Lending and borrowing are at the heart of global finance and a driving force for economies around the world. It has also entered the cryptocurrency world with a host of platforms offering cryptocurrency backed loans. Celsius Network is one of the leading providers of crypto lending and so we decided to do a review of the Celsius Network – a full review of their pros and cons, features, fees, etc.
So, to save you from reading a long intro, our magnifying glass is ready to zoom in on the Celsius network, so let’s go straight to it.
What is Celsius Network and who is behind the company?
Celsius Network was founded in 2017 and had an ICO success in 2018, where they raised $ 50 million by selling their native CEL token.
The raised New York-based startup is led by their CEO Alex Mashinsky and they claim that until May 2019, they exceeded $ 1.2 billion in coin loans. So to put it mildly, Celsius was successful unlike many other ICOs of 2017.
In narrow technical terms, Celsius is a platform and app that connects lenders and borrowers. You can send them your coins for loan and collect interest rates, or you can put your coins as collateral for a loan they will give you in USD.
Right now, Celsius is fighting with Blockfi and YouHodler for the top spot among cryptocurrency lending providers. You can check out our Blockfi review to learn more about them; as well as our YouHodler guide and review to learn more about this platform.
What products does Celsius Network offer?
Celsius currently offers 4 different products, but its core business is built around its 2 flagship products:
- crypto loans
- earn crypto (thanks to the loan)
The other two secondary features that you can use on Celsius are:
We will go through these 4 products, with a focus on the first two as they represent 99% of the Celsius brand.
Celsius Crypto Review – Loans
Celsius Network allows you to borrow cash against your crypto. You send them your coins as collateral, and they send you USD / stablecoins.
Loans start from $ 1,500 and there are 7 coins that can be used as collateral: BTC, ETH, LTC, BCH, XRP, DASH, and EOS.
What are LTVs on Celsius Network?
A loan to value ratio (LTV) represents the size of a loan you can take out compared to the value of the property securing the loan and is used to determine the risk level of a loan. A higher LTV ratio suggests higher risk, as the assets underlying the loan are less likely to repay the loan as the LTV ratio increases.
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Celsius offers three levels of LTV:
LTVs are lower than YouHodler’s (which allows LTVs of up to 90%).
What is the interest rate applied to loans from the Celsius network?
It depends on the LTV ratio and the length of the loan. In addition, the prices will depend on whether or not you choose to use the CEL token. By using it, you will benefit from a significant discount.
Rates start at 4.95% APR, if you go for the lowest LTC of 25%. The highest LTV of 50% will see the rate skyrocket to a high APR of 8.95%.
What loan conditions are available on Celsius Network?
You can choose between 4 different periods: from 6 months to 3 years. The good thing is that there are no penalties for closing and paying off the loan agreement early. You can also renew the loan as it nears expiration.
How to apply for a loan on Celsius Network?
The process is really simple and straightforward. You’ll need to download their app for Android or iOS and go through an intuitive loan creation process.
In short, you will need to enter information such as:
- the amount of the loan you want to take out
- do you want it to be paid in USD or stablecoins
- what rate you want to pay (depends on the LTV you choose)
- what loan period do you want
- connect your bank account
- review and confirm all loan conditions
- Decide if you want to lower your interest rates (up to 30%) using the Celsius Token (CEL).
Earn crypto on the Celsius network
It’s like a savings account in the bank. You put your money in, they use it to lend more and pay you an interest rate to let them do it.
Interest rates go up to 12% for some coins. Below is a complete overview of the coins that can be deposited into the Celsius Network and APY wallet that they will return:
What are the conditions for earning crypto on Celsius Network
- No minimum deposit – you can deposit as little as $ 5 and earn interest on it.
- No withdrawal or blocking fees – you can access your funds at any time without being charged or penalized for it. It’s like keeping them in a regular wallet (it won’t get you any money).
- Choosing to be paid in CEL tokens can earn you 35% more than if you do so in the currency you deposited in their wallet.
CelPay – no fees for sending and receiving crypto
CelPay is a service of Celsius Network that allows you to send and receive crypto for free. If the recipient is also using the Celsius app, you can send them cryptos instantly, just like you would text them.
If it isn’t, you can still do it, but the recipient will need to download the app to access these parts. It’s a smart way to market and use the app.
CEL is an in-app utility token that provides Celsius members with additional benefits such as better interest rates, priority status, community membership.
At present, it can be traded on the Liquid, HitBTC, Idex and Switcheo exchanges.
Is the Celsius network safe? Is Celsius Network a scam or not?
Celsius is a centralized service, which goes against the ethics of the basic idea of ââcryptocurrency. So that’s a minus.
What’s more, critics say this lending system masks the risks because borrowers don’t know which companies are involved in the remortgage, or the practice of financial institutions redistributing customer collateral for profit. So that’s another minus.
Celsius Network also does not have its own insurance for user funds that are kept in hot wallets, which is another downside for their pro and con sheet.
In the event that something happens to user funds (hack or member of a malicious team), Celsius claims that they will use their balance sheet to cover the damage. If the losses exceed their balance sheet, they will use the qualifying digital assets to absorb the remaining losses.
For larger amounts, which are kept in cold rooms, Celsius uses a safe and approved depository for user funds (coins sent as collateral or for interest purposes). Custodian is a household name in crypto circles – BitGo, which is insured to hold larger amounts of cryptocurrency funds. BitGo’s insurance covers digital assets held in cold storage up to an amount of $ 100 million. We have multiple cold wallets for each part we support and the insurance policy would apply to them.
On a personal level, users have the option of using 2FA authentication to protect their own accounts from hackers.
There have been no reported cases of loss of user funds or hacker attacks on the Celsius infrastructure, so this is also a plus.
Does Celsius require KYC?
Yes they do. They use a third party vendor for KYC called Onfido. Onfido is an established name in the KYC field that handles KYC applications for companies like Revolut, Orange, Couchsurfing and Bitstamp.
The documents needed for the verification process are standard and depending on the country of residence it will either be a passport, national ID or driver’s license.
Most KYC apps are approved almost instantly or within minutes.
Does Celsius do a credit check before approving the loan?
No, Celsius Network doesn’t care about your banking history, as you will stake your coins as collateral for the loan repayment. If you don’t, they’ll use those funds to settle the account.
Availability of the Celsius network – which countries are allowed on the network?
As with many other crypto services, local laws and regulations sometimes restrict citizens of certain countries from using otherwise international services like Celsius Network. No functionality of the Celsius network is available to users in (or who reside in) Cuba, North Korea, Sudan, Syria, Iran, Lebanon and other territories identified as involving compliance risks. students. The Celsius services are not intended for use by users (or residing in) Japan, New Zealand and Israel.
Celsius Network Review – Final Verdict
So, is Celsius Network a legitimate and safe place to get a crypto loan or should it be avoided as a scam?
It is definitely not a scam!
Celsius Network is a legitimate company with an impeccable history of operations so far. They offer attractive terms for both cohorts of people: those who need a loan or those who want to earn interest.
Especially if you improve these conditions with the use of their native CEL token which will give you 30% reduction and 35% higher earnings if you decide to use it as a medium of exchange (to pay or receive your interest).
CaptainAltcoin’s guest writers and posters may or may not have a vested interest in any of the projects and businesses mentioned. None of CaptainAltcoin’s content is investment advice or substitutes for advice from a certified financial planner. The opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com