Speaker 1: Hey, guys, welcome to another episode of the Market Disruptors Show.
Speaker 1: I am here with Alex Maschinski from Celsius. He probably
Speaker 1: doesn't need much of an induction introduction, but welcome to
Speaker 1: the show. Alex, Thanks for having me. How are you.
Speaker 1: I'm doing great, Thanks so much for thanks for joining I. Uh,
Speaker 1: like 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: So I founded the Celsius Network with Daniel and two
Speaker 1: years ago, and our mission was too really scale the industry.
Speaker 1: We felt that the industry is kind of stuck, uh
Speaker 1: with a number of viewers or is with like the
Speaker 1: type of people that are in it, and we couldn't
Speaker 1: get to like mass adoption. So we thought that if
Speaker 1: we created a product that acted in the best interest
Speaker 1: of the community and are in the yield, we could
Speaker 1: bring seven and a half billion people to crypto because
Speaker 1: that's what everybody's looking for. So we think that we
Speaker 1: found kind 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 are 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 on 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. Well,
Speaker 1: what if you and me as depositors could get all
Speaker 1: that profits Assaulsius 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, or in the fancy apartment in Manhattan. Yes,
Speaker 1: but I can afford that because it's the right thing
Speaker 1: to do. I think you very rarely in life you
Speaker 1: can do good and do well at the same time.
Speaker 1: I managed to do it several times. If you look
Speaker 1: at 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 IRP before that. Four billion people use that.
Speaker 1: I know most people won't believe it. Just go on
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 without getting sidetracked, but maybe just a
Speaker 1: little bit um, you know, so you know, someone like yourself,
Speaker 1: like you're talking about you kind of have this track
Speaker 1: record 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, and my parents taught me
Speaker 1: from the first day that giving is receiving, right, and
Speaker 1: and uh so I'm a giver, right. I was just
Speaker 1: born that way. I was brought up that way. And
Speaker 1: the more give, the more happy I am. I find
Speaker 1: happiness in that. I don't find any happiness in hoarding
Speaker 1: 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. We earned again six seven
Speaker 1: eight percent on that. If you keep that enough to
Speaker 1: pay all the bills for the company, it's enough to
Speaker 1: pay my bills. Everybody's happy, Yeah, So let's talk about that. So, UM,
Speaker 1: it's been about two years since you launched UM kind
Speaker 1: of launched kind of like right in the crypto boom
Speaker 1: with seventeen or whatever. UM. But even through the downturn
Speaker 1: the bear market, you've continued to grow at a pretty
Speaker 1: rapid pace. What's the growth been like over the last years?
Speaker 1: Wearing the huddle shirt and it was very unpopular. People
Speaker 1: kept coming to me at conferences and saying, isn't it
Speaker 1: time to get rid of this huddle shirt because a
Speaker 1: bit that went down from I think sixteen thousand down
Speaker 1: to thirty It was a very unpopular shirt. Now people
Speaker 1: are saying, where can I get this shirt? Alex, come on,
Speaker 1: give me the shirt. So look ups and downs. The
Speaker 1: Hoddlers stay Hoddlers, right. The people who were sold out,
Speaker 1: as we know, always sell out at the long time
Speaker 1: because of when our emotions come to play unfortu only,
Speaker 1: that's exactly what the traders are prey on. They prey
Speaker 1: on fear, they prey on despair, they prey on you
Speaker 1: losing your uh faith. And I mean, if you're a
Speaker 1: hoddler and you're earning that six or seven percent on
Speaker 1: top of it, that just gives you more comfort to
Speaker 1: that gives you that extra few months that sometimes you
Speaker 1: need to weather the storm. I'm curious from someone like
Speaker 1: you who's kind of been in the technology niche right
Speaker 1: 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 to convince people that they can stop
Speaker 1: using their phone company and they can switch to this
Speaker 1: little company that no one knew back then it was
Speaker 1: called Urbanet and and people laugh at us, They're like,
Speaker 1: I'm never gonna trust you. Who are you? You know,
Speaker 1: like you're nobody and using this weird technology that nobody
Speaker 1: else has, you know, like I we can't trust you
Speaker 1: for anything. Uh So it wasn't easy, right, But that
Speaker 1: convincing people to switch from one phone company to another
Speaker 1: is definitely not as hard as convincing people to deposit money.
