Intro

This crypto winter has been the death blow for many centralized lender platforms including Celsius which recently filed for bankruptcy. Celsius is a popular decentralized finance (DeFi) lending platform that pays high returns on customer deposits. Most recently, Celcius had around $11.8 billion in assets, offers interest-bearing products to customers who deposit cryptocurrencies with its platform. It then lends out cryptocurrencies to earn a return paying up to 8% on stablecoins and up to 18% APY on other tokens.

Due to a series of losses in risky investments and hacks, it has come to light that Celsius is deeply insolvent and won’t be able to return customer funds. It suffered a series of severe losses including over 38,000 ETH in a blunder related to Stakehound, followed by a $22 million loss in connection with the Badger DAO hack.

What is Celsius Token (CEL)

Launched in June 2018, the CEL token underpins the Celsius Network's earning and reward systems. Initially, only 50% of the tokens were issued, with 25% going to the founding team and the remaining locked in a smart contract. According to project details, the locked tokens will enter circulation when CEL maintains a market value of $1.50 for longer than 10 days, and again when it exceeds $3 for 30 days.

Utilization of the CEL token affords each Celsius user group unique benefits:

Earners: By accepting rewards in the form of CEL tokens, earners receive up to 30% more rewards on all deposits of non-CEL tokens.
Borrowers: By paying interest with CEL tokens, borrowers receive up to a 30% discount on interest payments.
Institutions: By paying interest with CEL tokens, institutions borrowing tokens from Celsius receive a 30% discount on their interest payments.

The reward percentages originate from the Celsius loyalty program, which refers to each user's CEL holdings. For instance, the Bronze reward level requires 5-10% of your portfolio to reside in CEL, Silver requires 10-15%, Gold requires 15-20%, and Platinum requires 20-100%. CEL's most beneficial use is for earning compound interest, especially if you can maximize rewards through a substantial allocation of CEL in your portfolio.

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Analysis - CEL Token

In this analysis, we’re looking at the usage patterns of the CEL token in the last 3 months. We’re looking at how the swap volume has changed and who’s been transferring these tokens.

Swap Volume - 90d

> NOTE: Here a positive number means CEL being bought (Swap to) and negative means CEL being sold (Swap from)

First metric we’re looking at is the weekly swap volume in the past 90 days. This gives us insight into how users have been using CEL in this period of turmoil.

We can notice that we’re seeing large selloffs in the weeks of Terra and 3AC crash (May 8th and June 19th). The selloffs reached nearly $200K.
In the weeks since, the sell offs have been smaller and we’ve even had net positive/buy action for the week.
There’s been almost no swap volume on Sushiswap. Most of the swaps have taken place on Uniswap v3 and on v2 to a lesser amount.

Monthly Swap Volume - Zooming out

If we zoom out beyond the 90 days, we can see the patterns going all the way back to July 2020. Here we make the following observations:

Since April 2021, Uniswap v3 has been the dominant platform.
The selling peaks on Uniswap v3 have been nearly 2x that of Uniswap v2 ($6M vs ~$3M).
There are very few months with net positive buying i.e more CEL tokens have been bought than sold.
The recent selloffs (in the last 90d) are much smaller compared to the largest sell off months i.e. $6M sold in August 2021.

Top 10 buyers

Now we’re looking at the top 10 buyers over the last 90 days. These are the buyers who have swapped into (bought) CEL on the DEXes outlined above (Uniswap & Sushiswap).

Here the top wallet is 0x000002c.. which has bought around 60M CEL tokens.
The #2 ranked wallet has bought around 30M CEL.
All of the top 10 wallets have bought more than 5M CEL.
8 out of 10 top 10 wallets have bought more than 10M CEL.

Top 10 sellers

Now looking at the top 10 sellers, the top seller is …… 0x000002c.. again with nearly 30M CEL sold.
All of the other top 10 wallets have sold more than 5M CEL and as high as 15M.
7 of the top 10 wallets have sold on Uniswap v2 while 3 sold on Uniswap v3.

Top 10 Net buyers

Now if we look at the net buyers (Bought - Sold), the top wallet is 0x0000008cf6… with ~45M CEL bought.
- Surprisingly, this buyer bough on Uniswap v3 and is the only wallet in the top 10 that bought on Uniswap v3.
All of the other 9 wallets in the top 10 have bought on Uniswap v2.
There are at least 2 other wallets who have bought around 30M CEL.
Most other top 10 wallets have bought less than 10M CEL.

CEL Transfers

Now, we’re looking at which wallets are sending and receiving CEL tokens. Here’s what we find:

The top wallets here are CEX wallet from FTX.
Other CEX such as Okex, Gate.io, Bittrex also had significant amount of transfer amounts.
Surprisingly, Celsius wallets also sent about 64M CEL and received 56M CEL.
There is an unknown wallet 0x2faf… which received around 79M CEL!

CEL Transfers involving Celsius Wallets

Now, if we isolate the transfers to just Celsius wallets we can see that there are two wallets who sent more than 15M CEL and 4 with more than 10M CEL sent.
- The top wallet is 0x4f67… which sent around 35M CEL.
On the receiving side, there are 4 wallets receiving more than 10M CEL.
- The top wallet here is also 0x4f67… which received around 20M CEL.
Based on the above numbers, it’s likely 0x4f67… is the celsius hot wallet used for deposit and withdrawals.

The next set of stats are over the last 90 days.

Conclusion

In this analysis, we analyzed user behavior around the CEL token. Here’s what we found:

There has been a large selling pressure on the CEL token since 2020 including the last 90 days.
Since April 2021, most of the swap volume for CEL has occured on Uniswap v3.
Most of CEL has been bought and sold on Uniswap v2 as evidenced by top 10 buyers and sellers.
An unknown wallet 0x2faf… has received around 79M CEL!

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