• The company focuses on going against big banks’ business models of giving money back to shareholders
  • Two senior analysts at JPMorgan Chase wrote in a report last week that the staking industry has a total revenue of $9 billion currently but estimates that staking revenue can grow to $40 billion by 2025

Celsius, a digital asset lending company, is launching an Ethereum 2.0 (ETH2) staking pool service within the next two weeks. It will provide its users with rewards and possibly more “ether for their ether,” Celsius CEO Alex Mashinsky exclusively told Blockworks in an interview. 

In recent weeks, the staking industry has made headlines as major businesses estimate multi-billion dollar growth over the next few years. Senior analysts at JPMorgan Chase wrote in a report last week that the staking industry has a total revenue of $9 billion currently but estimates that staking revenue can grow to $40 billion by 2025 through Ethereum upgrades. 

Staking is the action of depositing 32 ether (ETH), for a minimum of two years, to activate validator software. Once activated, it gives validators responsibility for storing data, processing transactions, and adding new blocks to the blockchain. The process, known as proof-of-stake (PoS), helps keep ETH secure for all users, while earning the validator rewards of new ETH in the process, according to the Ethereum foundation.

PoS authority is measured by how many tokens one is holding. So to bootstrap a network, a sizable amount of tokens are needed to be held by a group of people for some time, Blockworks previously reported

When someone stakes their ether (ETH) it converts to ETH2, which gives them the ability to earn rewards. With that said, if users don’t want to contribute 32 whole ETH, they can deposit less ETH and still join in staking pools while holding a smaller stake. 

While there are many staking coins in the crypto space, Celsius offers some of the highest rates in the industry that allows users to earn as high as 17.78% annual percentage yield. The company has combined both lending and staking and blended the two together to create the highest yield for customers, Mashinsky said.

Celsius also allows community members to borrow dollars against their cryptocurrency and earn interest when they deposit and lend crypto out. The company takes about 80% of its income and returns it back to its clients through weekly yield rewards. In the last 12 months, the company has paid users over $369 million in yield, according to its website. 

Customers on Celsius will be able to have two addresses: one where they can either deposit regular etherand earn 5.5% APY and withdraw it at any time or, two, they can take the same ether and deposit it to a different address and go into the ETH2 pool and earn closer to 7.5% but it would be locked until ETH2 launches, Mashinsky said. 

The ETH2 addition to Celsius’ platform is the latest move in the company’s mission to help customers achieve financial freedom, Mashinsky told Blockworks.

Celsius has grown globally from less than 100,000 users to almost 1 million users and about 90% of those customers use the platform for its yield, he said. In the past 18 months, Celsius is up 3900% from about $550 million in assets in January 2020 to $22 billion in assets as of last month. 

The company focuses on going against big banks’ business models of giving money back to shareholders and instead “delivers as much as possible back to the users or depositors,” Mashinsky said. 

Most market players come into the crypto industry from traditional finance backgrounds and bring familiar practices over with them too, but Mashinsky said he’s fighting to make sure that the blockchain won’t become another version of the bank and that as the industry evolves, opportunities build in the “best interest of people on this planet.”

“So many people think so badly about financial systems and the financial players that they’ve given up trying to help themselves,” Mashinsky said. “We want to show them there is a light at the end of the tunnel,” and blockchain and cryptocurrency technology can be used to improve the lives of people around the world, he said.

  • Jacquelyn Melinek is a Houston-based reporter covering digital asset funds and markets. She previously reported on energy markets for S&P Global Platts and Bloomberg News and is published in over 65 news outlets. She graduated from the University of North Carolina at Chapel Hill with a degree in Media and Journalism.