Speaker 1: Stop depositing money with City or JP Morgan and giving
Speaker 1: it to you. So I think the bar is much higher,
Speaker 1: and that's why we have that slower adoption. Right. If
Speaker 1: you look at the speed at which the Internet scale,
Speaker 1: we are scaling at one tenth that speed, and part
Speaker 1: of what I dedicating the rest of my life there
Speaker 1: is really make sure that seven billion people have access
Speaker 1: to this because the banks are not going to change
Speaker 1: their way. The politicians are going to change their way.
Speaker 1: The fat just injected two hundred and eighty billion dollars
Speaker 1: and two weeks, right, they creative poof too. I'm an
Speaker 1: eight billion no one that paid any attention to it.
Speaker 1: So when people are gonna realize that all of that
Speaker 1: is hidden inflation that just eats away your money, right,
Speaker 1: We're gonna realize when it's too late. Yeah, if a
Speaker 1: catapult was eating your house, you would go to the
Speaker 1: exterminator and take care of it right away. Well, guess what,
Speaker 1: this caterpillar is eating a dollar and you're not doing
Speaker 1: anything about it. So I think again, bitcoin is the
Speaker 1: best doomsday insurance out there. It's the cheapest doomsday insurance
Speaker 1: out there. And anyone who does not have one to
Speaker 1: five of their money in it doesn't understand what's happening
Speaker 1: every day. Yeah, I'm curious. So, like I said, you know,
Speaker 1: you started in the in the peak of the of
Speaker 1: the boom, and then you built all to the bear market.
Speaker 1: But I've seen other people in the industry, coin Base
Speaker 1: and others like reporting good numbers, like good signaps um good.
Speaker 1: You know, we see a bunch of new wallets coming online,
Speaker 1: hash power super strong. But your business has continue to
Speaker 1: grow as well, right, so, like, can you tell us
Speaker 1: a little bit like what the growth curve may have
Speaker 1: been like over the last you know, eighteen months. Has
Speaker 1: it been kind of steady up or do you take
Speaker 1: a dip? Is are we on a big up trend
Speaker 1: right now? So people are excited about coin based Binance.
Speaker 1: Those are trading businesses right to go up and down
Speaker 1: in volume based on the hype of the trading. We
Speaker 1: consistently make six seven eight percent on our a U M.
Speaker 1: And we from day one we had the same growth.
Speaker 1: We did not have slowed down. We did. We were
Speaker 1: trying to speed it up. We can't do that either.
Speaker 1: It's between a hundred and fifty and two hundred people
Speaker 1: every day, and we got between two and three million
Speaker 1: dollars in deposits every day. And now sometimes I can
Speaker 1: tell you when Binance announced the lottery interest income and
Speaker 1: everybody went to their site and found out that I
Speaker 1: can't actually learn anything. We got fourteen million dollars that
Speaker 1: day and the next day we got like nine million dollars.
Speaker 1: So we We definitely had a rampop because other people
Speaker 1: were trying to copy us, but they didn't deliver, right.
Speaker 1: So but insistently we do two the three million. Our
Speaker 1: average depositors twenty dollars. The average coin Base deposited about
Speaker 1: a thousand dollars. So we have the cream of the
Speaker 1: crop of the crypto community. We have the Hoddler community,
Speaker 1: the coin Base, the Bindance have the trader community, right
Speaker 1: the speculator community. So these are different communities that have
Speaker 1: different behavior and we serve different purposes. Right. Our job
Speaker 1: is to protect to create yield. We always represent the depositor.
