cross which is a good sign for investors to make an entry now.
The industry disruption of Celsius shows that banking is worth around 10 trillion Dollars, Crypto Exchanges about 1 trillion, Payments are worth 2 trillion and Equity Tokenization is around 89 trillion dollars. So, the total is 102 trillion which means that the market is huge.
The price predictions of CEL tokens from renowned platforms like Digital Coin, CryptoNewz, AVG, Walletinvestor, and others were shared which shows that it has the potential to increase its value by 120x in 2025.
IA Price Predictions
The InvestAnswer predicts the price by considering the circulating supply and the amount that will be released on the market. So, after the calculations, he was of the point that the CEL token has the potential to reach 14.99 Dollars by 2025.
According to InvestAnswer, the applications of Celsius is next to none as it has revolutionized the financial systems and the host truly trusts Alex Mashinsky. The CEL token can be also of great benefit if it is leveraged.