The Celsius Network is composed of hosted accounts on Celsius and a variety of crypto exchanges intending to minimize the transfer of crypto-assets outside its system.

Ultimately, there are four key players within Celsius system:

• Lenders – Depositors who earn interest on their accounts holdings
• Borrowers – Margin traders who wish to take leveraged short or long positions
• Celsius Platform – Facilitates trades, manages risk, and determines trading fees
• External exchange markets – Executes trades and borrows/provides liquidity

 

Earning

To earn extra income using the Celsius network, participants deposit crypto assets on the platform and earn rewards on a number of cryptocurrencies, such as Bitcoin, Ethereum or USDC. 

Celsius manages deposited funds in a ‘Lending Stake Pool,’ subsequently lent to external exchanges, and the interest received is distributed among the users. 

To determine the distribution paid to lenders, Celsius uses a modified Proof-of-Stake (PoS) formula where the interest paid to lenders is a function of the funds deposited and the amount of days participating in Celsius’ consensus mechanism. 

 

Borrowing

There are a few types of users who may wish to borrow through the Celsius platform.

• General Users – Users who deposit crypto on the Celsius Network and using the funds as collateral to receive a loan.
• Traders – Accredited investors (or SEC registered funds) who borrow capital from Celsius lending pools to trade. These accounts require a minimum balance of $10k to cover potential losses and fees that occur in certain trading activities. 
• Exchanges – Institutions who borrow from Celsius lending pools should they need the added liquidity to settle trades.