Speaker 1: We don't represent the hatch fund. We don't We're not
Speaker 1: a neutral player. I can assure you that coin Base
Speaker 1: cannot look at you in the face and tell you
Speaker 1: I'm always acting in your best interests or binance or
Speaker 1: anybody else. Right, So, I I heard something about a
Speaker 1: new milestone that was passed where you guys have reached
Speaker 1: a record of of assets under management a u M. Right,
Speaker 1: like something about four million or so. Yeah, we just
Speaker 1: crossed the four hundred million. Again, that's a few into
Speaker 1: some pretty rare air up in the up. I think, uh,
Speaker 1: probably one of the problem at least one of the
Speaker 1: biggest funds in all of crypto, I would imagine at
Speaker 1: this point, I think officially puts US as number two,
Speaker 1: right behind the Great Scale. So there were a few
Speaker 1: other people up there, and it looks like we're sucking
Speaker 1: assets up from everybody. Right. So again, if if you're
Speaker 1: not paying your customers uh for depositing assets with you,
Speaker 1: and we are, why would they keep the oussets with you?
Speaker 1: Why wouldn't they swim over? Right? So, so I think
Speaker 1: we've proven over two years that were consistent, we pay
Speaker 1: we you know. The funniest the best thing is that
Speaker 1: we took the worst day of the week, which is Monday,
Speaker 1: and we made it the best day of the week
Speaker 1: because we pay interest. Monday morning, most of our customers
Speaker 1: wake up and there's interest in their uh inbox, you know,
Speaker 1: just waiting for them and a smile and the fifty
Speaker 1: people faces every every Monday morning. Yeah, that's great. So
Speaker 1: that that's a great milestone. Congratulations on that. So you know,
Speaker 1: the business model of paying out know whatever, four or five, six, seven,
Speaker 1: sometimes nine 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 stuff.
Speaker 1: And so I've I've got a lot of feedback from
Speaker 1: from users. A lot of people just say, oh, Alex
Speaker 1: seems like such a great guy. I just trust him
Speaker 1: because I see him talking all the time. But but realistically, um,
Speaker 1: nothing is risk free in life, right, Doing nothing is
Speaker 1: not risk free? Right, as you already said, the worms
Speaker 1: eating the house. If I leave my money in the bank,
Speaker 1: I know I'm losing money there. Um, So we know
Speaker 1: there's risk, but um, I know some of it is
Speaker 1: counterparty risk. And so you're taking that money loaning it
Speaker 1: out to earn income. Uh. Some of the things I've
Speaker 1: heard would be that, like you loaned the bit fin x,
Speaker 1: and bit fin x is potentially going to be in
Speaker 1: trouble with the n Y, you know, a g over
Speaker 1: tether and whatnot. What can you say about something like that.
Speaker 1: So we we loaned to about Institute France, we loan
Speaker 1: to bit fin x, We loan to many others, and
Speaker 1: for each one of them we have a risk profile.
