Celsius pays off 183 million DAI in debt to avoid liquidation


Celsius, the beleaguered CeFi lending platform, is aggressively repay debt and release assets previously locked in MakerDAO, a secured debt protocol.

This month, Celsius repaid 183 million DAI owed to MakerDAO and withdrew 2,000 wrapped Bitcoin, worth nearly $21 million, according to DeFi Explorer, an analytics platform. Celsius still owes around 41.2 million DAI to the MakerDAO protocol without permission.

Clearance Price

By making the redemption, Celsius reduced the liquidation price of the position to $2,722.27 from around $13,000. This means that the WBTC deposited as collateral will only be liquidated to repay the debt if the BTC falls below $2,722. BTC was at $20,489 in early morning New York time.

The news comes about four weeks after Celsius appears to be at significant risk of liquidation.

On June 13, Celsius suddenly suspended customer withdrawals citing extreme market conditions. On the same day, crypto journalist Wu Blockchain tweeted this Celsius address represented the largest personal position on MakerDAO, with 278 million DAI borrowed against 17,919.37 WBTC for a liquidation price of $22,584.

“All That Candy”

Despite the debt repayment, Celsius did not indicate that customer withdrawals would soon be reactivated. Twitter user BClarkieeeeee expressed frustration that Celsius depositors are still unable to access their funds, Tweeter “All that candy floating around and we ain’t fucked up yet. Doom.”

The company began adding collateral and reducing debt over the next few days and weeks, Celsius increasing its collateral to 23,962.6 WBTC and reducing its liquidation price to $16,582.48 on June 14. Bitcoin marked a local low of $17,600 on June 18.

MakerDAO Members Vote for $100M DAI Vault for Bank

Celsius’ MakerDAO position is now backed by 21,962 WBTC (worth around $450 million). Celsius has so far made a loss of $688.2 million on its position, having deposited $1.8 billion from WBTC and withdrawn $757.6 million.

The latest refunds have drawn mixed reactions on social media.

Twitter User ShayneOnChayne suggested the move is likely part of preparations for bankruptcy proceedings. But CEL_100 is skeptical of the theory, commenting “If you declare bankruptcy, you do not repay your debts. You go away.”

Security deposit

Allen11 warned that the freshly released collateral could soon flow into the markets. Davide Melonei interrogates the source of Celsius’s new DAI.

According CoinGecko.


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