Within the last 24 hours, Celsius repaid $120 million of its debt owed to decentralized lending protocol Maker across three transactions.
Celsius, a centralized lending firm currently facing a severe liquidity crisis, had previously borrowed hundreds of millions on Maker using wrapped bitcoin (WBTC) as collateral.
By paying down its Maker debt, Celsius has de-risked its loan position from potential liquidation. In decentralized finance, liquidations occur when traders cannot repay their loans on time, and the protocols automatically sell their collateralized assets.
Source: DeFiExplore
As the price of bitcoin dropped recently, Celsius faced a heightened risk of liquidation. The repayment has helped reduce the liquidation price on its WBTC collateral to less than $5,000, according to data from DeFiExplore.
On-chain data suggests that Celsius’ obligations are complex and it maintains collateralized loans on multiple lending protocols. The firm still owes $82 million to Maker, $100 million to Compound, and $175 million to Aave.
Celsius’ recent developments are notable given questions about the platform’s solvency and broader fears about solvency across the crypto industry — particularly centralized lenders — amid a decline in major digital asset prices. Those concerns were kicked into overdrive when Celsius announced that it would halt withdrawals from its platform.
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About Author
Vishal Chawla is a reporter who has covered the ins and outs of the tech industry for more than half a decade. Prior to joining The Block, Vishal worked for media firms like Crypto Briefing, IDG ComputerWorld and CIO.com.
Source: https://www.theblock.co/post/155751/celsius-repays-120-million-stablecoin-debt-to-maker-protocol?utm_source=rss&utm_medium=rss