Speaker 1: So we don't lend anybody unless we on board. Then
Speaker 1: we do full ky CML. We get to see their
Speaker 1: balance sheet, and we get to understand what the risk
Speaker 1: is because we represent the community right if if if
Speaker 1: we make a mistake, we have to pay for it
Speaker 1: from our treasury and make the community good. Right. So
Speaker 1: so we have a counterparty risk. In this case, the
Speaker 1: counterparty would be bit fin x, or it would be
Speaker 1: a trading firm mostly hedge funds or other major Wall
Speaker 1: Street firms that trade in bitcoin, and specifically to bit
Speaker 1: fin x. We have seen assurances from them in the
Speaker 1: form of audited financials, in the form of their uh
Speaker 1: deposit on hand, in the form of their insurance. That
Speaker 1: makes us feel that we can trust them with some
Speaker 1: of our assets. Now we also bore from them, so
Speaker 1: at anytime we try to balance that risk, meaning the
Speaker 1: amount and we give them. We may give them ripple,
Speaker 1: or we may give them a life coin. Most people
Speaker 1: think we give them bitcoin, but bitfin x pay is
Speaker 1: less than one percent a year on bitcoin, so obviously
Speaker 1: we're paying four and a half percent, so you can't
Speaker 1: make four and a half percent if you land at
Speaker 1: one percent. We don't land bitfinex any bitcoin, but the
Speaker 1: coins that they do want where we can earn a
Speaker 1: nice heel. We then borrow other things with them, we
Speaker 1: borrow other assets that offset the risk, meaning if they
Speaker 1: default for any reason, we hold enough assets where we
Speaker 1: have zero risk or zero exposure. And we do that
Speaker 1: with everybody like we, you know, even like we we
Speaker 1: land and bore from Galaxy Digital for example, and at
Speaker 1: any time we have a net zero exposure in most
Speaker 1: cases with them and with other major institutions. Galaxy Digital
Speaker 1: is a public company. You can see their assets, so
Speaker 1: it's very easy for you to know, for you, meaning
Speaker 1: for Celsius, to know what's our risk exposure and manage
Speaker 1: that properly. So um, your bank, any bank did you
Speaker 1: deposit dollar was, does the same thing. If you happen
Speaker 1: to uh the bank. For example, with Deutsche Bank, they'll
Speaker 1: leverage fifty two one, meaning they took for every dollar
Speaker 1: that you gave them a deposit, they lent out fifty
Speaker 1: dollars out there, and so they have tremendous We We
Speaker 1: never have more than one to one leverage, So we
Speaker 1: are under leverage compared to any bank or any major
Speaker 1: financial institution in the United States. So it would be
Speaker 1: hard for me to say we're less risky because we're
Speaker 1: not a D A C insured and we're not all
Speaker 1: these other things, but we're definitely less much less leverage
Speaker 1: than most of these guys you're talking about most of
Speaker 1: the other financial institutions that people think are safe havens.
Speaker 1: So really, then, I mean, whether it's bit fin X
Speaker 1: or any other number of people, I mean, it's always
Speaker 1: counterparty risk. So if I loan money to you, I
Speaker 1: know you and I've talked to you. But when I
Speaker 1: 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 fin X
Speaker 1: and lend them XRP directly and earned twenty more than
Speaker 1: what we pay you. Out Right, you can bypass us
Speaker 1: go directly to any of these institutions, but you will
Speaker 1: have to create a hundred a D the relationship, you're
Speaker 1: gonna have to do p CML and all of them.
Speaker 1: You're gonna have to manage the accounter party risk and
Speaker 1: everything else. So if you think about us just charging
Speaker 1: for that, I think that is definitely a reasonable uh
Speaker 1: kind of it's a fair deal for both sides, right,
Speaker 1: that's what we're trying to say. What about what about
Speaker 1: regulatory risk? So that would be something also, right, So
Speaker 1: let's say that, um, the regulators, whoever they may be
Speaker 1: right there, they're very unclear on what's going on. So
Speaker 1: they want to come in and freeze your accounts because
Speaker 1: of the cell token, or because you did business with tether,
Speaker 1: or because any number of reasons. So what kind of
Speaker 1: what do you think about that risk? Full disclosure? We
Speaker 1: are filed reg D with SEC where fins and registered.
Speaker 1: If you check all the other people that do this
Speaker 1: kind of stuff in the business or based in the
Speaker 1: Seychelle Islands, or based in in Malta or based in
Speaker 1: the b v I or whatever, you would see that
Speaker 1: none of them have any SEC filings of FINS and filing.
Speaker 1: So we actually work with regulators. We work with enforcement
Speaker 1: agencies when they need to find certain assets and they're
Speaker 1: trying to track different accounts. If somebody comes to us
Speaker 1: and 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 Neils 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 a twenty four million all find
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 k y C. Let's do And
Speaker 1: that's part of what slows our growth. I mean, we
Speaker 1: have we have a hundred and twenty thousand downloads and
Speaker 1: we only had forty five thou people that pass y.
