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Celsius Frees Up $419M of stETH After Paying Aave $81.6M

Tyler Irvin

Summary: Celsius Network, a prominent crypto lender facing liquidity troubles, continues to maneuver their way around their current crisis by paying $81.6 million in USDC on Tuesday to crypto lending protocol Aave, freeing up $419 million in stETH, according to on chain data.  As a result, Celsius decreased its debt to the decentralized (DeFi) protocol Aave ...

Celsius Network, a prominent crypto lender facing liquidity troubles, continues to maneuver their way around their current crisis by paying $81.6 million in USDC on Tuesday to crypto lending protocol Aave, freeing up $419 million in stETH, according to on chain data

As a result, Celsius decreased its debt to the decentralized (DeFi) protocol Aave from $90 million to $8.5 million, while simultaneously receiving the stETH they pledged as collateral for the loan. stETH in principle represents 1ETH locked up on Ethereum’s upcoming proof-of-stake network. However, stETH, valued at $1,047,  is trading slightly below ETH’s value of $1,083. 

This is just the latest in Celsius’ efforts to pay back their loans and recover some of their pledged collateral. Yesterday, Bitpush reported that Celsius paid back $95 million of their debt to Aave and Compound, two DeFi protocols, freeing up $172 million in collateral. Just last week they paid off their $228 million debt to Maker, which freed up $440 million of collateral in the form of wrapped Bitcoin (WBTC). 

At the time of writing, Celsius still owed $59 million to DeFi protocols according to crypto data tracker Zapper: $8.5 million to Aave and $50 million to Compound. If they pay these off, they will receive $28 million in collateral from Aave and $199 million from Compound. 

Celsius, which managed over $20 billion of client deposits at one point, is one of the crypto lenders experiencing extreme liquidity challenges amid an overall market sell-off. Celsius’ troubles date back to December of last year when it lost $54 million worth of Bitcoin to DeFi platform BadgerDAO, who was hacked. They were also exposed to TerraUSD (UST) at some level, which depegged from a $1 down to pennies in several days in May. 

Celsius paused withdrawals, Swap and transfers between accounts on June 12, which has continued till this day. While many in the community anticipated the worst for Celsius upon the announcement, they are still finding ways to make ends meet by recovering liquidity, eventually hoping to reinstate user activities. 

Author: Tyler Irvin

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Link: Celsius Frees Up $419M of stETH After Paying Aave $81.6M   [Copy]
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