Celsius Network logo

Celsius Network

ICO details

Token nameCelsius Degree Token
TickerCEL
StatusRunning ICO
Funding Cap$ 50,000,000
ICO startsMar 15, 2018
Token nameCelsius Degree Token
KYC/AMLNot Required

About

We believe the future of lending and borrowing will manifest itself in a P2P decentralized environment on the blockchain. In our view, traditional fina... Read more

Visit Website Read the whitepaper

Our Review of Celsius Network

Rating
80

P2P lending is a competitive market, however, Celsius appear to have differentiated themselves enough to lead in this space. Celsius Network increases the speed, accessibility and security of loans when compared to centralised alternatives, and has lower fees and better UX than crypto alternatives such as SALT and Ethlend. This is a well presented project with great branding, fair tokenomics, and a phenomenal founding team. Celsius demonstrates that you don’t need the most original idea to succeed, you just need one that is well executed.

  • Concept

    Concept Rating
    21 /30

    Celsius plan to offer a lending service that allows users to borrow against their cryptocurrency, and in-turn, will use that cryptocurrency to lend to traders who plan to initiate short positions. Long-term, Celsius also plan to implement features that allow members to lend cryptocurrency to the network and earn interest in the form of CEL. Celsius will offer interest rates of 7-9% to borrows and 5-9% to lenders. These rates are exceptional and vastly undercut blockchain alternatives and credit cards alike - whose rates range from 10-35% depending on the service - as well as offering far higher interest rates to lenders. 

    Celsius claim to be on the side of its members and aim to provide a service for the 99%, not the 1%. Given the team’s background in investment baking and deep Wall Street and VC connections, this appears somewhat disingenuous, however, Celsius have stated they plan to make the majority of their profits from institutional traders who, it is assumed, will be willing to pay higher fees given their limited options to short cryptocurrencies at significant volume. The project is also taking the security of users’ funds very seriously and will use bank-grade security to ensure members’ assets and data are safe - including multi-factor authentication, private-key double vaults, assets distributed across top exchanges, cold-wallet treasury, white-hat hackers and cyber security consultants.

    Celsius will generate revenue via a variable fee, based on the amount of interest charged in each borrowing transaction. Worth noting is Celsius’ not-for-profit model where earnings are used to cover costs and membership growth, as well as being distributed back to the member community by increasing the liquidity pool for loans. This is a strong concept with a fantastic team, however we are somewhat sceptical of the almost non-existent interest rate spreads and don’t believe they are sustainable long-term - Celsius expect to make profits from institutional investors, however, no evidence is offered to back up this assertion, and as more services targeting institutional investors become available, there is every chance Celsius will lose its pricing power and be forced to raise fees for individuals in order to remain profitable, losing their competitive advantage.

    In regards to the project’s Github repository, it appears to be mostly boilerplate code, with the real nuts and bolts yet to be assembles. Given that most activity is schedule for Q3 of 2018, this is not of major concern, however, it is worth noting that the team’s Github commits, to date, are less impressive than a cursory glance may suggest but we have seen a prototype of the HDGCtrl risk management platform for Celsius and it looks very impressive, which bodes well.

  • Team

    Team Rating
    23 /25

    This is an extremely strong team with experience in entrepreneurship, marketing, computer science, programming and finance, and is led by an all-star CEO - Alex Mashinsky has over 50 patents to his name, covering aspects of Smart Grid, Ad exchanges, Groupon, Twitter, Skype (he owns the original VoIP patent), App Store, and the Netflix streaming concept. He also founded Arbinet, a company that went public in 2004 at a valuation of $750M, and Transit Wireless, a company he sold for $1.2B in 2016. He has also founded and sold four other companies, has spoken at over 120 international conferences and currently runs his own VC fund. 

    The rest of the executive team is also impressive. The COO held CEO positions at several tech companies, the CTO held several tech leadership positions at Bloomberg, and the CMO was Head of Online and Mobile and Head of R&D at Travelex. The CFO was a Audit Manager at PWC and has held CFO positions at various tech companies, while the EVP of Engineering and Development was a founder and CTO at several companies. The VP of Sales was previously CMO and Director of Marketing at various tech companies.

    Leads in the Tech team have 12-20 years experience while other developers in the team have a minimum of three years experience. Members of the Core team have held leadership positions at Asia Times and Mastercard, and Risk Management team members have held Data Science roles in academia as well as at companies such as Accenture, World Bank, European Commission and NASDAQ.

    With 29 team members and seven advisors, this is a large and experienced team, led by a CEO who has one of the most impressive CVs in blockchain. As we see it, the only shortcoming is the team come from largely unknown tech companies so it is difficult to discern how impressive their experience truly is.

  • Competition

    Competition Rating
    15 /20

    The global P2P lending market is currently valued at ~100 billion and is expected to reach $1 trillion by 2025. Celsius will initially target crypto-backed loans but their vision is to become the global P2P lending platform.

    This is an extremely competitive market with multiple blockchain projects and centralised companies all competing directly. Centralised competitors include LendingClub, who employ 1,500 people and are worth $1.5 billion, and Prosper who employ 500 people and have raised nearly $420 million. These competitors aren’t focused on cryptocurrencies or on collateralised loans (though there is no reason why they couldn’t) preferring instead to offer traditional credit-check based fiat loans. 

