Episode 50: Crypto Banking with Celsius Network

Ben Lakoff, CFA
June 28, 2021
Listen to this episode on your favorite platform!

Today’s interview is with Zach Wildes of Celsius Network. Celsius burst onto the scene in 2018, and has grown quickly since.

Their tagline is ““The modern way to manage assets” and for retailers offers 4 main businesses, EARN, BORROW, CelPay… and soon, a credit card.

With Celsius EARN you’re able to deposit your crypto, earn a bit of interest. With Borrow, you use your crypto as collateral to pull out a loan CelPay – Venmo for crypto.

Enjoy this episode with Zach Wildes of Celsius Network!

Listen on your Platform of choice:

Check out for all the listening options (Spotify, Apple, etc.)

Show Notes

0:00:00   Welcome and context

0:03:15   What is your background?

0:04:20   How would you describe celsius to a non-crypto person?

0:06:05   What are the main divisions of Celsius?

0:08:00   What is the earn section of celsius like?

0:11:01   What are your borrowers using as collateral?

0:12:54   What happens when the market liquidity crunches?

0:15:00   What are the rates you currently offer?

0:16:40   How can you borrow against your crypto?

0:19:45   What can you tell us about the Celsius Credit Card?

0:21:40   What is the Cell Token?

0:24:00   Where are you operating from?

0:26:56   What are the biggest threats in your business?

0:29:56   Who are your biggest competitors?

0:31:50   How do you see Defi affecting Celsius?

0:34:20   Where can people find out more about you?

Show Links


Episode 47: Bitcoin Banking with BlockFi

Episode Transcript

Ben: [00:00:00] Welcome to the alt asset allocation podcast, exploring alternative investment opportunities available to the everyday investor. Here’s your host Ben Lakoff.

Hello and welcome to the all to asset allocation podcast. Today’s interview is with Zach Wildes of Celsius network. Celsius. Burst into the scene in 2018.

And it has grown very, very quickly since their tagline is the modern way to manage assets. And for retailers, they offer four main businesses. Earn, borrow, sell. And soon a credit card, a very unique, awesome credit card with Celsius. Earn you’re able to deposit your crypto and earn a bit of interest.

They’re doing this by lending it out to institutional borrowers, but you, the retailer are earning a bit of interest on your crypto. You’re being paid to huddle to hold. With borrow. You’re able to use your crypto as collateral and pull out a loan in dollars. You don’t even have to sell your crypto if you’re very bullish on it and you can still access a bit of capital.

It’s like a bit like a home equity line of credit. You can use your house as collateral and pull out the cash great and sell pay, which is basically Venmo for crypto and the credit card, which I mentioned, but it’s not out yet, but I’m excited. Being paid to huddle, Current as Celsius, earn not selling your crypto and accessing these dollars to make a purchase.

And these are very. Incentivizing interest rates, earning yield on your crypto via these borrowing Lindy platforms is nothing new, but Celsius is really making a splash in the market. I’d also recommend you checking out the episode with block fi, which although they may not see it that way is a key competitor to Celsius in this space.

Full disclosure is that Liz Robin is an investor in my company, charged particles. She was actually a part. Yeah. Of the Celsius founding team and I’ve used Celsius for a long time now, but thought it would be nice to disclose that before we jump into the episode, I wanted to take a second to thank you for all the great questions and feedback I’ve been getting you guys really, really rock.

If you’re getting some sort of value from this podcast or these YouTube videos, please drop me a line. Let me know. I really appreciate it. Or leave a review, give it a thumbs up, whatever you have to do. I also appreciate those things as well. All right. Celsius net network. Zach Wildes enjoy

Zach. Welcome to the show.

Excited to have you on.

Zach: [00:02:31] Thank you very much for having us.

Ben: [00:02:32] Absolutely. We were catching up before we started. Oddly enough, you know, I schedule out a bunch of these and I just kind of send out my Calendly and it’s flying around the ether quite literally. And today I ended up having interviews with you.

SAC of Celsius network and block fi, which is probably one of your key competitors in space. You get the second interview after all of these things are fresh in my mind, but a super big fan of Celsius and what you guys are doing for the space. Excited to have you on today. That’s for sure.

Zach: [00:03:03] No, we’re we take them on all the time, so no problem that, do it again.

