Crypto lending platforms are growing in number as the asset class becomes more popular around the world. Many leading crypto firms have created lending programs as they strive to encourage the widespread use of digital assets.
The Litecoin Foundation has placed its capital in the Celsius Network, a blockchain-based cryptocurrency lending platform. According to Alex Mashinsky, CEO of Celsius Network, the Foundation has picked his company to be its preferred crypto wallet. The deal between the two firms will see Litecoin Foundation place an undisclosed amount of its crypto holdings in the Network. Clients of Litecoin could receive up to 10.53% interest annually on their crypto holdings and 4.95% on dollar loans.
Litecoin Foundation is one of the leading players in the blockchain and crypto industry and having the firm place its faith in the Celsius Network will be a significant boost to the Network. Crypto traders and other companies in the industry will develop greater trust in the Network due to the investment made by the Foundation.
Mashinsky said that endorsement from the Foundation validates the Network. Celsius Network promises it's investors an 80% return on investment on their deposits, and Litecoin seems to agree that Celsius is worth an investment. The Network’s CEO went on to say that the endorsement from Litecoin, the first foundation to work with the Network, is a huge event. This vote of confidence by the Foundation is a sign that Celsius is gaining recognition from the general crypto community for the services that it provides.
In 2018, Celsius raised $50 million in its ICO. Since then, the platform has issued out over $2 billion in loans, holds over $350 million a year in deposits, and has issued over $3.5 million in interest to its investors. BitGo, a crypto custodian, said that it held $1 billion worth of crypto deposits on behalf of Celsius in the past year.
Charlie Lee, the creator and managing director of the Litecoin Foundation, said that they had chosen Celsius as their preferred interest bearing wallet because they are interested in helping Litecoin holders take advantage of any new use cases that could help these holders benefit from their holdings. Litecoin has shown its faith in the services offered by Celsius by placing a portion of its treasury in the network.
The Foundation has been working on forging several partnerships this year, and Celsius becomes the latest addition to its list of partners. A few months back, Litecoin Foundation entered into a relationship with the Miami Dolphins, a team in the NFL.
In the last quarter, Litecoin came under scrutiny following reports that the nonprofit firm was under financial stress. Due to the effects of the bear market, Litecoin was said to be operating in the red. Lee came out to say that his goal is to make the Foundation financially stable and self-sustaining from donations. Lee is responsible for close to 80% of the donations made to the Foundation since its inception.
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