What is Celsius? (CEL)
The Beginner’s Guide
Celsius network is a regulated, SEC compliant, lending platform that enables users to receive interest on deposited cryptocurrencies or take out crypto collateralized loans.
Celsius hopes to attract users by returning high yields on their deposits while maintaining the benefits apparent in traditional outlets such as quick, fee-less transactions. For existing crypto investors wishing to take out a loan, Celsius provides an opportunity to receive dollars without cashing out of cryptocurrency holdings.
The system is based around their native token CEL, which is used to take loans, provide rewards, and make payments.
Further, Celsius implements a loyalty program where status is reflective of CELs value in the user’s portfolio. As a member progresses to each subsequent tier, they are given bonus rewards and discounts on loan interest.
For more regular updates from the Celsius Network team, you can bookmark the Celsius Network Blog, which includes weekly updates, new offerings, and explanatory articles.
Who Created Celsius?
Celsius Network于2017年在伦敦注册成立，由 Alex Mashinsky, S. Daniel Leon和Nuke Goldstein共同创立。值得注意的是， Mashinsky是一位成功的企业家和工程师，曾为VOIP 基金(网际网络语音协议)作出贡献，并自2000年以来成立了纽约十大风险投资公司中的兩家。
在2018年, Celsius推出了首次代币发行(ICO)，通过出售3.52亿个CEL (约占其总供应量的一半) 筹集了5000万美元的资金。
How Does Celsius Work?
The Celsius Network is composed of hosted accounts on Celsius and a variety of crypto exchanges intending to minimize the transfer of crypto-assets outside its system.
Ultimately, there are four key players within Celsius system:
- Lenders – Depositors who earn interest on their accounts holdings
- Borrowers – Margin traders who wish to take leveraged short or long positions
- Celsius Platform – Facilitates trades, manages risk, and determines trading fees
- External exchange markets – Executes trades and borrows/provides liquidity
To earn extra income using the Celsius network, participants deposit crypto assets on the platform and earn rewards on a number of cryptocurrencies, such as Bitcoin, Ethereum or USDC.
Celsius manages deposited funds in a ‘Lending Stake Pool,’ subsequently lent to external exchanges, and the interest received is distributed among the users.
To determine the distribution paid to lenders, Celsius uses a modified Proof-of-Stake (PoS) formula where the interest paid to lenders is a function of the funds deposited and the amount of days participating in Celsius’ consensus mechanism.
There are a few types of users who may wish to borrow through the Celsius platform.
- General Users – Users who deposit crypto on the Celsius Network and using the funds as collateral to receive a loan.
- Traders – Accredited investors (or SEC registered funds) who borrow capital from Celsius lending pools to trade. These accounts require a minimum balance of $10k to cover potential losses and fees that occur in certain trading activities.
- Exchanges – Institutions who borrow from Celsius lending pools should they need the added liquidity to settle trades.
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Why use CEL?
Users may find Celsius Network appealing if they wish to earn yield in the form of cryptocurrencies or if they wish to take trading positions with more than their account balance.
Investors may also seek to add CEL to their portfolios should they believe in the future of cryptocurrency lending platforms.