- Celsius managed to recover some liquidity and has paid off its loan from $440 million he received from Maker Dao paying off the remaining $41.2 million of the loan using the DAI stablecoin.
- As collateral for the loan, Celsius had provided 21,962 Wrapped Bitcoin (WBTC) as collateral for the loan, which had a value of around $448 million.
They say that there is no harm that is not good, and that saying can be applied at various times, especially when something seems to be going wrong and a light at the end of the road returns some hope to those who need it.
This is the case of the crypto company, Celsiuswhich has managed to get up a bit from its losing streak, since it recently reported that, After having stopped withdrawals from its users for almost a month, due to liquidity pressures and adverse market conditions, the company has managed to pay the $$440 million of the loan you received from Maker, one of the largest decentralized finance (DeFi) platforms in the crypto environment.
Celsius repays Maker loan
The crypto company made the payment in an exhibition on July 7, the remaining $41.2 million dollars of the loan in DAI, the stablecoin of the Maker protocol.
This payment led the Maker protocol to release 21,962 Wrapped Bitcoin (WBTC), a token equivalent to the Satoshi Nakamoto asset of the Ethereum blockchain, which was pledged as collateral for the loan. This figure is equivalent to approximately $448 million dollars, since WBTC was recently trading around $20,400 dollars.
According to Crypto Twitter users and the r/cryptocurrency community on Reddit, Celsius has moved the recovered tokens to a wallet on the FTX exchange.
It’s important pointing that Celsius has been very close to liquidating its guarantee on three different occasions in the past months of May and June, More than critical moments, when the value of its guarantee was very close to falling below the 150 percent mark, however, since that moment, the company has not stopped making constant payments.
This measure represents a great boost in terms of liquidity, for the finances of the crypto firm.
“The payment of the debt with Maker, without a doubt, represents a key moment for Celsius, since it will allow the firm to offer both its users and other interested parties, hope that it has the solidity to continue working with its loan portfolio“Ninepoint Partners Digital Assets Division Managing Director Alex Tapscott said.
Loans in Maker DAO
It is important to note thatDebts at decentralized lending services like Maker are typically overcollateralized, meaning the lender is required to pledge more assets at the valuation as collateral than the loan itself.
Therefore, being able to repay the loan made perfect sense to Celsius, since it allowed him to keep the valued collateral, by repaying a fraction of its value.
However, no one should be overconfident, since although making the payment of the debt is seen as excellent news, the more than $500 million in WBTC are now deposited at a crypto asset exchange and possibly it could be sold to help Celsius meet its obligations to its customers.
In this regard, Fundstrat analyst Walter Teng said in an interview that the guarantee released by Celsius “It can be sold on centralized exchanges or over-the-counter to defray lender demands and customer withdrawals.”
Selling such a large amount could create great instability in the markets.
Hard times for Celsius
To better understand the situation and why debt repayment is important, it should be clear that on June 13, Celsius stopped all withdrawals and transfers between accounts due to “extreme market conditions,” such as As noted above, this meant that users’ money remained frozen.
According to some reports, the crypto firm provided more “digital gold” as a guarantee, in order to reduce the price at which its position would be liquidated, an extremely risky movement, since if the price of Bitcoin fell below the $16,852, it would be bankrupt and he would have to file for bankruptcy.
Celsius would later say earlier this month that it was actively working on measures to “preserve and protect assets.”
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