Ben: [00:03:07] Awesome. I’d like to start off just with a little bit of your background and kind of introduce Celsius and what it is you guys.

Zach: [00:03:15] Yeah, absolutely. So Celsius is at its core, a community organization that exclusively acts in the best interest of its users. And that’s the fundamental philosophy of our entire company and everything that we do.

We’re not a third party that acts as an intermediary between institutions and crypto holders. We are a membership organization and we’re out there to hunt for yield and bring it. As much possible as back to our community, every single week, we pair users every Monday. And we made Monday the, the happiest day of the week instead of the saddest days.

That’s awesome.

Ben: [00:03:52] I love it. On your website, which I complimented before we started terrific job with the rebrand, all of the new colors and everything. I think it looks really good. You guys clearly put a lot of work into that. But one of the taglines I saw as the modern way to manage assets, which I really like.

How you describe Celsius to a non crypto, like everyday person, how you pitch it to them.

Zach: [00:04:17] Sure. I think the easiest way to understand it is we are like a crypto bank, right? We do financial services in the crypto industry. So you hold your coins with us and you earn yield. You can borrow against your coins.

You can pay. Within our system. And a bunch of other things are being developed, but we’re like a crypto bank except, or like the most anti-bank thing in our world. That’s that’s our motto is to not be a bank. So when you hold your assets with us, you’re generating positive yield each week in that asset.

So you hold Bitcoin, we pay you more Bitcoin, you hold the theories, come, you get more theories, or you can earn in our native tokens. And use that to boost your yield, reduce loan payments. It’s like our Costco card to get more benefits out of the, the Okay.

Ben: [00:05:06] Yeah. The kind of pillars or the business units of Celsius, it looks like there’s earned.

This is like the yeah. Interests account. I deposit Bitcoin, I’m learning little bits of Bitcoin each and every month or day, or whenever you pay it out. And then the borrow. Borrow, presumably is I send you a Bitcoin, say it’s $50,000, and then I can unlock the value of that. Use that as collateral and take twenty-five thousand dollars worth.

Credit against that. And then also on your website, it’s all sell pay. This is pay and get paid with crypto. And that it really, it like looks like Venmo. It’s really cool. Sleek. I need to download it and then gardening, but yeah. Why don’t we kind of break those? Is that accurate? Probably those like four or am I missing?

Zach: [00:05:52] Yes. Yes. So no, those are four primary. And so, yeah. Our main objective is to bring financial independence to a billion people. Right. So right now there’s we were the first to bring yield on crypto in crypto. There are a lot of other companies that tried or paying really high rates, or, you know, if you wanted to borrow money, it was very expensive.

But Celsius came in and said, if you have $1 Bitcoin or. $10 million in Bitcoin. You hold it with us. We’re going to pay you every week. Pro-rata the same rate. Doesn’t matter if you, the richest man in the world, or you just got $1. So that was like the fundamental part of our business. And then Bitcoin becoming a financial asset allows us to borrow against that.

And then. Allow the user to access that capital or those gains without creating a taxable event or without having to sell their assets. So they’re holding onto their crypto and then being able to spend that Fiat at very, very low rates, all of our rates. Single digits and even gets lower when you get the more collateral sell pay is a way to interact between members of Celsius without any on chain fees.

You can move money instantly very good onboarding tool. And it’s fantastic for people that are international or. Have banking systems that maybe don’t work like today. Like how fed? I mean, it was down, it’s crazy. Right. They create money, but they can’t keep their own system up. We don’t go down like that.

Right. You can always transfer money within our school.

Ben: [00:07:27] Yeah, that’s awesome. And what would better value prop than think using that right now? It’s insane. I want to jump into each of these in a little bit more detail in how they how they work. Walk me through the earn division or section of the business and how that works.

Exactly. I’m depositing Bitcoin. I’m earning interest in Bitcoin. Where’s that interest being generated from what, which customers users know about that.

Zach: [00:07:56] Sure. So we make it as simple as possible. Right. All you have to do is create an account and then transfer your assets to the Celsius wallet. From there, it’s completely hands off when it comes to earning yield.

