Last updated on May 28th, 2023 at 08:53 am
If you have been following cryptocurrencies, then you might be well aware of price changes. Cryptos are highly volatile tokens and investments are subjected to high-risk appetite. A decade ago we were dealing with only one crypto token – Bitcoin.
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Over the years, Bitcoin was able to create more than 50% of the total market volume. Despite price hikes and falls, Bitcoin still enjoys attention while investing. But with changes in time, the number of crypto tokens increased.
Today, there are more than 14k+ crypto tokens in the investment market. The total investments have increased by more than $3 trillion globally. Along with crypto tokens, various other allied services also grew. This includes the emergence of crypto exchanges, non-fungible tokens, and stable tokens. Learn more: bitgratitude.com
The beginner guide to understanding Celsius (CEL)
To make it simple, the CEL network is a lending platform much like traditional banks. The company was incorporated in 2017 and is a regulated agency working under SEC rules. The primary aim of CEL was to provide interest on crypto deposits.
In 2018, the CEL network entered the crypto market through Initial Coin Offering (ICO). The company was able to acquire more than $35 million through ICO. Other than lending services investors can also take collateral loans against their holdings.
How did Celsius attract investors?
It is not easy to survive in the crypto market. In the past decade, there have been various crypto platforms that have made their base.
Also, gaining customer trust to invest in their holdings is yet another challenge. Despite the challenge, how did Celsius find its way? The working philosophy was pretty simple.
Celsius initially targeted users by providing a little higher returns compared to competitors. Next are the lesser transaction fees and other benefits while maintaining the least balance.
If an existing crypt investor wishes to take a loan then it was possible to do so by converting to dollars. Yes, you heard it right.
Investors had the opportunity to convert their holdings to dollar value. This indeed is a great attraction that builds their customer base.
The entire working model is based on the native token in the network CEL. Investors can use this token to make and receive payments.
Any rewards added to your account are also converted to CEL tokens. Celsius also implemented a loyalty program for its users. As when the investor progresses in each tier, there is a bonus that gets added to the account.
How does CEL work in its network?
The Celsius network is built on the Ethereum network. This works to CEL’s advantage. It is possible to transfer CEL for other tokens including ETH. You also gain the advantage of transferring CEL to other users within the network.
CEL declaring its bankruptcy
Much to its hype and benefits, the CEL network also came crashing down in 2022.
The crypto market crash impacted the working philosophy of the CEL network. Many exchanges declared their insolvency during this year.
And CEL is an addition to it. On July 13 last year, CEL went ahead and declared its insolvency under Chapter 11 of the bankruptcy act.
In a neatly delivered communication, it was confirmed that CEL has stopped all investments. The company has also kept withdrawals on hold, and fund transfers.
The step is aimed to protect customers from further losses. During the time of insolvency, Celsius declared a liability of $4.7 billion.
The bankruptcy of Celsius did not seem to be breaking news given the market crash. The past year has been the worst nightmare for any crypto investor.
Eligible users may receive their holdings
Now this comes as good news to many crypto investors. In a recent article, Celsius announced that eligible users will receive their holdings.
The eligible users will be notified about their holdings and the amount due to them. Users will be required to begin the process to update their KYC and other details to process the refunds.
However, the catch here is the definition of eligible users. Several conditions define the term eligible users. Investors will receive close to 94% of their total holdings through this program.
This is a relief to many investors. There is a set of defining questions that decide whether you are an eligible user or not. To learn more about cryptos Bitcoin smart.
