The Litecoin Foundation will make Cryptocurrency lender Celsius Network its preferred wallet. Litecoin is the first Cryptocurrency to partner with Celsius Network. If their partnership is successful, it may attract more Cryptocurrencies to reach similar deals with Celsius Network.
It will also allocate an undisclosed sum from its treasury to Celsius. Litecoin customers who choose Celsius as their wallet will earn up to 10.53% interest annually and can also take a dollar loan using their coins as collateral at 4.95% interest.
Charlie Lee, Creator of Litecoin and Managing Director of the Litecoin Foundation, says, “The ability to gain interest on, and to take out loans against their litecoins…opportunities for individuals to grow their holdings,” and creating opportunities that not available to customers earlier.
It hopes that interest on deposits as well as dollar loans will attract more customers as it struggles to retain customer’s confidence.
Litecoin was one of the fastest-growing Cryptocurrencies in the world. It owed its fast growth to near-zero transaction cost and highest transaction speed in the sector. But in recent days. Its value had declined rapidly from a high of $146.43 in June 2019 to $70-80 in now. Fears were that customers were taking their profits and deserting Litecoin in a bull market. Also, the competition was increasing, and Litecoin didn’t seem to be doing anything to stay ahead of its competitors.
In such circumstances, by depositing a part of its treasury with Celsius Networks so that its customers can earn interest on their deposits and avail dollar loans on the collateral of their coins, Litecoin is sending a message that it genuinely cares about its customers and is even willing to share its capital to protect their interests. Moreover, selecting Celsius Networks, which claims to return 80% of its revenue to depositors, as a preferred wallet, also sends a message of probity and sincerity to rattled customers.
Celsius Network pays interest and gives loans on different Cryptocurrencies deposited with it. The deal with Litecoin comes after Celsius Network raised over $300M in deposits, given $3.5M in interest payments and has grown to 40,000 customers; all in just one year of its inception.
Celsius Founder & CEO Alex Mashinsky said,
Litecoin being the first foundation to work with us and endorse us is a real milestone.