You, as the member are natively long that Bitcoin that you’re holding and other institutions want to do market-making or shorted or hedge, or do whatever. And we say, okay, well you can come to us. We’re going to lend you that Bitcoin take collateral to protect the asset and then charge a rate of interest that we’re going to pay up to 80% back to our community, right?

That person that’s long that Bitcoin, that they don’t care if it goes up down left, right. Or whatever. But that institution is going to pay a fee in order to borrow that. So that’s the majority of where the interest income comes from. And then we also do retail loans, but that’s not where the majority of this money comes from.

We’re really sucking value from institutions and bringing it to the little guy

Ben: [00:08:59] mean the institutions are paying interest on. If I’m an institution I’m borrowing Bitcoin are you guys making a positive spread or is this like a loss. You’d probably make a positive spread, right?

Zach: [00:09:11] No, no, no. They’re, they’re just borrowing that crypto because they want to do market making.

So let’s say there’s a price difference between the Japanese exchanges and the American exchanges. They’re going to borrow those coins. So they’re not taking any risk on the up or downside because if they borrow one Bitcoin, they’re going to have to return one Bitcoin. So they borrow that Bitcoin, they do their market making, and then they return that.

Plus interest, and then we return the collateral. So for us, it’s strictly collecting fees from institutions that want to borrow from our member base and something that has given us such a huge advantage is the no, sorry. The larger we get the, the larger institutions we can service and the more business we can do and the higher price we can command for those assets.

Right. If we’re only a hundred million dollar institution, Then only smaller hedge funds or smaller guys can come and borrow from us, but we’re at 10 billion, we’ll be at a hundred billion or a trillion. Then you can have the largest money managers in the world say, Hey, I need $500 million in Bitcoin.

Right now we give them a rate. We can command that rate and then our users are earning a massive amount.

Ben: [00:10:27] Gotcha. And so those, those borrowers, what are they, what are they using as collateral when they’re borrowing that Bitcoin? And then the question was more like, so they’re paying 8% to borrow that Bitcoin and you’re paying 7% to the, the users that are, that are, you know, effectively lending it to them.

But what is the kind of mix of borrowers, institutional borrowers, and what sort of collateral they’re using to to put up, to borrow that Bitcoin?

Zach: [00:10:57] Sure. For the borrowers there’s exchanges, there’s hedge funds, there’s family offices. It’s all people that apply with us. We look at their balance sheet.

We do very thorough bit. And then if we do choose to do business with them, because they look like a stable company, we allow them to interact with our platform and then collateral can be a number of things. It can be cash, it can be stable coins, it can be Ethereum or Bitcoin or some of the more major assets that have a little larger reputation.

But we just, the loans are very safe because at the end of the day, we’re doing securities line. When we have that collateral in case the loan goes bad or something happens, which all these institutions are very well reputable. And we don’t have any issues there, but just in case, right, we have that collateral to liquidate in order to protect the user.

It’s all about protecting the user’s assets. The last thing we can do at the end of the day is allow our users to lose any money whatsoever, where we’re going to pay them every Monday. We’re never going to let them lose.

Ben: [00:11:58] Yeah, that’s awesome. Not that it does seem very user centric, all of your messaging and everything.

I know that’s, that’s really great. And I’m curious, in March of 2020, we had that massive drawdown where Bitcoin ended up touching, like, you know, 4,035. Box or whatever.  Of the number of like liquidations and how everything worked, because that was a very trying test on, on how these margin calls work and like where people just walk me through kind of what happened and any sort of blow ups and what, what, what happened as a result of that?

Zach: [00:12:33] Sure. Sure. So like on that March, I think it was March 16th. We had a massive liquidity crunch in like every market stocks, gold crypto, everything was getting hammered because people were selling they’re panicking. They want a dollars and it caused a cascade of liquidations all over the world. Right. And so on our end, what happened was we.

Started getting calling users or early ahead of the time so we could get more collateral. So their loans wouldn’t get margin called when the prices did get lower, you had to contact user to say, Hey, things are getting crazy. We need you to add collateral. Or we’re going to have to liquidate your loan.

And at the end of the day, we didn’t have to liquidate anybody. Our prevention was really on point and I think maybe a week later there are people that just didn’t want to pay back their loan. They said, go ahead and take the collateral. So there are a handful of users that chose to after the event, but through really good preparation and risk management, we did not have to liquidate anybody.

