Crypto Company Celsius Pays Back $41 Million to Decentralized Finance Platform Maker

The crypto company Celsius paid back the $41 million remaining of its debt to the decentralized finance platform Maker, blockchain data shows -    unlocking $440 million in collateral that had been held as security for the loan.

Celsius, which announced last month that it was temporarily halting user withdrawals because of liquidity issues, has regained $440 million in collateral after fully repaying a loan on the Maker protocol, one of the leading DeFi networks.

On-chain data shows that a wallet linked to Celsius repaid the remaining $41.2 million of the loan in DAI, the Maker protocol's stablecoin. That prompted the Maker protocol to release 21,962 wrapped bitcoin (WBTC), a bitcoin-equivalent token of the Ethereum blockchain, which was pledged as collateral of the loan. That works out to about $448 million, since WBTC is currently trading around $20,400.

The move will give the troubled crypto lender a big liquidity boost. To avoid a run on deposits, Celsius stopped all customer withdrawals and transactions on June 12.

Walter Teng, a CoinDesk contributor and analyst at Fundstrat, said that the collateral that Celsius released "can be sold on centralized exchanges or through over-the-counter transactions to meet creditor demands and customer withdrawals."

Celsius closed its loan on the Maker protocol by paying back the remaining $41.2 milllion in DAI, freeing up the loan's WBTC collateral. (DeFi Explore)
The Celsius wallet returned the remaining $41.2 million in DAI to the Maker protocol, eliminating its obligation to repay the loan. (DeFi Explore)

The native token of the Celsius platform, CEL, jumped 10% in minutes after the news, but has since fallen 81% since January.

In the last week, Celsius has paid back $224 million as a result of its debt to the Maker protocol.

The loans on decentralized lending platforms such as Maker are generally overcollateralized, which means that the borrower has to put up more assets in value as a backing of the loan than the value of the loan itself. Repaying the loan made sense for Celsius because it could get a grip of this valuable collateral by paying back a fraction of its value.