Centralization and always not being completely honest in their operation is a thing in the world, this is something we are currently seeing in the crypto industry. Celsius, Nexo and BlockFi are crypto lending platforms that rewards you for lending your assets. The whole crypto market this week has been like a scene in the avengers end game. The Bear Market is thanos and every coin in the market is trying their best to stay alive while thanos(Bear Market) is coming for every one.
Celsius has halted withdrawals because they can’t sustain the massive withdrawals and it’s time they sustain their liquidity. Angry investors had a quick action and decided to tank the value of Celsius native token. Imagine losing 70% of your token value after taking a general bear hit. The all time of high of CEL, was $3.4, before the halt of withdrawal announcement it was $0.45, after the announcement it became $0.1.
Nexo which is another company that is into crypto lending decided to help Celsius buy out its assets to provide liquidity, just so they can have liquidity to allow withdrawals continue. But these companies always make their customers seem like they have a lot of money in reserve to sustain withdrawals.
What people don’t know is these companies are as centralized as the banks, they are not different from the bank, the difference between them and the bank is that while banks deal with fiat, they deal with crypto. Whenever you deposit your assets on these platforms, they invest them and give you interest. They pay you in their CEL tokens, these are incentives to allow customers or investors leave their assets on their platforms.
Terms & Conditions
Remember when coinbase was called out for a statement that had some clause regarding owning holders assets should incase they go bankrupt, guess what, seems like celcius had same in their terms of use. According to a blog by blockworks they claim that Celcius term of use has this:
But terms of use like this is expected when it’s a centralized platform, a decentralized platform like hive don’t have terms and conditions. Besides no one owns it, you are responsible for your investment. You can leave your money in HBD savings and withdrawals can’t be halted. This is another day to remind you to choose decentralization and choose hive.
I wish more people knew about Hive and the beautiful possibilities and opportunities that come with the blockchain.