And that is really when Celsius stood out the most, because the last thing someone wants to do is get liquidated. And we had a lot of competitors that just stole their coins and not only liquidated them, but charge massive fees for doing so. So, and, and they sold all their coins at extremely cheap prices.

So I can’t imagine if those people would have still had their coins collateral today. They’d be worth 20 times. So, I mean, Yeah.

Ben: [00:14:00] Yeah, it’s true. The earn account this totally makes sense. What sort of rates, what sort of tokens are offering? You guys offer a lot and the rates vary, but you know, what kind of ranges and what’s kind of the elevator pitch for the ones that you offer.

Zach: [00:14:18] Sure. I mean, we’re quite agnostic. We want to support as many assets as we can because we, it doesn’t matter if it’s ADA or polka dot or have, or Bitcoin or whatever. We just want to be able to earn on those assets. And if we can do that, we can pay more and more people, more and more income. So rates are all based on market demand, and that’s why we update them each week.

We never promised to pay anything that we can’t. Bitcoin has historically been between three and 7%. Kind of same with Eve then and the other major alts. Some staking coins, like MADEC have extremely high rates at 18 or 22%. And then stable coins have also been historically very high 7, 8, 9.

And right now they’re 12 and a half. So we pay, I mean, cause we’re paying 80%. We pay the highest rates in the industry and if you compare it to everyone else, nobody pays more than Celsius. Right now we’re paying $7 million plus a week in rewards to our users. So like every Monday is a celebration.

It’s it’s fantastic. And I think to date, we’re up to 350 million in total. Paid rewards, which is made $350 million is a lot of money to a lot of people. So that’s what we really pride ourselves on. How much are we paying the community each week? It doesn’t matter. Anything else. As long as we’re paying the community more and more.

Ben: [00:15:40] That’s awesome. Really, really cool. Then the borrow feature, so this is using my crypto as collateral. Walk me through that product. What else? Sorts of types of collateral I can use. What kind of loan to value? What kind of rates? Costs fees whatever’s relevant.

Zach: [00:15:57] Sure. So let’s say you bought Bitcoin at a thousand dollars, right?

And you made a great financial decision. You held it all this time and now you have a million dollars worth of Bitcoin. And what can you do? Right. If you sell it and now you got to give up some of your coins to access that capital, you’re going to pay taxes. This is where a crypto backed loan becomes a very, very savvy move.

You can borrow up to 50% of that million dollars worth of Bitcoin. Non-taxable event in most areas and spend that cash. However you. Those loans are at 8% right now. And they’re only a percent on what you’ve borrowed. There’s no repayment of the principle. When you want to return those borrowed funds, you return the funds and we release your Bitcoin as collateral.

So you get to keep that coin and enjoy life right at the same time. And the name of the game is to not sell your assets. Right? You want those assets to turn. Now where it gets even more beneficial is let’s say that Bitcoin continues to appreciate as it has right over time. We’re going to do, what’s called a reverse collateral call.

I’m sorry. Reverse margin call. Where we’re going to say, oh, you know now your Bitcoin is worth 2 million. Okay. Not 1 million. So I can give you half your Bitcoin back and your loan is still collateralized 50% LTV. So now you’re earning on that Bitcoin again. And you have that loan out. So it’s a, win-win across the board.

If you’re, if you need liquidity, it’s a fantastic tool. And you, you, you know, people don’t want to let go of their Bitcoin. It’s gone from almost worthless to 50,000 plus borrowing against your coins can be very advantageous to people, especially long-term. That loan will tend to depreciate in value because it’s denominated in dollars, but your crypto will appreciate, and you can come out huge on top, but people use loans for everything, right?

Yeah. Maybe, maybe they can’t, they need to pay off their credit card or maybe they want to buy a house or maybe, you know, there’s a car that they’ve always dreamed of. You can use a loan for anything, but the, the power of being able to borrow against that asset and then pay an extremely low interest. As low as 1%, if you do four to one collateral amazing financial pool.

Ben: [00:18:13] Yeah, I completely agreed. Is it also possible to refinance so that Bitcoin goes to 2 million instead? I can actually take an extra 500 K of loan and to keep it at the 50% collateral.

Zach: [00:18:26] Yes. Yeah. Once that collateral gets unlocked you could use it however you want. If you want to withdraw it, you want to earn interest or you want.