    The advantages to crypto-collateralised loans are quicker processing times and world-wide availability as they are not dependent on credit information. They are also less risky for lenders as they can have the loan fully collateralised by the borrower rather than relying on past performance to predict default rates. Celsius will also offer much lower rates to individual borrows, and high rates to lenders as they plan to profit primarily from lending to institutional investors, however, it is unclear how sustainable this will be as competition enters the market.

    Decentralised competitors include SALT and Ethlend who raise $48 million and $17 million respectively, though we believe Celsius have significant advantages in this market. SALT restrict lenders to accredited investors and financial institutions, while Celsius will eventually allow anyone to become a lender, giving any user the opportunity to earn interest on their crypto-assets. This will vastly increase supply of loans and ultimately lower interest rate for borrowers. Ethlend also allows anyone to lend but its utility is hampered by its bad user experience - including the need to individually agree to terms between lender and borrower, as well as loans only being offered in ETH. Crucially, Celsius is also significantly cheaper for borrowers than both Ethlend and SALT, though as previously mentioned, it’s unclear how sustainable this may be in the long run.

    There are also a number of indirect competitors targeting slightly different loan markets, or using different loan mechanisms. Ziddu.com focuses on micro-lending for SMEs, against collateralised warehouse receipts, and has some promising initial traction. Sentinel, MicroMoney, Ripio, Banqu, Moeda, Sweetbridge, Everex and Lendex are also focused on improving availability of micro-loans to the unbanked. Projects among these, as well as Bloom, are also focused on improving the credit-checking process through blockchain technology and thus making credit history based loans more accessible. While there is room for both collateral-backed and credit history backed loans, the global demand for loans is finite and so they must be considered as competitors. 

    MakerDAO stablecoin has the potential to become a direct competitor for Celsius. MKR is offering crypto-collateralised loans in DAI, a stablecoin which is pegged to USD. MakerDAO also intend to offer loans collateralised by other assets and have a partnership with Digix which will provide gold-collateralised loans. This project is still in its infancy but it is very likely they will compete with Celsius for customers wanting to take out collateralised loans.

    Overall, this is an extremely competitive market but Celsius has some significant differentiators over both centralised and blockchain competitors, the only risk the project faces is the length of time to becoming a fully functional platform as the project is not expected to be fully implemented until 2019, allowing more nimble entrants to capture share of the market.

  • Economics

    Economics Rating
    12 /15

    The Celsius token (CEL) is an ERC-20 utility token and it will primarily be used to pay interest on coin deposits as well as fees for traders seeking to use the asset pool for short positions. A deposit of CEL will be required to use the platform and apply for crypto-backed dollar loans, and CEL can also be used to pay the interest on these loans at a discount. CEL will eventually also be used to lend cryptocurrencies in order to gain interest as well as achieving seniority on the platform, which will impact the interest rate gained. 

    Although this token model makes sense, if interest and fees are to be paid in CEL they must still be denominated in USD and dynamically calculated on a daily basis due to the possible volatility of CEL as a crypto-asset. It’s also worth noting that CEL is only used to pay interest and fees which will always be a small percentage of total transaction volume on the platform, this means the value of the token is likely to lag significantly behind the value of the actual platform.

    The total supply is 650 million with 40% going to presale, 10% to crowdsale, 27% to treasury, 19% to the team, 2% to partners and 2% to advisors. The presale token price was an average of $0.20 and the crowdsale price was $0.30. The crowdsale was successfully completed with Celsius reaching their hard cap of $50 million. Vesting is divided into three stages - the first will be unlocked six months after the crowdsale, the second occurring only if the token price reaches an average of $1.50 for ten days, and the third only if the average price remains at $3.00 for thirty days. Given the quality of the project, strength of the team and media buzz behind them, we predict this token will have significant liquidity once it hits exchanges.

  • Presence

    Presence Rating
    9 /10

    Visually and informationally, Celsius is excellent. The website and whitepaper are beautifully presented, well-written, and contain all relevant information in detail with the exception of technical specifications. 

    Celsius has generated huge buzz and received extensive media coverage from both traditional and crypto media including Forbes, Buzzfeed and BTCNews. Multiple high-profile crypto names have reviewed the ICO with almost unanimous positive feedback. There are also interviews with the likes of Gary Vaynerchuk, CNBC Africa and the honourable Ian Balina. 

    The CEO has spoken at many important conferences, participated in several reputable crypto podcasts and also produced videos and blogs further explaining different parts of the concept as well as hosting the project’s own podcast. All social channels have a respectable following and are regularly updated with relevant, well-written content. It is clear that a lot of thought has gone into creating Celsius.

Real Time Updates for Celsius Network

Similar Projects

Name Celsius Network Sofin Darico FintruX Network
Token Name Celsius Degree Token SOFIN Token Darico Coin Fintrux Token
ICO Start Date Mar 15, 2018 Jan 15, 2018 Jan 15, 2018 Feb 7, 2018
ICO End Date - Mar 15, 2018 Jul 15, 2018 Feb 28, 2018
Funding Goal - - - -
Funding Cap $ 50,000,000 $ 9,500,000 - ETH 25,000,000
Industry Banking, Trading & Investing Banking, Trading & Investing, Finance Trading & Investing Trading & Investing, Banking
Learn More Learn More Learn More Learn More