Speaker 1: So the big question is this, how do investors like
Speaker 1: us get access to the ideas, information, and most importantly,
Speaker 1: the right people that give us the tools of information
Speaker 1: we need to make informed and educated decisions to have success.
Speaker 1: That is the question, and this podcast will give us
Speaker 1: the answers. This is Mark Moss, your host. Let's get
Speaker 1: this started. Hello, and welcome to another episode of the
Speaker 1: Market Disruptors podcast. Today I am joined by Alex Maschinski
Speaker 1: from Celsius. We get into some really good conversations. So
Speaker 1: we talk about their business model, how they're out competing
Speaker 1: the banks at what they do. We talked about growing
Speaker 1: in a bear market and the trajectory of their growth
Speaker 1: over the last year, having started in the boom market
Speaker 1: and growing to the bear market. And then we get
Speaker 1: into the risks of crypto lending, looking at some of
Speaker 1: the risk the pitfalls, and we talk about the biggest danger,
Speaker 1: the number one thing, the biggest risk to crypto lending
Speaker 1: and what they're doing about it. So, anyway, lots of
Speaker 1: your conversation with Alex us I just jump right into it. Hey, guys,
Speaker 1: welcome to another episode of the Market Disruptors show. I
Speaker 1: am here with Alex Maschinski from Celsius. He probably doesn't
Speaker 1: need much of an induction introduction, but welcome to the show, Alex,
Speaker 1: thanks for having me. How are you. I'm doing great,
Speaker 1: Thanks so much for thanks for joining. I. Uh, like
Speaker 1: I said, you probably don't need much of an introduction.
Speaker 1: You're pretty well known throughout the industry because you're one
Speaker 1: of the hardest working guys around the industry, I guess.
Speaker 1: But but for those that maybe don't know, just tell
Speaker 1: us a little bit about you know, how you got
Speaker 1: to the space and what you're doing right now. Sure,
Speaker 1: and so I founded the Celsist Network with Daniel and
Speaker 1: two years ago, and our mission was too really scale
Speaker 1: the industry. We felt that the industry is kind of stuck,
Speaker 1: uh with the number of users, with like the type
Speaker 1: of people that are in it, and we couldn't get
Speaker 1: to like mass adoption. So we thought that if we
Speaker 1: created a product that acted in the best interest of
Speaker 1: the community and earned the yield, we could bring seven
Speaker 1: and a half billion people to crypto because that's what
Speaker 1: everybody's looking for. So we think that we found kind
Speaker 1: of like that the magic utility that everybody wants, right
Speaker 1: and uh, I guess we're doing good because everybody is
Speaker 1: now trying to copy us coin Base and Finance and
Speaker 1: all these guys. I now, even charl Schwap stopped charging
Speaker 1: fees for you know, so it's like, so we're dragging
Speaker 1: everybody with us, but still Celsia space six seven times
Speaker 1: more than everybody else, and we paid more bitcoin to
Speaker 1: our users and all the other guys put together, So
Speaker 1: we have a lot of very happy customers. Yeah, So
Speaker 1: to to kind of break that down, I mean, you're
Speaker 1: wearing a shirt that says total um. So for the
Speaker 1: people that want to hold all that one just they
Speaker 1: don't want to sell, they want to hold. It gives
Speaker 1: them an option to start earning interest on those tokens
Speaker 1: as opposed to selling them if they want to access
Speaker 1: them for liquidity, which seems like a pretty good method. Now.
Speaker 1: I know when we talked in the past, you really
Speaker 1: wanted to give people an option other than the banks,
Speaker 1: because the banks are basically taking money on deposit and
Speaker 1: loaning it out, but they don't pay anything, right, So
Speaker 1: that's kind of what you're trying to go after. Yeah,
Speaker 1: the competition is between the crypto community and the banks. Right,
Speaker 1: all of us give our money for free to the banks.
Speaker 1: The bank's turnaround landed on the credit card to our
Speaker 1: neighbor charge them. They keep all that profit to themselves.
Speaker 1: Well what if you and me as depositors could get
Speaker 1: all that profits. Associates does the same thing the banks do,
Speaker 1: but it takes eighty percent of the profit that gives
Speaker 1: it to the depositors instead of the banks taking eighty
Speaker 1: percent of the profit and giving it to their shareholders.
Speaker 1: So it's a very simple concept for people to understand.
Speaker 1: And you can afford to do that because you don't
Speaker 1: have a skyscraper in uh in the Financial District in
Speaker 1: New York, in a fancy apartment in Manhattan. Yes, but
Speaker 1: I can afford that because it's the right thing to do.
Speaker 1: I think you very rarely in life you can do
Speaker 1: good and do well at the same time. I'm and
Speaker 1: it's to do it several times. If you look at
Speaker 1: my history, Celsius, my eighth company, the company before that,
Speaker 1: I put wireless in the subways in the ark after
Speaker 1: a hundred year there was no years that there was
Speaker 1: no connectivity or communications in the subways, right, So that
Speaker 1: was fighting with the city and so on. And now
Speaker 1: eight million people use the service for free. I did
Speaker 1: Voice of i P before that four billion people use that.
