Big revelations are happening in the case of Celsius Network which just paid back $120M stablecoin debt to the popular DeFi platform Maker protocol as it had borrowed a lot of money with wrapped Bitcoin (WBTC) as collateral.
According to data, three big repayments were made to the multi-collateral Dai vault #25977 on July 3 and 4. The transactions involved the exchange of 64 million, 50 million, and 6.2 million DAI.
On July 2, Celsius also paid-up additional obligations to Aave and Compound totaling $67 million, in addition to Maker Protocol payments.
It’s been three weeks since Celsius paused withdrawals and transfers amid market conditions. These enormous debt repayments may aid Celsius in recovering its solvency and allowing withdrawals once more.
Given that Celsius invested in a number of crypto platforms to generate revenue for its customers, these Maker debts are likely a small percentage of the company’s overall commitments.
Celsius faced a greater risk of liquidation when the price of bitcoin fell recently. This repayment has helped cut the liquidation price on the wBTC collateral to less than $5,000, reducing the likelihood of a forced liquidation.
There are divergent views on what all of the financial activity implies, but it has already sparked enthusiasm in the community. Celsius still owes Maker $82 million, Compound $100 million, and Aave $175 million.
Also Read: How Celsius crashed Crypto Market?
Even with the company trying to turn back things, Celsius had to lay off about a quarter of its employees due to liquidity issues. Celsius is even seeking support from its users to avoid having to file for Chapter 11 bankruptcy, as advised by its lawyers.