Borrow even more dollars against that. Absolutely. Those are your coins. You can do whatever. Yeah.

Ben: [00:18:38] Cool. And then, then the next one sell pay. I think that’s pretty self-explanatory. But also something that you guys have been talking quite a bit about is a credit card. And I mean, I listened to a little bit of the like livestream, you know, this is going to be a very unique offering and unlike a lot of other ones.

So are you able to share some of the details about the credit card?

Zach: [00:19:01] The name of the game for us is to create a credit card that doesn’t screw over its company or its its user. So right now they use credit cards to capture a bunch of people, gamble, to pay an annual fee or get them to pay a 25% interest rate.

Like it’s a, it’s a moneymaking device. And what we want to do is. Kind of have the credit card, be a way to access liquidity without having to sell your tokens. Okay. And almost like in using our loan system, but bringing it to a card and then be able to offer very attractive rewards and do kinds of things like that.

So it’s all about providing. The tools that our users want, and they want to be able to spend some of their coins, but we want to do that in a very responsible way that they’re not paying exorbitant credit card fees or hurting themselves financially longterm. We want to offer something that doesn’t charge you a $200 annual fee and gives you 1% back, right?

Because 99.9% of people, they’re just going to be. Spending money on fees and we’re, we’re very anti fee. We do not do fees and it is not our thing. So that’s the name of the game. Create this financial tool, have it pay rewards and allow you to keep your assets without having to sell them. Okay.

Ben: [00:20:18] Makes sense.

And then it, wouldn’t kind of round out all of this without touching on the cell token. You have a utility token that’s integrated in with a number of the different products. How does this work tell me a little bit more.

Zach: [00:20:32] Yeah, cell token is our utility token that gives our members kind of premium access to what we have.

It allows you to pay less on loans. So you get a reduced rate on loans. If you hold enough, sell if you earn in cell outside of the U S you can earn up to 25% higher rates. So you can say, no, I don’t want Bitcoin. I want cell token. We’re going to pay you even more rewards every Monday off. And then there’s also fringe benefits that we’re working on to our top holders.

We’re going to have events, we’re going to have meet. We’re going to have things that the people that are really supporting our community and that’s what it is a community token. We will be able to give back extra to them because they supported in us. And we use the token as a fundraising mechanism.

In the early days, we sold a $50 million worth of stuff. Ha that was half of the total supply that went out to the community and that got us started. We built what we said we were going to build. And now that cell token has appreciated massively. Right? And so being a fixed supply asset, the more we grow and the better we do the more the buybacks happened to pay that interest.

The more, the value, you know, we’ll tend to appreciate in my eyes at least. So I hold sell token. I think it’s fantastic asset. I’m very happy about it. The company holds a ton and, and kind of a side benefit is it keeps the interest in line. So the largest cell token holder is the company. So there’s kind of, in my mind, there was always an issue like, well, what if the shareholders of the company don’t want to pay as much interest?

Right? What if they say, oh, we should keep more of that money to ourselves and less to the community. And the cell token is a great way to balance that because it’s in the company’s interest at the end of the day for its value to go up because it’s holding such a large amount. The more, it goes up the better the company looks on paper.

The more it can fund its operations, it keeps the flywheel going.

Ben: [00:22:30] And then you mentioned sell rewards payable to interests, like as a reward to people, not in the U S I’m just curious. I mean, for a lot of my listeners are in the U S do you operate within the U S for most of the services? What has kind of truncated?

What states do you operate? Yeah.

Zach: [00:22:51] Sure. Sure. So every state has very different laws, so some states we can pay rewards, but we can’t take loans. Some can’t use sell pay. We were following each state’s guidelines and we’re trying to get more and more licenses, but it’s a very difficult business.

And like in Texas they can’t use stable coins, but they can use di and there’s in New York. They can only use Bitcoin and Ethereum. There’s a lot of fringe rules within the fifties. And then the reason why we can’t pay rewards and sell to the U S is because it’s a securities issue. We listed as a reg D company sell token is listed as a secure.

So we cannot pay securities to non accredited investors at the end of the day. So outside of the U S you can earn those bonus rewards and we encourage everyone that wants to, to do so, but inside the U S we can’t do that. Now. Fortunately, we’ve had some more clarity where we’re going to be able to offer those incell rewards to accredited investors in the UK.