Speaker 1: I know most people won't believe it. Just go old
Speaker 1: Wikipedia and put my name in there. So so this
Speaker 1: is again the same thing I've done my entire life, right,
Speaker 1: create opportunity for other people, Uh, give them something they
Speaker 1: thought that they didn't deserve. And here I am part
Speaker 1: of the one percent, but I found a way for
Speaker 1: everybody for the basically take advantage of all these magical
Speaker 1: things that the one percent does only for themselves. And
Speaker 1: what we do is without getting sidetracked, but maybe just
Speaker 1: a little bit um you know. So you know, someone
Speaker 1: like yourself, like you're talking about you kind of have
Speaker 1: this track record of of creating things to help other people, right, free,
Speaker 1: free connectivity, right for phones or whatever. Uh, finding a
Speaker 1: way to give back profits um and and so, like
Speaker 1: you said, you are part of the one percent. But
Speaker 1: isn't it almost something like like I've always believed that
Speaker 1: if you help other people get what they want, then
Speaker 1: you get what you want. My parents I was born
Speaker 1: in Russia and the US are and my parents taught
Speaker 1: me from the first day that giving is receiving, right
Speaker 1: and and uh so I'm a given right. I was
Speaker 1: just born that way. I was brought up that way.
Speaker 1: And the more give, the more happy I am. I
Speaker 1: find happiness in that. I don't find any happiness in
Speaker 1: hoarding and dying with the most dollars in the bank account.
Speaker 1: I mean, that just doesn't do anything for me. So
Speaker 1: I did I do well only because all these other
Speaker 1: people are doing well. And Celsius now is over four
Speaker 1: hundred million dollars in deposits, and we earn again six
Speaker 1: seven eight percent on that. If you keep twenty percent,
Speaker 1: that enough to pay all the bills for the company.
Speaker 1: It's enough to pay my bills. Everybody's happy, Yeah, So
Speaker 1: let's talk about that. So UM, it's been about two
Speaker 1: years since you launched UM kind of launched kind of
Speaker 1: like right in the crypto boom with Seeen or whatever. UM.
Speaker 1: But even through the downturn the bear market, you've continued
Speaker 1: to grow at a pretty rapid pace. What's the growth
Speaker 1: been like over the last years? Wearing the huddle shirt
Speaker 1: and it was very unpopular. People kept coming to me
Speaker 1: at conferences and saying, isn't it time to get rid
Speaker 1: of this huddle shirt? Because a bit that went down
Speaker 1: from I think sixteen thousand down to thirty it was
Speaker 1: a very unpopular shirt. Now people are saying, where can
Speaker 1: I get this shirt? Alex, come on, give me the shirt.
Speaker 1: So look ups and downs. The Hoddlers stay Hoddlers, right.
Speaker 1: The people who were sold out, as we know, always
Speaker 1: sell out at the wrong time because of when our
Speaker 1: emotions come to play. Unfortunately, that's exactly what the traders
Speaker 1: prey on. They prey on fear, they prey on despair,
Speaker 1: they prey on you losing your uh faith. And I mean,
Speaker 1: you're a hoddler and you're earning that six or seven
Speaker 1: percent on top of it, that just gives you more
Speaker 1: comfort to It gives you that extra few months that
Speaker 1: sometimes you need to weather the storm. I'm curious from
Speaker 1: someone like you who's kind of been in the technology
Speaker 1: niche right with void um and you've been an early adopter, right,
Speaker 1: so you've been building it before it was popular, So
Speaker 1: you've kind of seen this play out before. And so
Speaker 1: we went through this bear market where a lot of
Speaker 1: people folded up shop or kind of just just just
Speaker 1: held back, but you pushed forward and built more, right.
Speaker 1: I mean, do you think, um, I mean, is that
Speaker 1: because you just believe in the industry, and now it's
Speaker 1: kind of starting to pay off or you're still building
Speaker 1: waiting for it to come. Look, the early days of
Speaker 1: Voice of Our p were just as hard when we
Speaker 1: went out and try to convince people that they can
Speaker 1: stop using their phone company and they can switch to
Speaker 1: this little company that no one knew back then it
Speaker 1: was called urban It and and people laughter us. They're like,
Speaker 1: I'm never gonna trust you. Who are you? You know,
Speaker 1: like you are nobody and using this weird technology that
Speaker 1: nobody else has, you know, like I we can't trust
Speaker 1: you for anything. Uh So it wasn't easy, right, But
Speaker 1: that convincing people to switch from one phone company to
Speaker 1: another is definitely not as hard as convincing people to
Speaker 1: deposit money. Stop depositing money with City or JP Morgan
Speaker 1: and giving it to you. So I think the bar
Speaker 1: is much higher, and that's why we have that slower adoption. Right.
Speaker 1: If you look at the speed at which the Internet scale,
Speaker 1: we are scaling one tenth that speed. And part of
Speaker 1: what I dedicating the rest of my life too is
Speaker 1: really make sure that seven billion people have access to
Speaker 1: this because the banks are not going to change their way.
Speaker 1: The politicians are going to change their way. The Fed
Speaker 1: just injected two hundred and eighty billion dollars in two weeks, right,
Speaker 1: they created poof two and an eighty billion. No one
Speaker 1: they paid any attention to it. So when people are
Speaker 1: gonna realize that all of that is hidden inflation that
Speaker 1: just eats away your money, right, we're gonna realize when
Speaker 1: it's too late. Yeah, if a catapult was eating your house,
Speaker 1: you would go to the exterminator and take care of
Speaker 1: it right away. Well, guess what, this caterpillar is eating
Speaker 1: a dollar and you're not doing anything about it. So
Speaker 1: I think again, bitcoin is the best doomsday insurance out there.
