Liquidity Strapped Celsius Network Frees Up $172 Million Worth Of Collateral From Aave
- Celsius swapped 1,647 wBTC of its interest-bearing token derivatives on the Aave protocol.
- The crypto lender paid off $95 million debt to both DeFi platforms last Friday.
Struggling crypto lender, Celsius network, has paid $95 million in debt to DeFi platforms (Aave and Compound). The move facilitated the release of $172 million worth of collateral locked in both DeFi platforms.
Last week, the crypto lender used a similar strategy to release $480 million in collateral from the Maker DAO platform.
Celsius Fights to Survive
A Nansen Portfolio data revealed that a Celsius-linked wallet moved $35 million worth of DAI and $40 million worth of USDC in multiple transactions. Also, Etherscan data shows that the Celsius-linked wallet paid the Aave protocol another $20 million worth of USDC on Sunday night.
The Nansen Portfolio is a tracker that follows the movement of crypto-related funds from one wallet to another. On the other hand, DAI is MakerDAO’s USD-pegged stablecoin. The crypto lender swapped 1,647 wBTC of its interest-bearing token derivatives on the Aave protocol.
The 1,647 wBTC is valued at $33.5 million. The crypto lender also swapped Basic Attention Token (BAT) and xSUSHI tokens worth a combined $1.6 million. The xSUSHI is the derivative of the native token of the Sushiswap derivative exchange.
After making these down payments, the crypto lender was able to redeem some of the debt’s collateral. Since paying off part of its debt last Friday, Celsius has redeemed 8,436 wrapped BTC (BTC). These wBTC tokens are worth about $172 million based on current value. The crypto lender also redeemed $700,000 worth of comp tokens. Comp is the native of the Compound protocol.
Crypto Lenders And Crypto Market Crisis
Centralized crypto lenders have suffered the most from the current crypto winter. Last week, voyager digital filed for chapter 11 bankruptcy protection. Another crypto lender, BlockFi, was bailed out by crypto exchange FTX with a credit line worth $240 million. Celsius paused funds withdrawals early last month to prevent a massive hit on its deposits.
The crypto lender has also reduced its staff strength and hired restructuring experts. However, Celsius is finding a way of paying off its debt to DeFi networks. That move enables it to recover its collateralized digital assets (assets pledged against loans).
However, it is worth noting that Celsius is still indebted to Aave and Compound to the tune of $140 million. Also, it still owes the national finance $3 million worth of fUSDC and has until September 25 to pay up.
Data from the DeFi platform, Zapper, indicates that Celsius has paid $95 million out of the $235 million it owes these two DeFi platforms. Zapper also showed that Celsius still has $680 million locked up on these platforms because of the loans. The locked amount was $950 million before Celsius paid part of its debt.
Hence, Celsius can unlock the remaining amount once it pays off its loans completely. Celsius restructuring experts seem to be doing an excellent job at helping it preserve and protect its digital assets.