[CEL Token] Collateral Factor Change 0% to 25% on Ethereum

Summary

This proposal aims to increase the collateral factor of CEL token from 0% to 25% on Ethereum to the benefit of both the C.R.E.A.M. and Celsius communities.

For:

Increase the collateral factor of CEL from 0% to 25%.

Against:

Do nothing.

Asset Details:

Coingecko: https://www.coingecko.com/en/coins/celsius-network-token
Uniswap DEX: Uniswap Info
Collateral Factor Change: CEL 0% to 25% collateral factor on Ethereum

Motivation

CEL token was listed on C.R.E.A.M. in October 2020. At the time of writing this proposal there are approximately 34,900 tokens locked on the platform equal to ~$445K USD. The number of CEL locked on the platform have have fluctuated as low as 4,800 and as high as 446,000; indicating demand to lend/borrow from the Celsius community. See Exhibit A.


Exhibit A: Amount of CEL locked in C.R.E.A.M. from Oct. 2020 to Oct. 2021.
Source: https://etherscan.io/token/0xaaaebe6fe48e54f431b0c390cfaf0b017d09d42d?a=0x8b3ff1ed4f36c2c2be675afb13cc3aa5d73685a5#tokenAnalytics

Over the same period, the CEL token has appreciated +330% in value (from $1.29 to $5.58) and daily trading volume has also grown +330% (from $3M to $13M volume). CEL token is currently valued at $2.2B and ranked #62 according to Coingecko (based on 423M/695M circulating supply). See Exhibit B below.


Exhibit B: Cel Token Price and Volume have grown from Oct. 2020 to Oct. 2021.
Source: https://www.coingecko.com/en/coins/celsius-network-token

How does increasing the CEL collateral factor benefit the C.R.E.A.M. protocol and community?

Additional Protocol Fees:
There is already $445K USD worth of CEL locked on C.R.E.A.M. and it would be reasonable to expect CEL lending/borrowing activity to increase if the collateral factor is increased. This would benefit iceCREAM holders because the additional lending/borrowing volume would result in additional protocol revenue.

First Mover Advantage:
Currently CEL token is not listed on other lending markets such as AAVE or COMPOUND. By being a first mover, iceCREAM holders would earn all the revenues from CEL lending/borrowing and not have to share them with other platforms.

We appreciate the C.R.E.A.M. community for taking the time to review our proposal and we look forward to reading your reply. We would be happy to answer any questions in the discussion field below!

8 Likes

It would make sense to increase the collateral factor to at least 25%. The volatility on CEL is so low it roughly looks like a stablecoin over the last 9 months during a very volatile market. It would be very low risk with the collateral factor at 25%, especially since the company performs buybacks on the CEL token with internally generated profits which provides a floor on the CEL price.

4 Likes

Based on $CEL stability I believe the proposal would be very beneficial.

1 Like

As mentioned, the history of stability of the CEL token would make 25% LTV loans a safe bet. Definitely in favor!

1 Like

Will be following the conversation. I’m interested to see this proposal go through.

1 Like

Could we perhaps include some kind of collateral cap in this proposal? I think for centralized assets like FTT and now CEL, this makes a lot of sense for the overall security of the CREAM protocol.

Definitely would love to see this proposal pass, but Celsius has a ton of CEL in their treasury, and it would be a significant security risk for CREAM to have too much of their collateral from one asset as we saw in the past with FTT.

1 Like

Cel is a fundamentally great token and the increased collateral would benefit both communities.

1 Like

Yes it makes a lot of sense. I would support CEL being Utilised for 25% collateral.

1 Like

In support of this proposal. Fundamentally one of the best projects in crypto.
Increasing collateral factor to 25% would greatly support CREAM and the Celsius community.
Following the progress of this. Good luck!

1 Like

CEL is largely stable and I support this proposal.

1 Like

I am fully in support of this proposal. The CEL token has proven itself as a very stable asset over time. Increasing collateral factor to 25% would greatly support CREAM and the Celsius community.

1 Like

I fully support this proposal. Cel has great fundamentals; and the increased collateral would benefit both communities.

1 Like

I agree with a proposal, cell token is very secure and stable. I believe it will be a beneficial move that is suggested.

1 Like

I agree with all points outlined above. CEL has proven to be consistent. I hope this proposal passes.

1 Like

I support this proposal. CREAM can enhance liquidity and revenue by allowing increased borrowing against one of the leading CeFi lending platforms. And the risk of CEL token has come down as Celsius as grown, which warrants a higher LTV limit. I think this proposal would benefit the community.

1 Like

Celsius is an excellent crypto with low downside risk with a lot of upside reward when it does go up in value.

1 Like

I’m in favor of this! Let’s do it!

1 Like

I’m all for it. Make it happen.

1 Like

This is a fair point. The current proposal is to have $1.25M Collateral Cap and 45% Collateral factor.
These are reasonable parameters to start and proposals can be made to modify in the future :slight_smile: .

I think there’s real value in being ahead of AAVE and/or COMPOUND, assuming the project is valid. Celsius seems to be the “real deal” and doesn’t pay for marketing / exchanging listings the way that many others do (in order to “fake how successful their project is”).

Celsius is rock solid, has a bright future, and I feel the opportunity to list ahead of other solutions is greater than the potential downside of getting ahead of the pack on a lame horse.