The Celsius network paid off Maker’s loan and freed $440 million of collateral for the DEFI platform so let’s read more today in our latest cryptocurrency news.
Celsius Network is the crypto lender that halted user withdrawals last month because of liquidity issues and now it reclaimed $440 million of collateral after it paid off the loan to Maker as one of the biggest decentralized finance platforms in the crypto space. The on-chain data shows that a wallet connected to Celsius repaid the rest of .
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2 million of the loan in DAI and this prompted the Maker protocol to release 21,962 wrapped bitcoins which is equivalent to the Ethereum blockchain and was token pledged as a collateral to the loan. This works out to be about $448 million since WBTC was trading at $20,400.
This move is a huge liquditiy boost for the crypto lender’s finances as Celsius halted the customer withdrawals and transactions to avoid a run on the deposits. The analyst from Fundstrat Walter Teng said that the collateral that Celsius was able to free up can be sold on centralized exchanges or via the OTC platforms to meet creditor demands and customer withdrawals. CEL as the native token for the platform spiked 10% in a few minutes but it is still down 81% since the year started. Celsius slowly started reducing debt to the Maker protocol and paid off $224 million in the past week.
The loans on the decentralized lending platform like Maker are over collateralized which means the borrower has to put up more assets in value as a backing of the loan rather than the value of the loan itself. Repaying the loan made sense for Celsius because it can get a grip on the collateral by paying back a fraction of the value.
As recently reported, Celsius Network made a few loan repayments to reduce the threshold at which it will be forcibly liquidated and the loan paybacks were witnessed on vault #25977 which belongs to the company. The company started making a string of repayments on June 14 and the latest which is also the biggest payment happened yesterday. This month, other than the repayment, Celsius also cut back its workforce by 150 people.
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