How can we explain the 15% decline in average loan sizes on Celsius Network's crypto-backed lending platform compared to the previous quarter?

Introduction

The 15% decline in average loan sizes on Celsius Network's crypto-backed lending platform is a concerning trend that requires thorough investigation. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both immediate and long-term implications for the platform's success.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a correlation with recent market volatility. Has there been any significant cryptocurrency price fluctuations during this period?

Why it matters: Market conditions directly impact collateral values and borrowing behavior. Expected answer: Yes, there have been notable price fluctuations. Impact on approach: If confirmed, we'll need to analyze how market volatility affects user behavior and risk management strategies.

• Considering user segments, I'm curious about the distribution of loan sizes. Has there been a shift in the proportion of small vs. large loans?

Why it matters: Changes in user composition could explain the average loan size decline. Expected answer: There's been an increase in smaller loans relative to larger ones. Impact on approach: We'd need to investigate factors driving this shift in loan size distribution.

• Thinking about product changes, have there been any recent adjustments to loan terms, interest rates, or collateral requirements?

Why it matters: Policy changes could directly impact borrowing behavior. Expected answer: Some minor adjustments were made to interest rates. Impact on approach: We'd need to analyze the impact of these changes on user decisions.

• Regarding platform performance, have there been any technical issues or downtime that might have affected larger transactions?

Why it matters: Technical problems could deter users from taking out larger loans. Expected answer: No significant technical issues reported. Impact on approach: If confirmed, we can focus more on user behavior and market factors.