Speaker 1: So we pay for it in the form of not
Speaker 1: admitting tens of thousands of people. We either don't know
Speaker 1: how to do it or they'll get scared when we
Speaker 1: ask them for the social security or for their driving license.
Speaker 1: So 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're only promising midsin
Speaker 1: single digits. We're not trying to get right. So we're
Speaker 1: trying to balance the risk with providing great security blanket
Speaker 1: for the entire critical community that that uses us. So
Speaker 1: if I'm a potential user and I'm looking at this
Speaker 1: and saying, shoot, I'd like to make some percent rich
Speaker 1: earning my crypto or stable coin um and I want
Speaker 1: to do my due diligence or whatever, what, what would
Speaker 1: you say is the number one risk that I should
Speaker 1: be 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 or not. There's
Speaker 1: 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 Celsian's
Speaker 1: that network that colm sorry, that is a website that
Speaker 1: is managed by the community that has 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 so 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, Pope, poking us and saying, well,
Speaker 1: this number is not exactly what you said, because it's
Speaker 1: not exactly eight percent, right. Sometimes it's seventy nine point
Speaker 1: six and sometimes it's eighty two point two, right, the
Speaker 1: numbers fluctuate, but we try to keep it at that
Speaker 1: eighty percent level of giving back to the community. So
Speaker 1: all these things are the question is is Celsius acting
Speaker 1: in the best interests of everybody in our community or
Speaker 1: celsis 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, our 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: Some people we may have to deliver for ten years
Speaker 1: before they trust us, right, Yeah, well, I mean the
Speaker 1: longer that you do, like you said, building that reputation
Speaker 1: is what it takes. So 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. You using your coins now very recently, like
Speaker 1: two weeks ago, three weeks ago there, and now it's
Speaker 1: gonna start paying interest. Well, they're paying only to two hundred,
Speaker 1: the first two hundred people who pressed the butt in
Speaker 1: the computer, right, So like an auction, they only have
Speaker 1: a million seven worth of deposits that they take every
Speaker 1: two weeks, which is about two hundred people, you know,
Speaker 1: and they have two million customers. So how exactly is
Speaker 1: everybody gonna get to our own interest? So again, it's
Speaker 1: just a gimmick. It's more of like a promo to
Speaker 1: try to keep people from leaving the exchange. But I
Speaker 1: called Sizy on it, right. I I asked Ciz to
Speaker 1: do just a good job for his depositor as it
Speaker 1: does for himself, holding being being paying himself all those dividends.
Speaker 1: I'm curious, Um, one more thing you had mentioned. Uh,
Speaker 1: you'd mentioned that you have like a treasury fund, and
Speaker 1: if one of your one of your positions took a loss,
Speaker 1: you'd have to come out of the treasury fund. And
Speaker 1: so you've already talked about how you kind of distribute
Speaker 1: about a hundred eighty different borrowers um, and then you
Speaker 1: have the treasury fund to back up a potential loss. Um.
Speaker 1: Is that is that the way it kind of works.
Speaker 1: I mean, our people kind of have some faith and
Speaker 1: maybe we can see the treasury funds and we know
Speaker 1: that you're willing to take a little bit of a
Speaker 1: loss before you pass it on to everybody else, socialize
Speaker 1: that loss. Yeah, So you know, I tweeted that a
Speaker 1: few weeks ago. I said, while other exchanges of socializing losses,
Speaker 1: we're socializing profits, right. The socialized it is, so we
Speaker 1: we have not had to socialize anything besides the interest distribution.
