Dear Alex, Celsius and the Celsius Community
The last month has been difficult for many of us in the crypto space. Celsius has been an aspiration for some of us, a means to financial freedom for others and a welcome change from the traditional financial industry for others.
I personally have been involved with Celsius with a personal account, superannuation account and a company account as a depositor. I could have taken money out of Celsius when there was noise and bad actors at play; however, I didn’t.
On hindsight, I didn’t because I have trusted Celsius, trusted Alex and have trusted in the ecosystem that they have been building. Every week, there would be rewards into the wallets without fail, Alex would be available through his AMA, always friendly and looking genuine in his interactions. The Celsius support were always customer friendly, and the app and the website made the experience so seamless. Celsius was not about you and me and hence,
…this is not about me.
This open letter is for the wider Celsius community and what Celsius represents – an opportunity to innovate and differentiate with customer as its key focus while ensuring investors are rewarded in the process.
This is why, I was surprised when Celsius had to pause withdrawals and swaps. I understand why Celsius would have to take this step with the LUNA debacle followed by some bad actors at play and risk of bank run causing liquidity issues.
There are news and stories about potential liquidation and interest by Goldman Sachs and hence I felt the need to write an open letter to you and the community because I see that Celsius has future, a future driven by the community. Isn’t that the basic premise of some of the innovation in crypto space?
Whichever path Celsius takes, I see Celsius as a business having a future only if the community exists, the depositors exist.
Celsius as a business; the whole crypto lending as a business is nothing without the depositors, without the trust from its customers. This is where any solution that Celsius chooses should have depositors at the core of the solution.
“Without the depositors, there is no Celsius as a business model”.
If there is no trust in Celsius honouring the obligations of its depositor’s aka lenders, there would be no one left to deposit, swap or transfer.
With this as the context I would like to propose few solution options for Celsius to consider:
- Option a – Celsius can initiate withdrawals of rewards instantly every week. This will provide confidence to the Celsius community and allow for Celsius to hold onto other assets to manage the liquidity issues
- Option b – Celsius can provide daily or weekly or monthly limit to withdrawals (either in terms of $ value or a % of the total account value) to minimize risk of bank run while slowly opening up to business
Reward for HODL mode
- Celsius can initiate levels of forced HODL mode with a percentage of funds in HODL mode of say a quarter, a % for a year and % for 5 years with increased rewards for longer period. This will de-risk liquidity issues and potential bank runs in the future. The percentages and duration can be played around as this is just an idea.
CEL as community investor token
- CEL could be used as community investor token with rewards and value attributed to the tokens. The core idea would be to associate CEL with the community and a valuable token community would like to hold. Part of the value of the CEL token could be used to fund and manage the Celsius business operations. For example, if we assign 30% of CEL token value to the business, these funds can be used by the company as they deem fit and more the token value increase, more resiliency the company will have. So, CEL can be used as a token not just to reward its community but also to part fund the business.
Conversion of some of the token/debt to equity
- Convert some of the debt to equity voluntarily to allow for a stake in the growth of the company. This option could be provided to current as well as future Celsius community members.
We want Celsius to succeed. We have seen the power of people on twitter recently with people ready to #CelSqueeze and #hodl.
It’s in your hands to choose the best outcome for Celsius. Don’t let us down.