Celsius just returned $120 million to Maker in an attempt to get back to solvency, the DeFi protocol behind stablecoin Dai, although neither party has confirmed that the payment order was made by Celsius.
Maker Vault receives debt repayment from Celsius
Celsius first froze withdrawals, trading and swaps on June 13. Now, the company appears to be paying off debt in an attempt to regain liquidity.
Data shows that Vault #25977, which has multiple collateral, saw three significant DAI deductions between July 3 and July 4.
Those transactions involved 64 million DAI, 50 million DAI, and 6.2 million DAI with a total value of about $120 million.
Maker Vault was also refunded 22.6 million DAI on July 1, as well as 53.7 million DAI refunded between June 14 and June 16.
Can Celsius regain its solvency?
Large repayments like these could help Celsius regain its solvency and allow withdrawals to reopen.
This is likely just part of Celsius’s liability, as the company invests in various crypto and DeFi contracts to generate revenue for its users.
These returns reduced vault #25977’s liquidation price and reduced the risk of forced liquidation.
Vault #25977 uses Wrapped Bitcoin (WBTC) as collateral and as such, it will be liquidated if BTC drops to a certain price. On June 13, the liquidation price was $16,852 – very close to June’s price of $20,000.
Now, after last month’s payments, the liquidation price is $4,966 which is a relatively safe level given the current Bitcoin price.
Does Celsius own Vault #25977?
Celsius itself has not confirmed that it owns the Vault in question, nor has it confirmed that it has repaid these debts.
However, MCD vault #25977 is believed to belong to Celsius because it is owned by an Ethereum address starting with 0x87a6, which is one of many Ethereum addresses that Larry Cermak of The Block identified as owned by Celsius in June.
An update from Celsius published on Friday said little about the company’s DeFi investments. Instead, it shows that the company is exploring strategic transactions and restructuring liabilities to regain liquidity and reopen withdrawals.
Other reports from Sunday suggest the company has laid off a quarter of its staff in the wake of the liquidity crisis.