Speaker 1: Every week since we launched for almost two years, right,
Speaker 1: every Monday, like a clock work, we pay interest. The
Speaker 1: interest varies based on what we earned, but we pay
Speaker 1: it every Monday, right, and if we earn zero, we
Speaker 1: would pay zero. We're not fabricating the numbers. I can
Speaker 1: tell you that all of our competitors coin and not
Speaker 1: coin based, but Block five and next so and salt
Speaker 1: and and the crypto dot com, they all subsidizing it
Speaker 1: from their treasure. They're not earning anything, right, so and
Speaker 1: the block A specifically said that publicly on Block TV, admitting,
Speaker 1: oh yeah, we just use our investors money to pay
Speaker 1: your interest. So those are not sustainable business models, right.
Speaker 1: I mean, what Celsius did is created We invented this business. Right.
Speaker 1: We basically engineered a 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 depositors. All right, now, UM, I know you know,
Speaker 1: so I kind of dug into some of the risks
Speaker 1: and the problems, and I appreciate you taking the time
Speaker 1: to answer that I did think I see, I think
Speaker 1: I saw recently that um light Coin or light Coin
Speaker 1: Foundation had asked you to actually manage some of their funds. Yes,
Speaker 1: we announced that they selected us for their treasury management.
Speaker 1: They also recommended us to their community, so they basically
Speaker 1: went out and said, look, we looked at all the players,
Speaker 1: we think Celsius is the best solution for our community.
Speaker 1: And again, our job is to make sure that we
Speaker 1: give enough UH income to the like Coin Foundation that
Speaker 1: they can perform their tasks right I mean when they
Speaker 1: deposit these coins with this without exchange, they get nothing back, right,
Speaker 1: And suddenly now they have enough income where they can
Speaker 1: pay the salaries that can pay some of the develop
Speaker 1: oppers and all that is great for the foundation. Right.
Speaker 1: So I think this is the kind of stuff that
Speaker 1: I think our industry needs to do more where we
Speaker 1: all help each other. Instead of replacing the banks with
Speaker 1: new toll collectors called buyance or other guys who just
Speaker 1: keep taking money out and giving it to Wall Street folks,
Speaker 1: right or too investors, how about we we distribute all
Speaker 1: that value internally. So I think nothing I'm saying is
Speaker 1: new or different, just that no one is doing it.
Speaker 1: Everybody around us is a toll collector, and they catch
Speaker 1: us on the way in, right, They charge is four
Speaker 1: or five to buy the bitcoint They catch us on
Speaker 1: the way out. They catch us when we trade. Every
Speaker 1: time we make a move, we have to pay a
Speaker 1: big to some landlord who is taking that money out
Speaker 1: and giving it to the VC or the investor or whatever.
Speaker 1: It's never back to the community. The model Celsis created,
Speaker 1: almost all of it is going back to the community. Now,
Speaker 1: I would think that you know, as you said, everybody's
Speaker 1: kind of jumping in. Everybody's doing it, maybe behind scenes,
Speaker 1: without transparency, everyone's jumping into it. Um. You're obviously growing.
Speaker 1: Celsie is growing at a at a very rapid rate.
Speaker 1: I would think at some point, like the larger you get,
Speaker 1: the larger the Indias industry gets, the harder it gets
Speaker 1: to get that yield. Is there some risk They're like,
Speaker 1: maybe there's a ceiling on the business, or uh, your
Speaker 1: business becomes more risky as you get to a larger
Speaker 1: A U. M. That's a great question because the question
Speaker 1: is do you believe in the vision, right? I mean,
Speaker 1: do you believe that cryptocurrencies of the future. I mean
Speaker 1: are they going to replace fiat currencies? If you believe that,
Speaker 1: then there's nothing to worry about. Right, there's enough room
Speaker 1: here for growth for ten celsius or the question is
Speaker 1: is there enough to put a trillion dollars out of
Speaker 1: ten percent interest or whatever? So there's no question I
Speaker 1: said that publicly before. If we start managing tens or
Speaker 1: hundreds of billions of dollars or trillion dollars, the the
Speaker 1: yield will come down. It's not gonna come down to
Speaker 1: zee or it's not. It's always gonna be more. I
Speaker 1: guarantee it's gonna be more other than the FED rate.
