Ask Mashinsky Anything: January 22, 2020

Date: February 2, 2020 / Category: Blog



Hello to all the Celsians! This is my 3rd AMA and we received over 600 questions, which is great!

Before I get started with the announcements, we are still running our campaign to give to those affected by the Australian wildfires, by taking a loan with Celsius we will donate $100 to charities that are helping people recover from the devastating fires.

(1:18) First announcement — Loyalty Level Facelift

We raised the platinum earn in CEL bonus from 30% to 35%. We also raised the CEL holding requirements for the bonus levels. You need to hold enough CEL to equal 5%-10% of your total deposits to earn Silver tier, 10%-15% to earn gold tier, and 15%+ for the platinum tier. These changes are designed to boost CEL demand and we may continue to raise these levels next year.

(2:07) Second announcement — Earn up to 8.1% on BTC

We are raising the interest rate on your first BTC up to 8.1% earned in CEL for platinum tier members.

6% for regular tier, 6.6% for silver tier, 7.2% for gold tier, then 8.1% for the platinum tier. All rates are for in CEL interest on your first BTC.

(3:35 ) Third announcement — Korbit’s preferred wallet

We launched our business with Korbit, the largest exchange in Korea! We are now their preferred wallet and start with managing a portion of their treasury.

(4:22) Fourth announcement — Compounding interest is here!

As of February 1st, 2020 everything is compounding. EVERYTHING. All 25 coins and tokens. All members even the US. No matter if you earn in CEL or in kind.

(4:57) Fifth announcement — Borrow against EOS!

We just launched EOS backed loans, you can get a loan for as low as 3.75% if you pay in CEL.

1. (5:42) Jimmy asks, What new tokens or coins are you planning to support in 2020?

Alex: We have a list in the app of what is up next, we can only add coins that we can earn yield on.

2. (6:38) How can the interest rate go so low on the top 10 coins?

Alex: You have to look at interest on a scale, Bitcoin and stablecoins have an inverse relation. When Bitcoin borrowing goes up, stablecoin borrowing goes down. All rates are indicative of the current market behavior.

3. (8:23) PJ asks, what do you think the best way is to determine the fair market value of CEL?

Alex: CEL value is based on adoption. Right now we have about 38% of our users earning in CEL, and the HODL ratio (members holding their earned CEL) of 83% which is fantastic!

4. (9:41) How do you plan on driving new users to our platform?

Alex: We will continue to partner will amazing companies and offer our API and infrastructure to offer our services to their users. We are also going to utilize CELpay and our referral system.

5. (11:13 ) What are the future goals of Celsius?

Alex: Our goals remain the same, we want to give the global community a way to earn interest. Everybody needs to earn more money on their money.

6. (11:52) Zach asks, How large is the crypto lending market? Is there any risk of rates being diluted as AUM grows?

Alex: Currently we only lend in the crypto market, but we plan on earning yield from a variety of sources in other markets. We want to earn yield for our community in the best ways possible.

7. (12:40) Are you going to burn any CEL in 2020?

Alex: When we did the ICO we burned about 5,000,000 tokens. We have some tokens allocated to advisors, but if those do not get distributed, there is a chance we may burn a few million CEL.

8. (13:16) Will US members be getting a 1099 for 2019 tax purposes?

Alex: Yes, we partnered with a great company that will allow you to download all of your recorded interest income.

9. (13:53 )How do you think you can sustain this business model when banks can offer interest rates as low as 1%, if your borrowers are rejected from the banks will that cause a problem?

Alex: Banks are not your friends, banks earn 15%-17% on your deposits and only pay you 1% we earn high single digits and pay back at least 80% of it.

10. (15:24) How can you be charging 4% to borrow but pay 8% on Stablecoins?

Alex: When we issue a loan, we require 2x the Bitcoin as collateral, we use that extra Bitcoin to earn interest, enabling us to pay 8% on stable coins.

11. (16:38 ) How many years have you been in Tech?

Alex: I have spent over 35 years building circuits, networks, and 8 Tech StartUps! Im very comfy in this zone.