Speaker 1: It's the cheapest doomsday insurance out there. And anyone who
Speaker 1: does not have one to five cent of their money
Speaker 1: in it doesn't understand what's happening every day. I'm curious. So,
Speaker 1: like I said, you know, you started in the in
Speaker 1: the peak of the of the boom, and then you
Speaker 1: built all through the bear market. But I've seen other
Speaker 1: people in the industry, coin Base and others like reporting
Speaker 1: good numbers like good signaps um good. You know, we
Speaker 1: see a bunch of new wallets coming online. Hash power
Speaker 1: super strong, but your business has continued to grow as well, right, So, like,
Speaker 1: can you tell us a little bit like what the
Speaker 1: growth curve may have been like over the last you know,
Speaker 1: eighteen months. Has it been kind of steady up or
Speaker 1: do you take a dip? Is are we on a
Speaker 1: big up trend right now? So people are excited about
Speaker 1: coin based Binance. Those are trading businesses, right They go
Speaker 1: up and down in volume based on the hype of
Speaker 1: the trading. We consistently make six seven eight percent on
Speaker 1: our a U M. And we from day one we
Speaker 1: had the same growth. We did not have slowed down.
Speaker 1: We did we were trying to speed it up. We
Speaker 1: can't do that either. It's between a hundred and fifty
Speaker 1: and two hundred people every day. Then we got between
Speaker 1: two and three million dollars and deposits every day. And
Speaker 1: now sometimes I can tell you when Binance announced the
Speaker 1: lottery interest income and everybody went to their site and
Speaker 1: found out that I can't actually learn anything. We got
Speaker 1: fourteen million dollars that day and the next day we
Speaker 1: got like nine million dollars. So we we definitely had
Speaker 1: a rampop because other people were trying to copy us,
Speaker 1: but they didn't deliver, right, So, but consistently we do
Speaker 1: two to three million. Our average depositors twenty tho dollars.
Speaker 1: The average coin based deposited about a thousand dollars. So
Speaker 1: we have the cream of the crop of the crik
Speaker 1: To community. We have the Hoddler community, the coin Base,
Speaker 1: the Bindance have the trader community, right, the speculator community.
Speaker 1: So these are different communities that have different behavior and
Speaker 1: we serve different purposes. Right. Our job is to protect
Speaker 1: to create yield. We always represent the depositor. We don't
Speaker 1: represent the hatch fund. We don't We're not a neutral player.
Speaker 1: I can assure you that coin Base cannot look at
Speaker 1: you in the face and tell you I'm always acting
Speaker 1: in your best interests or Bindance or anybody else. Right, So,
Speaker 1: I I heard something about a new milestone that was
Speaker 1: passed where you guys have reached a record of of
Speaker 1: assets under management a u M. Right, like something about
Speaker 1: four million or so. Yeah, we'll just crossed the four
Speaker 1: hundred million. And again that's a few into some pretty
Speaker 1: rare air up in the top. I think, uh, probably
Speaker 1: one of the probably at least one of the biggest
Speaker 1: funds in all of crypto I would imagine at this point.
Speaker 1: I think officially it says is number two, right behind
Speaker 1: the Great Scale. So there were a few other people
Speaker 1: up there, and it looks like we're sucking assets up
Speaker 1: from everybody. Right. So again, if if you're not paying
Speaker 1: your customers uh for depositing assets with you, and we are,
Speaker 1: why would they keep the oussets with you? Why wouldn't
Speaker 1: they swim over? Right? So, so I think we've proven
Speaker 1: over two years that were consistent, we pay we you know,
Speaker 1: the funniest the best thing is that we took the
Speaker 1: worst day of the week, which is Monday, and we
Speaker 1: made it the best day of the week because we
Speaker 1: pay interest. Monday morning, most of our customers wake up
Speaker 1: and there's interest in their uh inbox, you know, just
Speaker 1: waiting for them and a smile and the fifty people
Speaker 1: faces every every Monday morning. Yeah, that's great. So that's
Speaker 1: a great milestone. Congratulations on that. So, you know, the
Speaker 1: business model of paying out you know whatever four or five, six,
Speaker 1: seven sometimes interests is amazing, um almost two good to
Speaker 1: be true? Right? Uh. You know I've talked about earning
Speaker 1: interests on stable coins and and other cryptocurrencies, bitcoin and
Speaker 1: stuff and so I've I've got a lot of feedback
Speaker 1: from from users. A lot of people just say, oh,
Speaker 1: Alex seems like such a great guy. I just trust
Speaker 1: him because I see him talking all the time. But
Speaker 1: but realistically, um, nothing is risk free in life, right,
Speaker 1: Doing nothing is not risk free? Right, as you already said,
Speaker 1: the worms eating the house. If I leave my money
Speaker 1: in the bank, I know I'm losing money there. Um,
Speaker 1: So we know there's risk, but UM, I know some
Speaker 1: of it is counterparty risk. And so you're taking that
Speaker 1: money loaning it out to earn income. Uh. Some of
Speaker 1: the things I've heard would be that, like you loaned
Speaker 1: the bit fin x and bit fin x is potentially
Speaker 1: going to be in trouble with the n Y, you know,
Speaker 1: a g over tether and whatnot. What can you say
Speaker 1: about something like that? So we we longed to about
Speaker 1: a hundred eight institutions. We loaned to bit fin x,
Speaker 1: We loan to many others, and for each one of