But, you know, it’s like, I hate those rules because you’re saying wealthy people can access these securities that have a high chance to appreciate and other people can’t and that’s. The most corrupt thing I’ve ever seen. So I, you know, I’m so glad that that like we had this whole decentralization, you could buy these tokens on Dexis because otherwise average people would never have a chance to buy them.

Right. Like I would have loved to buy Uber, but the sec said I’m too poor to do so. And that’s just as absurd. So the fact that. These tokens were available on a decentralized market, give huge financial opportunity to thousands of things.

Ben: [00:24:33] Yeah I completely agree with the, a credited investor. If you’re wealthy, you’re smart enough and sophisticated enough to be in these different investments.

Zach: [00:24:42] How, right? Like, if you’re young, you have the most valuable asset of all time, right. You have years ahead of you. So if I throw a thousand dollars at some startup and it went bust, you know, who cares? I’m 25 years old. Right. It wouldn’t matter. But if you’re. 80 years old and you have $10 billion. Oh, you can invest in anything you want.

And we’ll allow that. It’s like, I look at our system today and I say, no wonder why people are struggling so much everywhere. They turn, they’re getting taxed. They’re getting inflated away. They’re being legally disallowed to not participate in financial opportunities. Like the system is rigged against the average person.

I’m completely convinced. And I see it more and more.

Ben: [00:25:25] Can’t say I don’t disagree with you, but that’s a, that’s a whole nother conversation for another day. I’d be curious. I mean, it’s, it’s Celsius. You guys are clearly moving fast and innovating quite a bit in the space, but I I’d be curious to ask what your biggest threats as a business are.

There’s a lot of murmurs. Traditional banks entering the space, you know, all of this Katelyn long what she’s doing in Wyoming Coinbase is going to do an IPO, whatever, a hundred billion dollars there that’s about, I think going public, which is a competitor. You know, so there there’s a lot of this and for, for me, I’m I’m team crypto.

I’m just glad, you know it’s coming more and more mainstream, but for you guys this, you know, starts to look pretty competitive. I’d be curious to see how you see the, the other competitives and some of the risks to like Celsius business as, as it is.

Zach: [00:26:23] Sure. Well, we’ve positioned ourselves beautifully so far.

We created a community organization and that’s something none of our competitors have, right? The Coinbase doesn’t have a loyal base of Coinbase fans and block five. Doesn’t have people that say, oh, I love bok fine. But if you post something bad about Twitter or something that about Celsius on Twitter, you will get the Celsius army coming in.

Hard fast and strong. K. And it’s amazing. So that’s our community is our number one asset by far. And then as far as other business models like Celsius is looking to absorb everything. We, when defy started becoming very popular and very, very profitable, we started working in defy and that’s why we’re able to pay such high rates on stable coins.

When big banks want to get involved, they’re going to need a partner to enter this space with and operate with. Borrow Bitcoin from do whatever they need to do. We’re going to be there to help. Right? We are looking at the hundred year timeframe. We’re not looking to go public and sell and make $10 billion.

Like through the, the company structure, we, everyone got cell token bonuses. And so we’re all very vested in the longterm success of Celsius. This is not about. I’m going to build a company. I’m going to create a bunch of users at a loss, and then I’m going to sell and make $10 billion. Like at the end of the day, $10 billion is cool, but it doesn’t change anything.

Alex has created several very innovative companies. And this is his legacy. This is what he wants to go down to history for is democratizing finance and bringing financial independence to a billion people. So that’s, that’s the goal here. And with our community with paying the highest rewards, without charging fees and creating the best customer experience, we have no competition that we’re truly worried about.


Ben: [00:28:17] Awesome. Who do you see as your biggest competitor right now in the space and why?

Zach: [00:28:22] You know, we talk about block five. We talk about next. So. We talk about Coinbase, but again, we think that they’re in not offering their community the best. They’re trying to suck as much value out of their community as possible.

And they can do that for X amount of time and steal X amount of money. But at the end of the day, people are going to go where they’re treated by. And that’s what Celsius every time when it comes to loans, when it comes to earning on your assets, when it comes to transferring funds or, you know, working with us, if you, you send coins to the wrong address, or you had an issue, or you want to talk to the CEO, like we’re very, very transparent.