Speaker 1: But but um, but it's not gonna be eight or
Speaker 1: nine percent, I agree with you. So and again it's
Speaker 1: a balance between stable coins and crypto. Right. So, right
Speaker 1: now our biggest asset is bitcoin. It's probably like something
Speaker 1: like then another thirty percent is stable coins, and then
Speaker 1: we have atheroreum and everything else, right so, so and
Speaker 1: I expect next year that we will have more stable
Speaker 1: coin than bitcoin actually on the deposit. Right. So, so
Speaker 1: for many people, we represent an alternative to the bank.
Speaker 1: They still don't trust the bitcoin network. They don't really
Speaker 1: understand what the THEORYM stands for. So they're, you know, like,
Speaker 1: we we want to be that safe ground where they
Speaker 1: can still keep one leg at the bank and they
Speaker 1: can keep one leg on a stable coin and they
Speaker 1: can get comfortable with the rest of the cryptocurrencies, right,
Speaker 1: but they don't have to jump into bitcoin and have
Speaker 1: all that volatility and everything else. And that's fine, that's
Speaker 1: what no one else is doing, right So, so if
Speaker 1: we can do that, we can bring a hundred two hundred,
Speaker 1: three hundred million people to be comfortable with all that
Speaker 1: then it's very easy to convince them. It's much easier
Speaker 1: to convince them to put five with them percent of
Speaker 1: their money and bitcoin as well. So we're just looking
Speaker 1: at it a little bit differently. We are decentralized company
Speaker 1: with centralized services, right, we do we on both sides
Speaker 1: of it, Unlike defied companies are purely decentralized and they
Speaker 1: can only serve people who are d percent in crypto. Right.
Speaker 1: So all these things are things that we look differently
Speaker 1: and behave differently because to bring the next hundred million people,
Speaker 1: you can do what you did in the last ten years,
Speaker 1: you have to do what you need to do in
Speaker 1: the future. Yeah, I'm curious, um, someone who with with
Speaker 1: your experience of building in the technology space, um, switching
Speaker 1: gears just a little bit. I mean, what do you think,
Speaker 1: uh like some of the big challenges we have to
Speaker 1: really getting this adoption. You you mentioned how how it's
Speaker 1: you know, much harder to get someone to use bitcoin
Speaker 1: than it was to use the void. Um, where do
Speaker 1: you kind of see that that option roadmap happening in
Speaker 1: the next you know, year, five years whatever. So if
Speaker 1: we have a doomsday scenario, right, if something really really
Speaker 1: bad happens, everybody's going to head out to the exits
Speaker 1: at the same time, right, and you're gonna have just
Speaker 1: a mass adoption. Every anyone who's in this business is
Speaker 1: gonna have a flood of inbound you know. It's like
Speaker 1: trying to catch ten different balls at the same time, right,
Speaker 1: It's that's what's gonna happen. So so in that scenario,
Speaker 1: we all know everything is wonderful. If there's no doomsday scenaria.
Speaker 1: If we just go through the same thing we're going
Speaker 1: through right now, we're gonna continue on the slow adoption curve. Right,
Speaker 1: We're gonna have more and more young people buying into
Speaker 1: this and lessen this old people deposit money with their
Speaker 1: old banks. If you walk into a bank branch today,
Speaker 1: you're not gonna see any young people there. We know
Speaker 1: who's putting all the money in the bank. So so
Speaker 1: we we we have to have the generational transition, and
Speaker 1: that's gonna take a very long time. And I'm ready
Speaker 1: for it. I'm not. I'm in no hurry. I'm not like,
Speaker 1: oh my gosh, I have to do an exit. I
Speaker 1: have to go on Nasdack and go public and sell
Speaker 1: this to investors. The opposite. We're doing the opposite. We're
Speaker 1: trying to bring as many retail people from all over
Speaker 1: the world. We have depositors from all over the world,
Speaker 1: hundred fifty countries. Only thirty is Americans. It looks like
Speaker 1: it looks it looks like the governments may want to
Speaker 1: be stepping that timetable up. I mean, we see China
Speaker 1: right now really trying to push their own crypto, and
Speaker 1: I think the US probably wouldn't be too far behind.
