Celsius: SEC Darling to Debt Abyss!
Celsius Network, launched in 2017, was a crypto lending platform that adhered to SEC regulations. It enabled users to borrow cryptocurrencies and earn revenue from deposits. The native CEL token facilitated transactions and rewarded liquidity. With $903.8 million in funding, it was a promising venture.
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Celsius Network is a stable and regulated lending resource that enables users to borrow in cryptocurrency or receive a percentage of the revenue from deposited assets. Notably, this is one of the few platforms that fully complies with SEC requirements, financial and regulatory policies adopted in the United States. Celsius Network also has a native CEL token with use cases ranging from conducting transactions to receiving rewards for providing liquidity.
Unfortunately, nothing is set in stone, as eventually happened to Celsius. The erroneous tokenomics concept and strategic mistakes led to the fact that Celsius Network ceased to be a solvent platform and lost the ability to pay off its debts to the participants.
Exaggerated promises of high yields from crypto deposits played a cruel joke on the lending platform, bringing the payout system into an unstable state. Celsius became a victim of their inflated expectations and statements that did not correspond to a truthful overview of things.
CEL Coin Utility
CEL is an ERC-20 token that fuels the entire Celsius Network ecosystem. The CEL asset is a multifunctional tool that allows users to receive additional rewards for providing liquidity, bearing loans, and driving transactions within the network.
In the meantime, the core utilities of CEL are paying rewards to Celsius Network subscribers and using the tools as collateral for crypto loans.
According to Coinmarketcap, CEL token key indicators as of June 16, 2023, are as follows:
- Token name: CEL
- CEL price: $0.1128
- Technology: ERC-20
- Fully diluted market cap: $77,422,262
- Market Cap: $27million
- Volume (24h): $1million
- Total supply: 695,658,160 CEL
- Circulating supply: 238,863,519.83 CEL
On June 13, 2022, Celsius declared a freeze on all exchanges and transactions of its native token. It was a forced move to stop CEL's even more drastic fall. As a result, platform users have witnessed a situation where the platform has officially admitted its insolvency and is on the verge of a large-scale collapse.
Celsius Network Origins
Celsius emerged in 2017 as the brainchild of Daniel Leon (as the Founding President and COO) and Alex Mashinsky (as the CEO), both influential figures in the tech and business spheres. Both founders have impressive expertise in creating and leading large technology projects, including VoIP, GroundLink, Atlis Labs, etc.
How Does Celsius Network Work?
Apprehending the structure and mechanism of Celsius is just a piece of cake. The bottom line is to bring together various crypto exchanges and users who want to operate crypto assets for multiple purposes. Ultimately, the Celsius Network included four main parties:
- Landers
- Borrowers
- Celsius platform
- External exchange markets
In the meantime, Celsius has primarily focused on risk management and providing recommendations for intranet trading fees.
Celsius Network Funding
Celsius has raised an impressive amount of investment through eight investment rounds. The network secured $903.8 million, while its most recent corporate investment round occurred on October 24, 2022.
Celsius Platform Roadmap
Even though the project almost suffered a crushing collapse, Celsius had a well-thought-out roadmap with long-term strategic plans for years to come:
- Q1-2018: MVP of wallet prototype | website goes live | Whitepaper V2 | Techpaper V2 | public crowd sale
- Q2 2018: Phase 1 of Celsius Wallet app | Expansion of Alt Coins
- Q3 2018: Phase 2 of the Celsius Wallet app
- Q4 2018: 3rd Party Microlender integration | Phase 3 of Celsius Wallet
- 2019: Multiple blockchain type nodes (top 20 coins) | Trading on multiple exchanges | Smart algorithms to manage risk | Integration with market trading tools | Implement Ethereum Plasma Proof-of-Stake distributions
Alas, fatal mistakes in the tokenomics of the project and constant loud statements led to the fact that the company ceased to stand by its own words.
Celsius Network Tokenomics
Here is how the tokenomics of the project looked at the time of the platform launch:
- Presale: 40%
- Crowdsale: 10%
- Treasury: 27%
- Team: 19%
- Partners: 2%
- Advisors: 2%
The team has reserved quite a large amount of CEL tokens for the presale. Most likely, the project owners wanted to monetize their concept as soon as possible. It was a bizarre decision, given the massive investment from eight large investors who believed in the company at the dawn of its existence.
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