12. (17:44) Kendick asks, How long do we expect our competitors to maintain high-interest rates while not necessarily earning it?

Alex: It cannot last forever. Every time you make a deposit, you are deciding whether Celsius is successful, or our competitor is successful. Same with taking a loan, it’s the depositors that choose.

13. (19:22) Otto asks, Celsius is on the road to be #1 in DeFi, what other projects do you see making a large impact?

Alex: The crypto community needs to gain the trust of people by delivering results. There have been so many scam projects, they block out the great ones, we need to focus on building trust and bringing results.

14. (20:25) Can you explain where the 5% interest for the CEL token is generated?

Alex: We use Cel effectively as a treasurer, we hold several million tokens. Right now we use money from our earnings, but in the future, we plan to start using our treasure for payment. By holding CEL, you help us keep our cost of capital low, and pay our users more. All the people holding CEL are enabling us to grow much faster and more efficiently.

15. (21:30) Tom asks, What are your thoughts on integrating with hardware wallets?

Alex: I am a huge fan of hardware wallets, we are working on a number of integrations. We are also building a completely new way to do DeFi! Stay tuned.

16. (22:26 ) Tim asks, Will you have a gold-backed stablecoin?

Alex: Yes, it’s called PAXG and it’s pending to be added to our wallet right now.

17. (23:14 ) Do you have a timeline on when you will be able to offer your services in all states?

Alex: We are working on this, it’s not just states but countries as well! We are a company of only 65 people and using our resources as best we can. It’s very expensive and time-consuming adding new areas, but it’s a priority.

18. (24:23) Will you be listing on more exchanges soon?

Alex: Listings are very important, we have had to say no to several exchanges because they charge $500K or more. We are going to add them, but it will be on our terms when it makes sense financially.

19. (25:35) Mark asks, How can you prove you are not running a ponzi scheme?

Alex: We are going through an audit now, and will publish our results. We are also publishing a fund manager to prove we hold the assets we do. Transparency is a main focus for us. Celsius in on track to be profitable in march. To date, we have paid over $9 million to our community!

20. (28:24) A different Mark asks, What is the reason behind the loyalty program changes? What effect do you think this will have?

Alex: We want to drive demand for CEL. We want to reward the people who are supporting us most and voting with their wallet to earn the most.

21. (29:26 ) Is there any way to help those that are unable to join due to age restrictions?

Alex: If you are a parent you can open up an account and act on her behalf, legally we cannot support members under age 18.

22. (30:01) Could the Celsius wallet be sectioned into two parts? A HODL section and a spend section?

Alex: We are working on spending programs. Right now we are a HODLer community and are focusing on earning interest and paying the most to our community.

23. (31:06)Does Celsius work with concept level startups?

Alex: Right now we’re focused on growth, so unless you are providing a solution, we do not have the resources to partner with smaller companies.

24. (31:50) What advice do you have for a new person investing in crypto?

Alex: I think now is a great time to get in with the halving around the corner. Using an app called iBillionare, you can auto-invest small amounts each week.

25. (32:53) Harry asks, How can you convince someone to earn interest with Celsius when there is little to no regulation in the space?

Alex: The most important thing is we are acting in your best interest. Many projects in this space are master toll collectors, we do not charge fees, we structured this system to work for you the depositor.

26. (34:19) David asks, When will I be able to withdraw my interest first?

Alex: We have addressed this by introducing compound interest for every asset we support.

27. (35:49) What’s the risk of Celsius defaulting?’

Alex: We are a corporation and there is some level of risk, we need to be profitable, and to grow and make money. As long as you see deposits growing and us paying more, we will be a strong company.

28. (37:04) What is the ETA for a browser interface?

Alex: Currently we are not working on a browser interface, but we have partners that use us and provide you our service that offers a web interface.

29. (37:45 ) Dave asks, When will a debit/credit card be available?

Alex: I want to create a payment system that is far superior to credit cards, we are building a payment tool that is going to give you that “Wow” moment. We are working on these solutions now.

