What is Celsius Network? Celsius Network is a centralized entity with decentralized crypto services that allows users to deposit their crypto into the platform and receive a vast array of services, mostly related to lending their assets to receive fixed or flexible interest rates or taking loans with crypto as collateral - it is fully regulated by the SEC.

What is Celsius Network for? Also known as a fintech platform with crypto properties, the main focus of Celsius Network is to make crypto services seamless and fully regulated for users - such services being mostly lending and borrowing crypto.

What is the CEL token? The CEL token is part of a rewards mechanism for users to hold, stake and receive further benefits for having the token as part of their portfolio. The more CEL token you hold in your account, the higher your earning rates are for taking, loans, borrowing and more.

June 2022 controversy - Celsius shuts down operations and users can’t withdraw: On June 12th of 2022, due to intense crypto volatility throughout the market (BTC nosediving to 23k), Celsius Network announced that it was halting all transactions on the platform, including withdrawals, on the account that the market had become an unsafe environment for users to conduct transactions. At the time of writing there have been no updates on the matter, but it will certainly not please the SEC and has definitely been a massive inconvenience for its users.

How to buy CEL: Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Celsius or CEL to see what pairs are available to trade from.

How to store CEL: When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake CEL: Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking CEL. To stake Celsius, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Celsius staking options are currently available.

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Decentralization is undoubtedly one of the main perks of crypto; it boosts financial inclusion, makes processes more dynamic while also tapering bureaucracy in the meantime. It’s not all nice and easy, however, as the application of financial services into decentralized finance (DeFi) comes with several structural challenges - one of the main ones being anonymity.

With crypto enthusiasts preaching for the end of Know-your-customer measures (KYC) while regulatory agencies around the world pressure the need for thorough policies to protect investors, it seems like there is no middle ground. That’s precisely part of what Celsius Network seeks to solve; a place where users can take part in DeFi earnings and the crypto ecosystem through a centralized entity with its own crypto project.

With that in mind, this article discusses what Celsius Network is, its services, recent issues and the utility of the CEL token.

What is Celsius Network?

Source: Crush Crypto

Celsius Network is a centralized entity with decentralized crypto services that allows users to deposit their crypto into the platform and receive a vast array of services, mostly related to lending their assets to receive fixed or flexible interest rates or taking loans with crypto as collateral. What makes Celsius Network advantageous, mostly for US crypto users, is the fact that it’s completely regulated and compliant with the Securities Exchange Commission (SEC), therefore reducing a large portion of the risk sentiment found in users looking to dip their toes into DeFi properties.

The project was founded in March of 2017 by Alex Mashinsky and Daniel Leon in New York City, when the entrepreneurs and computer scientists drew up their plans to establish a lending platform, as the DeFi was starting to rise in the underground crypto communities. A year later, in March of 2018, Celsius Network had its Initial Coin Offering (ICO) while the project itself became active in August of the same year.

Almost four years since it was officially launched, Celsius Network now allegedly accounts with $11.8 billion crypto assets under management and over two million community members. Out of these near 12 billion dollars in assets, nearly 9 billion are in loans processed in peer-to-peer contracts between the users.

What is Celsius Network for?

Also known as a fintech platform with crypto properties, the main focus of Celsius Network is to make crypto services seamless for users - such services being mostly lending and borrowing crypto. May seem simple but there’s a strong reason for that in the United States. According to current regulations overseen by the SEC, there are no tax implications if you take out crypto loans or lend cryptocurrency in exchange for interest rates. The reason for that is the absence of the US dollar in the process. If you were either a) providing your US dollars as collateral for a loan or b) lending dollars to receive interest rates, both frameworks require taxing. With crypto-to-crypto, however, you are not converting your assets to fiat so there are no taxes involved.

Services in Celsius Network for retail users can be split into three categories: trading, lending/borrowing and staking. For trading, users are able to buy or sell crypto directly with US dollars or stablecoins, and also swap them instantly granted if there is enough liquidity available. Lending/borrowing is basically what has already been addressed; lend your crypto to earn interest or use your crypto assets as collateral to take out loans - which usually very around a 12% per year interest rate depending on which crypto you’re using as collateral and what crypto you want back for your loan (most prefer stablecoins like USDC). Staking is the simplest one, where you can withdraw your crypto anytime (allegedly, as we’ll address below) and earn higher rates depending on the time you wish to lock your assets.

What is the CEL token?

Launched in June of 2018 right before the network became active, the CEL token is part of a rewards mechanism for users to hold, stake and receive further benefits for having the token as part of their portfolio. The more CEL token you hold in your account, the higher your earning rates are for taking, loans, borrowing and more. For instance, if you hold 10,000 or more CEL tokens in your account, you get a 15% discount on loan interest rates. Hold 25,000 CEL, and that discount goes to 25%.

That’s also where the decentralized aspect of Celsius Network comes along; the community-built updates of the project. Celsius Network has a page on their platform called the Top 500 Hodlers, people with the most CEL tokens in their accounts. If you enter this list, you are now able to vote and suggest updates to the project, becoming an active member of the organization and a true stakeholder. As of June 2022, it takes roughly 53,000 CEL tokens to join the list - with the biggest holder having 40,800,000 CEL tokens.

June 2022 controversy - Celsius shuts down “due to volatility,” users can’t withdraw funds

Even though Celsius Network is fully regulated by the SEC, the project still comes with some issues that affect not only crypto platforms but financial ecosystems as a whole. On June 12th of 2022, due to intense crypto volatility throughout the market (BTC nosediving to 23k), Celsius Network announced that it was halting all transactions on the platform, including withdrawals, on the account that the market had become an unsafe environment for users to conduct transactions.

The most likely reality of the matter is this: Celsius lacks the necessary liquidity to pay off everyone that was withdrawing their assets, which brings a larger issue to the table for the organization itself and its users - can it be trusted? It’s still very early to tell what might come next for Celsius Network but, given that they’re proudly regulated by the SEC, the Commission is certainly not fond of this situation at all. In less than 24 hours after the announcement, the CEL token dropped nearly 53% at its lowest.

How to buy CEL

Fantom’s native token CEL can be purchased at Gate.io multi-services platform through several ways; from a cash deposit, crypto deposit, credit card and P2P trade.

Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Fantom or CEL to see what pairs are available to trade from - the most popular one being CEL/USDT.

If your account already has the proper funds to pair with the trade, you are ready to execute your order!

How to store CEL

When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake CEL

Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking CEL. To stake Fantom, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Fantom staking options are currently available - with new opportunities potentially added at any time. The same format applies to any other asset available on the platform. Browse around and see what investment options interest you!

Author: Gate.io Researcher: Victor Bastos

* This article represents only the views of the researcher and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.