Speaker 1: them we have a risk profile. So we don't land
Speaker 1: than anybody unless we on board. Then we do full
Speaker 1: ky CML. We get to see their balance sheet and
Speaker 1: we get to understand what the risk is because we
Speaker 1: represent the community right if if if we make a mistake,
Speaker 1: we have to pay for it from our treasury and
Speaker 1: make the community good right. So so we have a
Speaker 1: counterparty risk. In this case, the counterparty would be bit
Speaker 1: fin x, or it would be a trading firm mostly
Speaker 1: hedge funds, or other major Wall street firms that trade
Speaker 1: in bitcoin, and specifically to bitfin x. We have seen
Speaker 1: assurances from them in the form of audited financials, in
Speaker 1: the form of their uh A deposit on hand, in
Speaker 1: the form of their insurance. That makes us feel that
Speaker 1: we can trust them with some of our assets. Now
Speaker 1: we also bore from them, so at any time we
Speaker 1: try to balance that risk, meaning the amount that we
Speaker 1: give them. We may give them ripple, or we may
Speaker 1: give them life coin. Most people think we give them bitcoin,
Speaker 1: but bit foin x pay is less than one percent
Speaker 1: a year on bitcoin, so obviously we're paying four and
Speaker 1: a half percent, So you can't make four and a
Speaker 1: half percent if you land at one percent. We don't
Speaker 1: land bit finex any bitcoin, but the coins that they
Speaker 1: do want, where we can earn a nice heel, we
Speaker 1: then borrow other things for them. We borrow other assets
Speaker 1: that offset the risk, meaning if they default for any reason.
Speaker 1: We hold enough assets where we have zero risk or
Speaker 1: zero exposure, and we do that with everybody like we
Speaker 1: you know, even like we we land and bore from
Speaker 1: Galaxy Digital, for example, and at any time we have
Speaker 1: a net zero exposure in most cases with them and
Speaker 1: with other major institutions. Galaxy Digital is a public company.
Speaker 1: You can see their assets, so it's very easy for
Speaker 1: you to know, for you, meaning for Celsius, to know
Speaker 1: what's our risk exposure and manage that properly. So um
Speaker 1: your bank, any bank did you deposit dollar with, and
Speaker 1: does the same thing if you happen to uh the bank,
Speaker 1: for example, with Deutsche Bank, they'll leverage fifty two one,
Speaker 1: meaning they took for every dollar that you gave them
Speaker 1: a deposit, they lent out fifty dollars out there, and
Speaker 1: so they have tremendous We We never have more than
Speaker 1: one to one leverage. So we are under leverage compared
Speaker 1: to any bank or any major financial institution in the
Speaker 1: United States. So it would be hard for me to
Speaker 1: say we're less risky because we're not ABAC insured and
Speaker 1: we're not all these other things, but we're definitely less
Speaker 1: much less leverage than most of these guys you're talking
Speaker 1: about most of the other financial institution that people think
Speaker 1: are safe havens. So really, then, I mean, whether it's
Speaker 1: bit fin X or any other number of people, I mean,
Speaker 1: it's always counterparty risk. So if I loan money to you,
Speaker 1: I know you and I've talked to you. But when
Speaker 1: I lean money to you and you leaned to somebody else,
Speaker 1: then I lose that relationship. UM. And so whether it's
Speaker 1: fifin X or whoever, there's counterparty risk. And basically what
Speaker 1: you're saying is that UM, you guys manage that, UM,
Speaker 1: spread the risk around by institutions, and then offset the
Speaker 1: risk with borrowing and lending. I guess that's that's the answer, right,
Speaker 1: So we we we manage on behalf of fifty depositors. So,
Speaker 1: like like I said to you before we started recording, right, anyone,
Speaker 1: any person can go open account of bit finis and
Speaker 1: lend them XRP directly and earned twenty more than what
Speaker 1: we pay you. Out Right, you can bypass us go
Speaker 1: directly to any of these institutions, but you will have
Speaker 1: to create a hundred a D the relationship. You're gonna
Speaker 1: have to do PSCML and all of them, you're gonna
Speaker 1: have to manage the accounter, party risk and everything else.
Speaker 1: So if you think about us just charging for that,
Speaker 1: I think that is definitely a reasonable uh kind of
Speaker 1: it's a fair deal for both sides, right, that's what
Speaker 1: we're trying to say. What about what about regulatory risk?
Speaker 1: So that would be something also, right, So let's say
Speaker 1: that the regulators, whoever they may be right, they're they're
Speaker 1: very unclear on what's going on. So they want to
Speaker 1: come in and freeze your accounts because of the cell token,
Speaker 1: or because you did business with tether, or because any
Speaker 1: number of reasons. So what kind of what do you
Speaker 1: think about that risk? Full disclosure? We are filed DI
Speaker 1: reg D with SEC where fins and registered. If you
Speaker 1: check all the other people that do this kind of
Speaker 1: stuff in the business or based in the Seychelle Islands,
Speaker 1: or based in in Malta or based in the b
Speaker 1: v I or whatever, you would see that none of
Speaker 1: them have any SEC filings of FINS and filing. So
Speaker 1: we actually work with regulators. We work with enforcement agencies
Speaker 1: when they need to find certain assets and they're trying
Speaker 1: to track different accounts. If somebody comes to us and
Speaker 1: asked us that I'm talking about regulators or enforcement agencies.
