Keeping assets locked up in one place may be the safest approach for some, but it is not the smartest. Celsius generates interest rewards by deploying assets.
Celsius is allowing the 99% to access the tools to earn a passive income previously held for the 1%. But even in doing that, we do so responsibly. That means that we only process collateralised loans and that your coins are never “locked up” and can be withdrawn at any time.
To ensure coin loans are always returned to Celsius, we require borrowers to post collateral of up to 150% (which means that the borrower gives Celsius an alternative asset as collateral for the asset they are borrowing) or we conduct thorough due diligence reviews of borrower’s financials and repayment ability.
By lending out from our community’s pool, we are operating the same way any old-school financial institution would (plus most crypto exchanges and hot wallets). The difference is that, instead of keeping the profits for ourselves and our shareholders, we distribute it to our community.
You can also watch the video below about "what goes into protecting your assets".