Why Celsius might probably be the best crypto borrowing & lending platform to earn interest

This is not meant to be a comprehensive guide but is based on my personal thoughts and experience after using the app.

A few months ago, I was on an adventure to find a high yield savings account because every other bank (including a certain insurance savings plan account) was slashing their interest rates due to the pandemic and general macro conditions. However, we all know that a “high-yield” savings account in this day and age means a whooping 1.5-2% at best (The ones that don’t require you to deposit salary, pay insurance etc.) and that’s just unsustainable when inflation is averaging 2% in the long run.

While researching, I came across the concept of earning interest on stablecoins. Of course, earning yield on stablecoins should not substitute your current bank account for emergency funds on your entire savings account but the mechanics are highly similar. Although I do have to point out that this comes with a different set of risks. But hey, high-risk high returns, right? With that, let's dive into the selling points of Celsius! But do read on to the end as I touch on the risks and how you can start earning on Celsius.

1. Flat earning rate, no tiers or criteria to fulfill

Just deposit your stablecoins and start earning 8.88%^! Unlike Nexo where you would have to be at the platinum tier to earn 10% or Blockfi which limits the amount of crypto you can earn at a favourable rate, Celsius has no such limits or restrictions. Of course, should you choose to earn in CEL, you would be able to _earn up to 25% more in interest provided you have at least 25% in CEL tokens in your Celsius wallet. But that’s another story for another time. Also, while Celsius updates its rates on a weekly basis, their stablecoins rate has not changed in the past few months and that's another good sign to me.

^For most stablecoins at the time of writing.

Earning in native tokens has both its pros and cons. Pros being insane capital appreciation and cons being the corresponding volatility. However, since I am looking for more stability, I’m happy to stick with earning in kind (ie the respective stablecoin I deposited). All in, the main point of this is how Celsius makes it easy for you to earn without having to buy a certain amount of native tokens to earn a premium rate.

2. Occasional promo codes to take advantage of

This has got to be my favourite part of Celsius! Being a student, my capital isn’t large and the rewards from promo codes do go some way. Luckily Celsius often introduces promo codes along the way for various coins, including stablecoins.

I normally follow their Reddit and Twitter page to keep up to date with new promo codes being released. Best part? They stack. For example, they recently released some promo codes. I personally took advantage of the STABLE50 and STABLE10 which will pay me $60 worth of BTC when I deposit at least $250 USDC and hold for a month. That’s a solid 24% return right there, just by being a HODL-er and this is even before factoring in the 8.88% APY!

3. Weekly AMA and transparency

If you go onto Celsius’ Twitter page, you will be able to see this thing called #CelsiusByTheNumbers which shows you important information and how the company is doing on an aggregate level. An important metric to look out for would be net transfers and you would want to see it in the positive range.

Furthermore, Celsius has been holding regular AMA sessions, up to twice a month recently with the founder, Alex Mashinky. For those sessions, he will answer questions, give updates on the business, and take feedback into consideration. One example of how feedback has been implemented is the recent inclusion of Cardano (although I feel that has been motivated by market forces/demand as well).

So really, what's not to like about Celsius? But hold up, before you start dumping your money into Celsius to earn those juicy yields, let’s take a look at some of the risks to get a more comprehensive picture of what you will be getting into.

Risks and security

There are basically 2 main types of risk in my opinion: The company that you are putting your coins with and the token that you are using to earn on

Company risk:

-Risk of theft by malicious attacks or security breaches

-Irreversibility of transactions (please ensure you are transferring coins on the correct network, you will know which network to transfer on when you check the Celsius deposit address)

-Tokens are not insured whenever it is loaned out to Celsius’ borrowers (which is almost all the time). However, borrowers are required to post up to 150% collateral so that mitigates the risk of you losing all your coins even in a severe black swan event

Coin risk:

-Stablecoin de-pegging (ie the price of the stablecoin deviating sharply away from USD$1)

-Whether there is the amount of collateral that the stablecoin issuer says it has. On this point, I would say just avoid USDT due to their controversy

With that, I hope you now have a better idea of what Celsius is and what they do. If you are a new user, you will be able to get $50 in BTC by depositing $400 worth of crypto by using my promo code and holding it for 30 days. Don’t forget to take advantage of the current stablecoin and Cardano promo codes as well! Happy earning!

Links:

Celsius: https://celsiusnetwork.app.link/1679510a1f (Deposit $400 worth of crypto and get $50 in BTC)

Gemini: https://gemini.com/share/dyayaaesl (Buy $100 worth of crypto and get $10 in BTC)

Suggestion on how to get started (The way I do it)

1. Deposit USD into Gemini using DBS remit (pay for spread)
2. Buy GUSD (no fees)
3. Transfer to Celsius (no fees. 10 free withdrawals a month)
4. Start earning 8.88% APY! (Withdrawal back to Gemini is free as well)

Disclaimer:

As always, this is not meant to be financial advice and it is imperative that you do your own research. Earning yield on stablecoins is by no means risk-free and your entire capital is at risk. Please do your own due diligence (DYODD) before investing in any type of financial securities.

Additional links: (all figures in USD)

Celsius: Deposit $400 worth of applicable crypto and receive $50 in BTC

Blockfi: Deposit $100 worth of applicable crypto and receive $10 in BTC

Nexo: Deposit $100 worth of applicable crypto and receive $10 in BTC

Cake: Get $30 worth of DFI when you sign up and make a deposit of $50 or more

Coinbase: Make an initial trade of at least $100 and receive $10 in BTC

Gemini: Trade $100 worth of applicable crypto and receive $10 in BTC