Speaker 1: We are there to co operate with them, right, So
Speaker 1: we are a good citizen in the financial system. Uh.
Speaker 1: And unlike most of the projects in the crypto space
Speaker 1: which did like you've seen us recently paid twenty four million,
Speaker 1: they'll fine. The reason they paid a fine is because
Speaker 1: they didn't do what Celsius did. They did not file
Speaker 1: a reg D when they did their race. If they did,
Speaker 1: they wouldn't be paying the twenty four million all fine.
Speaker 1: So we are the example. We have the highest standard
Speaker 1: in our industry today. Celsius is probably the only company,
Speaker 1: the only i c oh in the United States that
Speaker 1: did not receive an sec S a letter or an
Speaker 1: action letter or any kind of action. Look, look we
Speaker 1: we again. We we have a compliance department. We did
Speaker 1: KYC from day one. We didn't do KYC after we
Speaker 1: had ten million customers and we decide, oh my gosh,
Speaker 1: we forgot to do KYC. Let's do And that's part
Speaker 1: of what slows our growth. I mean, we have we
Speaker 1: have a hundred and twenty thousand downloads and we only
Speaker 1: had forty five thousand people that pass KYC. So we
Speaker 1: paid for it in the form of not admitting tens
Speaker 1: of thousands of people. We either don't know how to
Speaker 1: do it or they'll get scared when we asked them
Speaker 1: for the social security or for their driving license. So
Speaker 1: it's not easy for us. It's not like, oh, look,
Speaker 1: can't I see it's so easy? Right? We lose half
Speaker 1: of our customers because of that. But compliance and protecting
Speaker 1: our community right, making sure we don't admit any bad apples,
Speaker 1: because that's again, I represent the community. If I screw
Speaker 1: up for the community, I will lose uh everybody, right,
Speaker 1: So our job and that's why we only promising midicine
Speaker 1: single digits. We're not trying to get you, right, So
Speaker 1: we're trying to balance the risk with providing great security
Speaker 1: blanket for the entire cryptic community that that uses us.
Speaker 1: So if I'm a potential user and I'm looking at
Speaker 1: this and saying, shoot, I'd like to make some percent
Speaker 1: return on my crypto or stable coin um and I
Speaker 1: want to do my due diligence or whatever, what, what
Speaker 1: would you say is the number one risk that I
Speaker 1: should watching out for. So look, you you you don't
Speaker 1: have to trust us at all. You can verify all
Speaker 1: of our assets. You can verify the loans with issue.
Speaker 1: You can verify are we giving back eight or not.
Speaker 1: There's many many different online forms that do that every day.
Speaker 1: If you go to the Celsius network telegram channel that
Speaker 1: is managed by the community. If you go to Celsians
Speaker 1: that network that colm sorry, that is a website that
Speaker 1: is managed by the community that is basically reports as
Speaker 1: a separate, independent party on what Celsius does. We report
Speaker 1: as well. You can go to our website and see
Speaker 1: all of our wallets and what do we have there,
Speaker 1: but you you will see a lot of stats that
Speaker 1: are not available on our side in those other communities
Speaker 1: where people got this either because they tweeted something or
Speaker 1: they got it because they did deep research on all
Speaker 1: the wallets and they saw where the coins went and
Speaker 1: so on, and you know, they asked very hard questions.
Speaker 1: You can see them asking us, poke, poking us and saying, well,
Speaker 1: this number is not exactly what you said, because it's
Speaker 1: not exactly right. Sometimes it's seventy nine point six and
Speaker 1: sometimes it's eighty two point two. Right. The numbers fluctuate,
Speaker 1: but we try to keep it at that eight percent
Speaker 1: level of giving back to the community. So all these
Speaker 1: things are the question is it Sells is acting in
Speaker 1: the best interests of everybody in our community, or Sells
Speaker 1: is treating different people differently? Is Alex stealing all the
Speaker 1: coins for himself? Things like that that are that are
Speaker 1: real questions because unfortunately in our industry in the last
Speaker 1: ten years had a lot of example of bad actors. Right, So,
Speaker 1: so I don't discount your your question or the listeners
Speaker 1: questions because these are critical issues and it takes it
Speaker 1: takes institutions very long time to build trust. And I
Speaker 1: don't expect people to trust me overnight. We have to deliver.
