The Best of Both Worlds: How Celsius Straddles Both CeFi and DeFi

Most of the money in the world still lives in centralized bank like systems, we need to build bridges between CeFi and DeFi if we are to bring so many new people to Crypto.

Alex Mashinsky
4 min readJan 26, 2021

Not even a month into the new year, and we’re already back on the Bitcoin rollercoaster! After hitting an all-time high on New Year’s Day, the rising Q4 Bitcoin tide has started to ebb, and skeptics are again predicting that the sky is falling. And I don’t blame them! With this new year comes a new presidential administration and new uncertainties on policy outlook. It’s only natural for investors to assess where cryptocurrencies stand after such a confusing and uncertain 2020.

I, for one, am not panicking. We’ve told our users for weeks now that we expect to see a correction early Q1 before seeing new highs towards the second half of the year.

Celsius is starting 2021 on an incredible footing. Last week, we announced that we crossed $5.3B in assets, a 10X year-over-year growth. We have acquired more than 125,000 new clients in 2020, totaling over 340,000 active users worldwide. As I mentioned in a previous blog post, crypto is getting way too big to ignore.

Additionally, As predicted we’re extremely pleased to see Ethereum reach new all-time highs this week. As many of you may know, Celsius CEL token uses Ethereum blockchain, and our community certainly deserves credit for the ongoing interest we have created for DeFi and the Ethereum ecosystem. Last November we announced our contribution of 25,000 ETH to Ethereum 2.0, giving it enough funds to meet its launch goal and launch ETH2 on time.

Because we’re in this period of rapid growth, with new users flocking to cryptocurrency on a daily basis, I wanted to highlight one of the constants that have set Celsius apart from other companies since the very beginning. Unlike most other lenders Celsius straddles both realms of Centralized (CeFi) and Decentralized Finance (DeFi). What does that mean? For one, it allows us to act in our community’s best interest by deploying assets to institutions, retail, exchanges and DeFi and thus offering the highest rates, supporting the most asset types, and paying more interest on more tokens and coins for longer than anyone else.

But first, some context.

What is CeFi?

Centralized Finance or “CeFi” is similar to your bank, but the Celsius version actually acts in your best interests. CeFi platforms allow users to earn interest or get loans by lending or borrowing it through a centralized trusted entity or a corporation. These corporations are responsible for the success of their products and their clients’ well-being, so you have to trust people behind them with your funds.

The biggest advantage of CeFi is that it eliminates the need to be a DeFi expert, know how to manage keys, who to trust, when to deploy and when to exit. Celsius provides up to 80% of the value back to our CeFi customers so you are paying 20% of the high yield for this service.

What is DeFi?

Decentralized finance, or “DeFi”, is the ecosystem of financial applications (dApps) enabling anyone with an Internet connection to access a variety of products and services spanning crypto exchanges, margin trading, financial derivatives, algorithmic trading, and lending markets.

Most of the DeFi applications are built on top of the Ethereum blockchain and use Ethereum’s smart contracts — programs that automatically execute transactions if certain conditions are met. It allows replacing intermediaries such as banks that manage lending in the middle.

Celsius allows DeFi users to earn more by deploying across DeFi and non-DeFi platforms

By blending DeFi and Non-Defi yield sources, Celsius delivers higher overall performance to its customer base.

How does Celsius straddle both?

Celsius is one of the innovators of Decentralized Finance by utilizing the same smart contracts and open ledgers to allow users to earn the highest yield on their crypto assets. At the same time, Celsius is aggregating custodial wallets that allow borrowing and earning yield for our users. We support 45 different assets many of which are not compatible with ERC20 or ETH2 infrastructure but can still earn yield on our platform.

Because we actively manage our 350,000 user’s assets day in and day out on multiple platforms and deploy in large chunks we minimize gas fees and are one of the safest yield earning platforms in crypto, and very friendly to new users.

Why Did Celsius Pioneer The CeFi and DeFi combo?

Since 2017 Celsius has established a key role in CeFi and DeFi for one main reason- To provide consistent yield and store of value for the next 100m people.

Everyone deserves the opportunity to increase their financial freedom through yield on the blockchain. Understanding DeFi is complex, but it’s an excellent opportunity for everyone to invest and earn yield. Why should that be reserved only for those who can decipher the complexities of DeFi or have time to trade all day?

Our philosophy at Celsius has been to build a bridge between CeFi and DeFi. In other words, we are enhancing DeFi as a financial tool for not just some, but ALL!



Alex Mashinsky

Founder of @CelsiusNetwork | Transit Wireless| Arbinet | Tech Innovator with over 50 patents and awards