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Celsius Has Paid off Their Last Defi Loan, Becoming Debt Free

Garrett Meifert

Summary: Early this morning, Celsius paid off their final BTC loan, a $50 million payment to Compound. This let the struggling crypto lender reclaim 10,000 wrapped bitcoin, a bitcoin-replica token on the ETH blockchain. These returned tokens are worth almost $200 Million, temporarly easing some pressure. On-chain analysis of the ETH network showed that a wallet ...

Early this morning, Celsius paid off their final BTC loan, a $50 million payment to Compound. This let the struggling crypto lender reclaim 10,000 wrapped bitcoin, a bitcoin-replica token on the ETH blockchain. These returned tokens are worth almost $200 Million, temporarly easing some pressure.

On-chain analysis of the ETH network showed that a wallet linked to Celsius transferred 50 million DAI tokens to Compound over two payments. Following this, Compound released 6,900, then 3,100 wBTC tokens to Celsius that were previously locked in the contract.

Some people are far from optimistic, though, thinking the lender will not be able to open their platform without users running away as fast as possible. The lender has over 8 Billion under management, which some Twitter users fear Celsius will still be unable to return. Mashinsky Victim on Twitter said, "So about 5 minutes worth of liquidity if they open withdrawals."  

Another user agreed when he said, "You're seeing this all wrong. This is going chapter 11."

This is similar to how Celsius previously paid back DeFi lending protocols Aave and Maker. The loans on these protocols are overcollateralized, meaning the borrower has to lock up more digital assets than the loan's value. This is a hypothetical gain for Celsius's balance sheet because it should free up cash for the lender to pay back clients.

Twitter was quick to point out the irony that although Celsius can pay back loans to get funds returned, they refuse to release funds for any users on their platform, independent of their payment status. A user named 21Millones_BTC referred to this as "EXTREMELY unfair, unethical, and maybe illegal."

Although there is currently no positive news for users of the platform, it is good to hear Celsius has been making good on its debt to DeFi protocols. The more free cash Celsius can free up, the better off creditors will be. Since the start of July, it has paid back $223 million to Maker, $235 million to Aave, and $258 million to Compound, freeing up more cash for the platform.

Author: Garrett Meifert

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