DeFi Decrypted: What the hell is CEL?
Interested in lending or borrowing crypto?
Now, it's time to take a look at Celsius Network, a crypto lending and wallet app that uses a centralized structure to operate the project.
What Is Celsius Network?
Founded in 2018 by CEO Alex Mashinsky and COO Daniel Leon, Celsius Network is a cryptocurrency solution that incorporates digital asset lending, borrowing, wallet, and instant payment services under a single ecosystem.
Interestingly, the project was co-founded by the same Mashinsky, who has been involved in multiple telecommunication initiatives and projects.
Examples of such include being the early developer of the Voice over Internet Protocol (VOIP) and installing wireless cellphones and free WiFi services in the NYC subway system (one of his companies was also offering free WiFi on US flights).
It's important to highlight that, unlike most DeFi projects where the community is responsible for maintaining the network, Celsius Network is managed by a company via a centralized model.
With that said, Celsius features a sleek, convenient, and beginner-friendly platform where users can access the following products via a mobile app:
- Crypto borrowing: Celsius allows users to borrow fiat currency or stablecoins against over 30 different coins. Interestingly, in addition to setting the terms and the amount, the project also enables users to customize the Loan to Value (LTV) rate to reduce the interests or the collateral needed for the loan.
- Digital asset lending: In addition to borrowing, Celsius users can also earn interest on the coins they lend on the platform. There is no minimum amount or time required to lock up cryptocurrencies in Celsius' lending product.
- Crypto wallet: All of Celsius' features are incorporated in the project's wallet application, which can be downloaded to iOS and Android.
- CelPay: Similarly to some fintech firms and neobanks, Celsius users can send and receive funds from other customers instantly and without fees. However, the difference here is that users can transact cryptocurrency instead of fiat assets. Interestingly, unlike standard crypto transactions, CelPay doesn't require clients to paste the recipient's wallet address (public key). Instead, users can utilize their phone contacts and initiate crypto transactions via a secure link or text.
What's interesting about Celsius is that the project distributes up to 80% of its revenue to users, which allows the company to increase its APRs for crypto lending.
What Is CEL and How Did it Perform in Terms of Price?
CEL is an Ethereum-based ERC-20 token, which serves as the native cryptocurrency of the Celsius Network.
CEL functions as a utility token with its main functions including:
- Increased interest rates when lending crypto on the platform and choosing to earn rewards in CEL tokens
- Decreased Annual Percentage Rates (APRs) when users borrow funds against their digital assets and pay back the interest in CEL
- In addition to consumers, Celsius' institutional clients can also select to pay back the interests of their loans in CEL to receive an up to 30% discount on APRs
- Celsius also has a rewards program, in which users can get bonuses and loan interest discounts based on the proportion of their CEL holdings to other tokens they hold
CEL has a total supply of nearly 696 million tokens, with 508 million coins circulating while the remaining 27% being locked.
Now let's see how the CEL price has been performing since the coin's launch.
After collecting $50 million during the project's token sale in March 2018, CEL hit exchanges in October with the price of $0.0567. Until the end of the year, the coin was only subject to minor market movements.
However, in 2019, CEL surged from $0.033 to $0.151 by December 31. But even after an over 350% increase, the token entered into an even more significant bull run in 2020.
After realizing a 168% growth between January 1 and September 8, CEL started an even more extreme uptrend in which the digital asset increased its value to $3.21 (as of December 23).
As a result, CEL generated a nearly 2,150% ROI for investors in 2020.
Trade CEL With AAX
With the goal to democratize banking solutions, Celsius Network provides users access to financial services, such as crypto lending, borrowing, and instant payments, via a sleek, easy-to-use smartphone application.
Simultaneously, the CEL token allows users to get bonus rewards, discounts on interest rates, and increased yields when lending and borrowing cryptocurrency.
Users can trade CEL and 40+ other coins on the institutional-grade digital asset exchange AAX, which leverages LSEG technology to facilitate low-cost and lightning-fast transactions on the platform.
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