Speaker 1: For some people, we may have to deliver for ten
Speaker 1: years before they trust us. Right, Yeah, Well, I mean
Speaker 1: the longer that you do, Like you said, building that
Speaker 1: reputation is what it takes. And like I said, I mean,
Speaker 1: there's always gonna be risking something and and there's risk
Speaker 1: leaving your money in the bank as well. So it's
Speaker 1: just important for everyone to do that. And I just
Speaker 1: was hoping to get some framework like you've given for
Speaker 1: people to look at different platforms. I think what's interesting
Speaker 1: is most people probably don't realize is that if they
Speaker 1: leave any of their coins on exchanges. It's probably already
Speaker 1: happening to them without them even knowing it. Yes, most
Speaker 1: people don't know that exchanges use their coins to make
Speaker 1: tremendous amount of profit. Again, I don't want to pile
Speaker 1: on just on the binance, but if you take them
Speaker 1: on the profit that Bindance makes, right, then you look
Speaker 1: at how much they made from trading fees. There's a
Speaker 1: huge gap there. And the huge gap is money they
Speaker 1: made from front rounding, from rehypothication, from all these things
Speaker 1: that they do, from arbitrage, from all these things that
Speaker 1: they do using your coins. Now, very recently, like two
Speaker 1: weeks ago, three weeks ago, they and now it's gonna
Speaker 1: start paying interest. Well, they're paying only to two d
Speaker 1: The first two hundred will have pressed the button the computer, right,
Speaker 1: So like an auction. They only have a million seven
Speaker 1: worth of deposits that they take every two weeks, which
Speaker 1: is about two hundred people, you know, and they have
Speaker 1: two million customers, So how exactly is everybody gonna get
Speaker 1: to our own interest? So again it's just a gimmick.
Speaker 1: It's more of like a promo to try to keep
Speaker 1: people from leaving the exchange. But I called sizy on it, right.
Speaker 1: I I asked CZ to do just a good job
Speaker 1: for his depositor as it does for himself, hoarding being
Speaker 1: being paying himself all those dividends. I'm curious. Um, one
Speaker 1: more thing you had mentioned. Uh, you'd mentioned that you
Speaker 1: have like a treasury fund and if one of your
Speaker 1: one of your positions took a loss, you'd have to
Speaker 1: come out of the treasury fund. And so you've already
Speaker 1: talked about how you kind of distribute about a different
Speaker 1: borrowers um and then you have the treasury fund to
Speaker 1: kind of back up a potential loss. Um. Is that
Speaker 1: is that the way it kind of works. I mean,
Speaker 1: our people kind of have some faith and maybe we
Speaker 1: can see the treasury uns and we know that you're
Speaker 1: willing to take a little bit of a loss before
Speaker 1: you pass it on to everybody else. Socialize that loss. Yeah,
Speaker 1: So you know, I tweeted that a few weeks ago.
Speaker 1: I said, while other exchanges of socializing losses, we're socializing profits, right.
Speaker 1: The socialized it is so we we have not had
Speaker 1: to socialize anything besides the interest distribution. Every week since
Speaker 1: we launched for almost two years, right, every Monday, like
Speaker 1: a clock work. We pay interest. The interest varies based
Speaker 1: on what we earned, but we paid every Monday, right
Speaker 1: and if we are in zero, we would pay zero.
Speaker 1: We're not fabricating the numbers. I can tell you that
Speaker 1: all of our competitors coin and not coin based, but
Speaker 1: block five and next so and salt and and the
Speaker 1: crypto dot com, they all subsidizing it from their treasure.
Speaker 1: They're not earning anything, right, So and the block fire
Speaker 1: specifically said that publicly on block TV, admitting, oh yeah,
Speaker 1: we just use our investors money to pay your interest.
Speaker 1: So those are not sustainable business models, right. I mean,
Speaker 1: what Celsius did is created We invented this business, right.
Speaker 1: We basically engineered the solution that did exactly what the
Speaker 1: banks do, but the opposite. It gave all of that
Speaker 1: profit back to the depositors, right versus the shareholders. And
Speaker 1: because of that, there is such traction and there's such
Speaker 1: uh commitment from these depositors to give us more and
Speaker 1: more capital to manage. So yes, we we take out
Speaker 1: of that. We pay salaries, we pay all of our expenses,
Speaker 1: and whatever is left we're putting into a pot that
Speaker 1: is used to protect users in case we do make
Speaker 1: a mistake and any loss we have, if we have
Speaker 1: it in the future, will come from that first and
Speaker 1: only if there's not enough there, then we will have
Speaker 1: to socialize some of those losses, but we plan never
Speaker 1: to get there. We also have protection, like we have
Speaker 1: insurance UH and we have other things that help us
Speaker 1: protect many layers before we hit anything that has to
Speaker 1: do with the visitors. All right, now, UM, I know
Speaker 1: you know, so I kind of dug into some of
Speaker 1: the risks and the problems, and I appreciate you taking
Speaker 1: the time to answer that I did think I see,
Speaker 1: I think I saw recently that um light Coin or
Speaker 1: light Coin Foundation had asked you to actually manage some
Speaker 1: of their funds. Yes, we announced that they selected us
Speaker 1: for their treasury management. They also recommended us to their community.
Speaker 1: So they basically went out and said, look, we looked
Speaker 1: at all the players. We think Celsius is the best
Speaker 1: solution for our community. And again, our job is to
Speaker 1: make sure that we give enough UH income to the
Speaker 1: like coin foundations that they can perform their tasks. Right.
Speaker 1: I mean, when they deposit these coins with this without exchange,
Speaker 1: they get nothing back, right, and suddenly now they have
Speaker 1: enough income where they can pay the salaries, they can
Speaker 1: pay some of the developers, and all that is great
Speaker 1: for the foundation. Right. So I think this is the
Speaker 1: kind of stuff that I think our industry needs to
Speaker 1: do more where we all help each other. Instead of
Speaker 1: replacing the banks with new toll collectors called Buyance or
Speaker 1: other guys who just keep taking money out and giving
Speaker 1: it to Wall Street folks right or to investors, how
Speaker 1: about we we distribute all that value internally. So I
Speaker 1: think nothing I'm saying is new or different, just that
Speaker 1: no one is doing it. Everybody around us is a
Speaker 1: toll collector, and they catch us on the way in, right,
Speaker 1: they charge us four or five to buy the bit point,
Speaker 1: They catch us on the way out. They catch us
Speaker 1: when we trade. Every time we make a move, we
Speaker 1: have to pay a big to some landlord who is
Speaker 1: taking that money out and giving it to the VC
Speaker 1: or the investor or whatever. It's never back to the community.