We value our community above everything else and we provide the superior service. So. Yeah. I don’t think we’re really concerned about those guys long-term and, and we’re profitable business model. You know, how many companies are profitable nowadays, period. And then how many crypto companies on top of that are profitable.

The market is telling us that we’re doing right by paying our users 80%. So we’re going to continue to do that. And we’re going to continue to absorb more and more. I mean, if you have pick, when are you going to hold it somewhere where you get paid less or you get paid. Right. Are you going to go somewhere where they’re looking to liquidate your loan or they’re going to protect your loan at all costs?

Are you going to go somewhere where you, you get to talk to the CEO once a year or you get to see the CEO every Friday in live chat with them? Like, that’s the Celsius difference, right? It’s not, oh, this KPI or, oh, we spent this much on advertising or, you know, whatever. These are the things that really matter at the end of the day, not the showy.

Ben: [00:30:01] Awesome. Awesome. And then I I’d be remiss if I didn’t ask about defy. De-centralized finances kind of exploding in popularity. A lot of the core business that you’re doing. Collateralized lending, borrowing, lending, all of these things is happening in a more decentralized way. Obviously pros and cons of the more centralized versus decentralized.

But how do you see Celsius kind of existing in this world where  is a little bit more prevalent and important?

Zach: [00:30:32] Yup. We have one foot in defy. Like we deploy assets on . We earn yield with decent. We’re always looking at what’s coming and what’s happening because it’s a fantastic service. And there’s a lot of DJ five projects out there that are paying a lot of yield to people.

And we participate in that. We provide liquidity, we borrow funds. We supply funds. Like we are a bridge into defined, supportive very much. But we’re also that other port into C5 where we’re working with institutions that can’t get in that space, right. They need some help getting there, or they need someone to trust, or they need someone to call or talk to.

So we fully support DFI and we want to see that flourish and grow because that’s only gonna benefit our user base, the more opportunities, the better. And that’s something that we do better than defy is balance our books. So. If you ever notice on the defy platforms to borrow an asset, it may be 15%, but if you supply liquidity, there may be three, four or 5%.

And that’s just because there’s a huge mismatch. There’s a time more lenders. And then I’m sorry, there’s a ton more borrowers than there are lenders. So the price is really high. We can manage our books and manage our assets, move money around, be much more flexible and meet the market demand actively instead of enough, in a passive way that defy would go.

And that allows us to be sustainable, pay high yield as well as keep the, the rates for borrowing low and competitive. So people want to do business with us. And I think that’s our biggest advantage over T five. Well, you know, when things are great and markets get crazy, then we can deploy assets and get 20, 30, 50% on ether USB-C or whatever’s, you know, in demanded our users love that because they get paid more and everybody wins.

Ben: [00:32:21] Awesome. Well, Zach enjoyed the conversation, learning more about Celsius. Where can my listeners find out more about you or Celsius network? Where would you like to send them?

Zach: [00:32:32] Absolutely. Please follow us on Twitter. On YouTube. We do a live show every Friday called the AMA come join our telegram channel.

We’re on all social channels, Reddit. We love to converse, you know, tweet at Mushynski ask him a question. He loves talking with people and you know, come join us for the show. Talk to us, introduce yourself. We want to connect with our country.

Ben: [00:32:55] Awesome, Zach, it’s great having you on the show.

Appreciate it.

Zach: [00:32:58] Thank you so much for having us.

Ben: [00:33:00] There you go. First off. Thank you very much for listening all the way through. I hope you got a lot of value out of that conversation. As always. You can find show notes, links, and [email protected]. Please share this with anyone you think might be interested and derive any value from this conversation.

And as always, you can reach out to me for any feedback or questions. Please give the video a like, or even better subscribe on YouTube or your podcast player of choice. This really helps others find the podcast or the video as well. Thanks a lot. Hope everybody has a fantastic day and stay safe out there and invest wisely.

Ben Lakoff is an entrepreneur and finance professional. He has developed strong global finance experience through 10 years of international assignments in the US, Brazil, Afghanistan, Southeast Asia, Czech Republic and through the award of his Chartered Financial Analyst (CFA) certification.