Celsius (CEL) – All you need to know

What is Celsius?

Celsius is a cryptocurrency lending platform available to anyone with a mobile phone. It offers banking services like loans and savings accounts to individual users, and lends coins to big institutions looking to get a foothold in cryptocurrency. Its CEL token is like a rewards scheme, offering better rates of interest to those who hold it.

One of the big selling points of many decentralised finance platforms is that you can still use your coins even as they’re deposited to earn interest. Celsius is no different, and even expands that to offer loans in USD if you post enough crypto coins as collateral.

Celsius has been around since 2017, although it hasn’t all been plain sailing. It’s not always been clear about what it does with the deposits made on the platform, particularly about how much risk they take on to reinvest it and make money. Regardless, it’s distributed more than $8bn worth of loans so far.

How does Celsius work?

Celsius works by requiring all loans made through its platform to be ‘overcollateralised’. That means you have to post more collateral than the value of your loan. Celsius takes that deposit and reinvests it, earning interest which then allows them to pay such high rewards to people who use the platform.

This is where questions about those investments have come in. If they are particularly risky, then the entire platform is vulnerable to external forces like a collapse in the value of another cryptocurrency. Celsius has consistently denied they are exposed like that, but it is worth researching if you plan to use its services.

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