Speaker 1: The model Selsis created, almost all of it is going
Speaker 1: back to the community. Now, I would think that you know,
Speaker 1: as you said, everybody's kind of jumping in. Everybody's doing it,
Speaker 1: maybe behind the scenes without transparency. Everyone's jumping into it.
Speaker 1: Um you're obviously growing Celsie is growing at a at
Speaker 1: a very rapid rate. I would think at some point
Speaker 1: like the larger you get, the larger in the east
Speaker 1: industry gets, the harder it gets to get that yield.
Speaker 1: Is there some risk they're like, maybe there's a ceiling
Speaker 1: on the business, or uh, your business becomes more risky
Speaker 1: as you get to a larger a U M. That's
Speaker 1: a great question, because the question is do you believe
Speaker 1: in the vision? Right? I mean do you believe that
Speaker 1: cryptocurrencies of the future. I mean, are they going to
Speaker 1: replace Fiat currencies? If you believe that, then there's nothing
Speaker 1: to worry about. Right, there's enough room here for growth
Speaker 1: for ten celsius or the question is is there enough
Speaker 1: to put a trillion dollars out of ten percent interest
Speaker 1: or whatever? So there's no question I said that publicly before.
Speaker 1: If we start managing tens or hundreds of billions of
Speaker 1: dollars or trillion dollars, the the yield will come down.
Speaker 1: It's not gonna come down to zero, it's not. It's
Speaker 1: always going to be more. I guarantee it's going to
Speaker 1: be more than the FED rate. But but um, but
Speaker 1: it's not gonna be eight to nine percent, I agree
Speaker 1: with you. So, and again it's a balanced between stable
Speaker 1: coins and crypto right. So, right now our biggest asset
Speaker 1: is bitcoin. It's probably like something like fifty then another
Speaker 1: thirty percent the stable coins, and then we have atheroreum
Speaker 1: and everything else, right So, so, and I expect next
Speaker 1: year that we will have more stable point than bitcoin
Speaker 1: actually on depositive right. So, so for many people, we
Speaker 1: represent an alternative to the bank. They still don't trust
Speaker 1: the bitcoin network. They don't really understand what the theorem
Speaker 1: stands for. So they're, you know, like, we we want
Speaker 1: to be that safe ground where they can still keep
Speaker 1: one leg at the bank and they can keep one
Speaker 1: leg on a stable coin, and they can get comfortable
Speaker 1: with the rest of the cryptocurrencies, right, but they don't
Speaker 1: have to jump into bitcoin and have all that volatility
Speaker 1: and everything else. And that's fine, that's what no one
Speaker 1: else is doing. Right So, so if we can do that,
Speaker 1: we can bring a hundred two hundred, three hundred million
Speaker 1: people to be comfortable with all that, then it's very
Speaker 1: easy to convince them. It's much easier to convince it
Speaker 1: to five with them percent of their money and bitcoin
Speaker 1: as well, so we're just looking at it a little
Speaker 1: bit differently. We are decentralized company with centralized services, right,
Speaker 1: we do we on both sides of it, unlike defied
Speaker 1: companies or purely decentralized, and they can only serve people
Speaker 1: who are in crypto. Right. So all these things are
Speaker 1: things that we look differently and behave differently because to
Speaker 1: bring the next hundred million people you can do what
Speaker 1: you did in the last ten years, you have to
Speaker 1: do what you need to do in the future. Yeah,
Speaker 1: I'm curious, um, someone who with with your experience of
Speaker 1: building in the technology space, UM, switching gears just a
Speaker 1: little bit. I mean, what do you think, uh, like
Speaker 1: some of the big challenges we have to really getting
Speaker 1: this adoption. You you mentioned how how it's you know,
Speaker 1: much harder to get someone to use bitcoin than it
Speaker 1: was to use the void. Um. Where do you kind
Speaker 1: of see that that adoption roadmap happening in the next
Speaker 1: you know, year, five years whatever. So if we have
Speaker 1: a doomsday scenario, right, if something really bad happens, everybody's
Speaker 1: going to head out to the exits at the same time, right,
Speaker 1: and you're gonna have just a mass adoption every anyone
Speaker 1: who's in this business is gonna have a flood of
Speaker 1: inbound you know. It's like trying to catch ten different
Speaker 1: balls at the same time, right, It's that's what's gonna happen.
Speaker 1: So so in that scenario, we all know everything is wonderful.
Speaker 1: If there's no doomsday scenar If we just go through
Speaker 1: the same thing we're going through right now, we're gonna
Speaker 1: continue on the slow adoption curve. Right We're gonna have
Speaker 1: more and more young people buying into this and lessen this.
Speaker 1: All people deposit money with their old banks. If you
Speaker 1: walk into a bank branch today, you're not gonna see
Speaker 1: any young people there. We know who's putting all the
Speaker 1: money in the bank. So so we we we have
Speaker 1: to have the generational transition, and that's gonna take a
Speaker 1: very long time. And I'm ready for it. I'm not.