30. (39:10) Tony asks, When will we be able to buy stablecoins directly from the app?

Alex: Purchase from coins in-app with a credit card will be here by the end of February.

31. (39:37) Any plans to extend services to Africa?

Alex: We have huge plans in Africa! We have to wait to get approvals in those countries before we can begin.

(40:30 ) Another announcement

We have over 200 institutions transacting with us, more than anyone else! You need to ask the other guys where they are earning their money.

32. (41:30) Thomas is asking, How do loans work with high volatility?

Alex: All loans are dollar-based, there is never a case where you owe more than you borrowed. If you borrow $100 at 5% you will pay $105 back no matter the price of the collateral.

(46:18 ) — CMC update

We are working very close with CMC answering all of their questions. If listed today we would be around number 70–75 in the top 100!

33. (47:02 ) What is the status of our partnership with Uphold?

Alex: Uphold is a great company, I have been able to spend a lot of time with their team and CEO, we would really like to do a tight integration to support all of their currency capabilities.

34. (48:02) Do withdrawals affect your interest rate on deposits?

Alex: No, any withdrawals will not affect your interest rates. You earn exactly the same rates no matter how much you deposit, or how much you withdraw.

35. (49:42) What is Prime Trust and what do they do for Celsius?

Alex: They are an excellent custodian, a trust company in Nevada. We are using Prime Trust as our licensed custodian so we can roll out services in New York.

36. (50:54) What is your long term vision of this industry?

Alex: There are a couple of different ways this will play out, kind of a doomsday scenario where Bitcoin goes to $100K and all faith is lost in the dollar. The second path is interest for everybody because banks don’t pay interest, governments don’t pay interest, all of this is bad for you, we have a real opportunity to provide anyone in the world the chance to earn a fair rate of return on their money. There isn’t a single person on this planet that doesn’t want to earn more on their money, that’s what we are trying to do.

37. (53:06 ) Justin asks, what restricts Celsius from entering the healthcare space?

Alex: We cannot fix everything, today we are just working on your financial health.

38. (53:33) Sergio asks, Will you be expanding in Latin America?

Alex: Yes! We are looking for partners in every part of South America!

39. (54:09) Johnny asks, What are our key strategies for 2020 to get people to move away from banks and into Celsius?

Alex: It’s about building trust. We need to be transparent and build up people’s trust. We also need your help! Using the app and tools like CELpay can help Celsius grow and offer more interest to more members.

40. (58:14) Will we be able to borrow by using all of our crypto as collateral counted together?

Alex: Yes, we are working on multi-asset backed loans. We are bringing all kinds of magical features to the app.

(59:30) — Internship

If you are in New York or New Jersey and want to be an intern, come help us! We are looking for people to help us with all of this hard work!

41. (59:55) Will users be able to add a second person to their account?

Alex: The easiest thing to do is to open a second account with the other person KYC. Corporate accounts allow a little more flexibility.

42. (1:02:10 ) Don’t you expect the banks to attempt to destroy you?

Alex: They are trying! I say bad things about banks every day because they are stealing every one of us. Some of the largest investors in the world are becoming very worried about USD.

43. (1:03:20 ) What are your top three priorities for the whole of 2020?

Alex: We want to hit $1 Billion in AUM. We want to help create new highs in Bitcoin through our services. We will be continuing to add assets to the app, hopefully around 10 more by the end of the year. We want you to be able to buy CEL in the app, buy coins in the app, and many other things. More depositors, more users, more loans, more profitability, and pay record interest to our users, these are our goals!

About Celsius Network

Celsius Network is a democratized interest income and lending platform accessible via a mobile app. Built on the belief that financial services should only do what is in the best interests of the community, Celsius is a modern platform where membership provides access to curated financial services that are not available through traditional financial institutions. Crypto holders can earn interest by transferring their coins to their Celsius Wallet and borrow USD against their crypto collateral at interest rates as low as 4.95% APR.

Download the Celsius Network app and start earning interest on your crypto today ➡️

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