Celsius Repays $183 Million Loan To Maker, Gets Back wBTC Collateral

Celsius has been aggressively repaying debt on one of the largest decentralized-finance protocols.

Bishal Kumar Chanda2 min read
Celsius Repays $183 Million Loan To Maker, Gets Back wBTC Collateral

Apart from halting withdrawals and cutting off jobs, Celsius has also been aggressively repaying debt on one of the largest decentralized-finance protocols. Possibly, the firm is trying to get back bitcoin-equivalent tokens put up on the platform as collateral.

According to the on-chain data, Celsius has paid down $183 million of its collateralized debt to Maker since July 1. Moreover, the Etherscan transactions verify that the downpayments originated from a wallet linked to Celsius Network. Further, the payment was made in the Maker protocol's native stablecoin, DAI.

Celsius repays $183 million of Maker loan

According to data, the transaction didn't only clear the debt but also released the collateral of 2,000 wrapped bitcoins. Meanwhile, wrapped bitcoin is a token representing Bitcoin, configured on the Ethereum blockchain.

Currently, Celsius owes about 41 million DAI to Maker but has about 22,000 wrapped bitcoin as collateral against it. Therefore, there could be an even bigger potential kicker if Celsius repays the remaining debt.

According to Fundstrat analyst Walter Teng, "By repaying the debt, Celsius is possibly freeing up collateral (BTC) that then can be sold on centralized exchanges or via over-the-counter to meet creditor demands and customer withdrawals."

"Given that DeFi loans are overcollateralized, it makes sense for them to do this, as the value unlocked from paying back their loans is greater than the value of the loans themselves," Teng added.

Celsius Network Strives To Stay Afloat

The embattled crypto lender is currently struggling to protect its remaining assets and avoid insolvency. In May, Celsius was financially hit by the implosion of the Terra blockchain and its algorithmic stablecoin, UST.

Celsius' remaining loan to Maker

Then in June, the collapse of once-top tier crypto hedge fund Three Arrows Capital added to Celsius' financial woes.

As of May, Celsius reported lending out more than $8 billion to clients and had $12 billion in assets under management. After the latest repayment, Celsius' wBTC liquidation level dropped to $2,774. As of now, wBTC is trading at $20,200, making the loan about ten times (1,101.59%) overcollateralized.

Recently, Celsius announced laying off 150 employees and hired restructuring lawyers. Amid the crypto market downturn and current events, Celsius' native token CEL has tumbled 80% this year.

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