Speaker 1: I'm in no hurry. I'm not like, oh my gosh,
Speaker 1: I have to do an exit. I have to going
Speaker 1: on nasdack and go public and sell this to investors.
Speaker 1: The opposite. We're doing the opposite. We're trying to bring
Speaker 1: as many retail people from all over the world. We
Speaker 1: have depositors from all over the world hundred fifty countries,
Speaker 1: only thirty is Americans. It looks like it looks it
Speaker 1: looks like the governments may want to be stepping that
Speaker 1: timetable up. I mean, we see China right now really
Speaker 1: trying to push their own crypto, and I think the
Speaker 1: US probably wouldn't be too far behind. And so, um,
Speaker 1: all of a sudden, now people go will shoot if
Speaker 1: all the money is crypto, what's the difference between this
Speaker 1: U s D or China or yuan or or bitcoin.
Speaker 1: So maybe they'll do some of the marketing and work
Speaker 1: for US, and I hope so. But I still think
Speaker 1: people will trust the JPMorgan coin much more than the
Speaker 1: wild trust a Celsius coin or bitcoin or anything else.
Speaker 1: So I think, look, the US government, I think I
Speaker 1: said this several times before, but these government loves anything
Speaker 1: that's denominated in dollars. They don't like anything that's denominated
Speaker 1: in something else. Right, So they don't like the bitcoin,
Speaker 1: they don't like the etherorium. They kind of frustratingly let
Speaker 1: it be because it's it's a nuisance. It's just this
Speaker 1: little thing that that is that is nothing, right. I mean,
Speaker 1: when you think about the fact that close to nine
Speaker 1: percent of all the trade. International trade is denominating dollars.
Speaker 1: I mean, the entire volume of bitcoin is nothing. It's
Speaker 1: like a few hours worth of international trade. It's not
Speaker 1: even one day of international trade. So it's nothing. It's
Speaker 1: completely irrelevant. But but if suddenly trade starts being denominated
Speaker 1: in these cryptocurrencies and becomes a threat to the United
Speaker 1: States dollar, you know, there's no two ways about it.
Speaker 1: They're gonna shout it down because they don't want anything
Speaker 1: to compete with the dollars. So so I think the
Speaker 1: stable coins, especially once the nominate in dollars, are again
Speaker 1: the bridge to get into that world. It's not going
Speaker 1: to be. The US is not gonna let China with
Speaker 1: its new cryptocurrency go and take over the world. It's
Speaker 1: not gonna let that happen. So and so I think,
Speaker 1: just like they're not gonna let leave what happened, they're
Speaker 1: not gonna get let the Chinese or the Indian or
Speaker 1: anyone else. It's fine if the US it internally, But
Speaker 1: the minute they try to go and denominate oil or gold,
Speaker 1: you're saying, as soon as they started try to start
Speaker 1: to denominate some of this in these other currencies in
Speaker 1: the U S will have a problem, which I agree.
Speaker 1: I agree. Um so it's gonna be interesting to see
Speaker 1: how that plays out. But in the meantime, we'll just
Speaker 1: keep building and totally that's right. Yeah, well it's a
Speaker 1: long time play. I think you say that in a
Speaker 1: lot of your I love you or by the way,
Speaker 1: I love your videos. Okay, even though I can say
Speaker 1: I know of what you say listening to you, you
Speaker 1: deliver it in a very very precise and acute way
Speaker 1: that it makes you think and it makes you kind
Speaker 1: of rehearse what you already now. So kudas, I think
Speaker 1: you're doing a great job for the community. Thank you, Alex,
Speaker 1: Thank you appreciate that. Good. Well, let's go ahead and
Speaker 1: wrap it up. I think I think you've done a
Speaker 1: great job with the community as well. Like I said,
Speaker 1: that's the one thing I always hear, um which I
Speaker 1: don't like. Uh not because I don't like you, but
Speaker 1: I always hear people. Oh. I just I trust Alex.
Speaker 1: I see him out there talking. He seems like a
Speaker 1: great guy, and I just don't like that because I
Speaker 1: want people to understand what they're doing. I made a
Speaker 1: video recently called I said do not buy gold until
Speaker 1: and I got so much hate, like, how could you
Speaker 1: tell people not to buy gold. I I didn't say that.
Speaker 1: I said, don't buy it until you understand what it is,
Speaker 1: how it works into your portfolio, why you would buy it,
Speaker 1: That's all I said. Um So, anyway, you know, I
Speaker 1: think you've done a great job, but I still want
Speaker 1: to ask these questions. So thanks for thanks for answering
Speaker 1: them for everybody. If we can't answer the questions, then
Speaker 1: there's definitely something wrong. So if you can't get a
Speaker 1: straight answer to somebody, then you should walk away. That's
Speaker 1: my That's been my motto, and I'm happy to answer
Speaker 1: any question anyone wants to, uh, you know, send me,
Speaker 1: go on Twitter or on Telegram or anything and thing
Speaker 1: me you can find easily find me and let's build
Speaker 1: this community together. Yeah, all right, thanks so much for
Speaker 1: joining in. Thanks for having me. Hey, if you like
Speaker 1: this episod Code of the Market Disruptors podcast, please help
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