Lol Celsius sounds too good that it was labeled as scammy! Hah! That's crypto disruption for ya. I'll take pride in that mod edit.
I've gotten so many of my co-workers on Celsius. Seriously, 10.5% interest rate on cash like it's a total no-brainer. I remember telling colleagues that Teslas were not only FASTER than ICE cars, but also SAFER as well...both due to being battery powered. Also mind blowing.
Celsius has a team that finds ways to generate yield with your crypto. They're involved in Bitcoin mining, DeFi, price arbitrages (i.e. GrayScale). As a depositor I benefit from all of that without having to actually learn/do it myself. I TRIED to do DeFi myself, but I'm not technical enough to understand smart contracts or understand cyber security risks. Having a centralized entity like Celsius put all their resources into doing that properly and just giving me yield from their efforts is a more than fair tradeoff.
What's crazy about the Celsius model is that the more money they give to depositors, the more profit they make. Here's the flow: the more people make in yield on Celsius -> the happier they are + spread it (like what I'm doing now) -> more people on platform holding their CEL token + crypto which Celsius can use to generate yield -> more revenue for Celsius the company.
It's a flywheel. Literally their whole goal is to give as much yield to customers as possible.
Fed up of receiving the raw end of the deal with your bank? Join me for a deep dive into Celsius Network who put the community first and are disrupting the traditional banking sector.
www.hasoforsoundmoney.com
Now sure, you can buy Bitcoin on Coinbase...but you're not earning yield on it. And Coinbase is capturing all the value when they IPO. We as depositors don't receive compensation for that.
With true crypto projects, a lot of the value is tied to their utility coins. And this goes beyond Celsius, but basically ALL the crypto projects. If you want other examples of this, look at the Luna ecosystem. I'm also a big fan of what they're building -
http://arringtonxrpcapital.com/wp-c...ecting_the_saver_walking_tall_with_anchor.pdf
Here's a good Youtube video on the topic -
Downsides? Well Celsius could get hacked. However, their whole business model is on loaning out / using their crypto to generate yield so they have <20% of crypto in storage at any given time. What if their clients default? Well to take a loan from Celsius companies/individuals have to over-collateralize their loans, which I referred to in my original post. So that serves as collateral + margin call mechanics. And Celsius has a wide array of entities it loans its coins out to, with no entity approaching close to 10% customer concentration and a limit on entire categories of yield. That's broad diversification of yield generation.
Compare that to BlockFi which many in crypto have speculated mainly generate yield through the GBTC premium arbitrage. Which...this was somewhat validated yesterday when BlockFi massively slashed their yield rates across the board on Bitcoin and Ethereum. Unfortunate, as I had several BTC in BlockFi
I'm deep in the rabbit hole y'all. Hahaha. It's incredibly intellectually fascinating, and the mechanics are so absurd that they get flagged for spam! LOL.
I will say...I've discovered a way to get 20% annual yield on US Dollars (via stablecoins). But I haven't done enough due diligence yet to feel confident enough to shill it here yet hahaha.
EDIT: I spent MONTHS researching Celsius. Compiled a lot of my research and put it here on this Google Docs -> -
What Is Celsius?