Speaker 1: And so, um, all of a sudden, now people go
Speaker 1: will shoot if all the money's crypto, what's the difference
Speaker 1: between this U s D or China or yuan or
Speaker 1: or bitcoin. So maybe they'll do some of the marketing
Speaker 1: and work for US, and I hope so. But I
Speaker 1: still think people will trust the JP morgan coin much
Speaker 1: more than the old trust a Celsius coin or bitcoin
Speaker 1: or anything else. So I didn't look the US government.
Speaker 1: I think I said this several times before, but these
Speaker 1: government loves anything that's denominating hours. They don't like anything
Speaker 1: that's denominated in something else. Right, So they don't like
Speaker 1: the bitcoin, they don't like the etherium. They kind of
Speaker 1: frustratingly let it be because it's it's a nuisance. It's
Speaker 1: just this little thing that that is that is nothing, right.
Speaker 1: I mean, when you think about the fact that close
Speaker 1: to nine percent of all the trade, international trade is
Speaker 1: denominating in dollars, I mean, the entire volume of bitcoin
Speaker 1: is nothing. It's like a few hours worth of international trade.
Speaker 1: It's not even one day of international trade. So it's nothing.
Speaker 1: It's completely irrelevant. But but if suddenly trade starts being
Speaker 1: denominated in these cryptocurrencies and it becomes a threat to
Speaker 1: the United States dollar, you know, there's no two ways
Speaker 1: about it, they're gonna shout it down because they don't
Speaker 1: want anything to compete with the dollars. So so I
Speaker 1: think the stable coins, especially one's nominate in dollars, are
Speaker 1: again the bridge to get into that world. It's not
Speaker 1: going to be the US is not gonna let China
Speaker 1: with its new cryptocurrency go and take over the world.
Speaker 1: They're just not gonna let that happen. So and so
Speaker 1: I think, just like they're not gonna let Libra happen,
Speaker 1: they're not gonna get let the Chinese or the Indian
Speaker 1: or anyone else. It's fine if the user internally, but
Speaker 1: the minute they try to go and denominate oil or gold. Yeah,
Speaker 1: there you go. You just you kind of froze for
Speaker 1: a second. But you're saying, as soon as they started
Speaker 1: trying to start to denominate some of this in these
Speaker 1: other currencies in the U S will have a problem,
Speaker 1: which I agree. I agree. Um So it's gonna be
Speaker 1: interesting to see how that plays out. But in the meantime,
Speaker 1: we'll just keep building and totally that's right. Yeah, it's
Speaker 1: a long time play. I think you say that in
Speaker 1: a 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 a cute
Speaker 1: way that it makes you think and it makes you
Speaker 1: kind of rehearse what you already now. So Kudas, I
Speaker 1: think you're doing a great job for the community. Thank you,
Speaker 1: Thank you, appreciate that. Good. Well, let's go ahead and
Speaker 1: wrap it up. I think, uh, I think you've done
Speaker 1: a 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 you. 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: I think you've done a great job, but I still
Speaker 1: want to ask these questions. So thanks for thanks for
Speaker 1: answering them for everybody. If we can't answer the questions,
Speaker 1: then there's definitely something wrong. So if you can't get
Speaker 1: a straight answer to somebody, then you should walk away.
Speaker 1: That's my That's been my motto, and I'm happy to
Speaker 1: answer 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 and let's
Speaker 1: build this community together. Yeah, all right, thanks so much
Speaker 1: for joining in. Thanks for having me