Celsius Network has repaid another $120 million of its Bitcoin loan on Maker in the past 24 hours.
Celsius Network, the decentralized lending company that is currently facing a serious liquidity crisis, has paid $120 million of its debt to the decentralized lending protocol Maker through three transactions.
The company had borrowed hundreds of millions from Maker using Wrapped Bitcoin (WBTC) as collateral.
By paying off this debt to Maker, Celsius has left its loan position unprotected against possible liquidationIn decentralized finance, liquidations occur when traders fail to repay their loans on time, and protocols automatically sell their collateralized assets.
The recent drop in the price of Bitcoin has caused Celsius to face a higher risk of liquidation. However, the repayment of part of the debt has helped reduce the price of Liquidation of your WBTC collateral less than $5.000, according to data from DeFiExplore.
According to data from DeFiExplore, Celsius has been making a series of refunds to Maker since June 14, with the largest one being made yesterday (July 4). On the other hand, the lending company could also have made payment on combined debt of $67 million in Aave and Compound, according to cryptocurrency researcher Plan C.
In this regard, on-chain data suggests that Celsius’s obligations are complex, with collateralized loans held across multiple lending protocols. Moreover, the company still owes $82 million to Maker, $100 million to Compound, and $175 million to Aave.
What does this mean for Celsius Network?
First, taking on a large part of the debt means that the efforts made by Celsius Network, hiring advisors to restructure debt, are beginning to bear fruit.
These actions offset the risk of insolvency, although the community continues to wonder if this means that the company will reopen withdrawals to its customers. This raises a new question: Where will Celsius get the money to repay its lenders?
So far, the refunds have been well received, as evidenced by the 17% growth in the price of the CEL token.
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