Celsius Network (CEL)
Celsius Network (CEL)
$3.75 (-1.26 %) View coin |
Maker (MKR)
Maker (MKR)
$1 056.81 (-2.66 %) View coin
News
04 Jul 2022

Celsius repays $120 million stablecoin debt to Maker protocol

Celsius repays $120 million stablecoin debt to Maker protocol

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.

[caption id="attachment_155768" align="alignnone" width="800"]celsius maker Source: DeFiExplore[/caption]

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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