Celsius Network Kicks Off July by Repaying $142M to MakerDAO

Source : beincrypto.com

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The Celsius Network has repaid over $142 million in MakerDAO loans since July 1, rapidly lowering its Bitcoin liquidation price from above five figures to under $5,000. The company repaid $114 million to the protocol on July 4.

According to crypto researcher Plan C, in combination with MakerDAO payments, the company paid off further debts to Aave and Compound on July 2 which amounted to $67 million.

The flurry of financial activity has already whipped Crypto Twitter into a state of excitement, but there are disagreements about what it all means. 

A long and frantic pause

It has been just over three weeks since Celsius Network confirmed it would be ‘pausing’ all withdrawals. On June 13 the lender announced that “extreme market conditions,” had precipitated the decision and that over time it hoped to be “in a better position to honor… its withdrawal obligations.”

Since that date there have been a significant number of twists and turns to the tale, with first Nexo and then FTX offering to bail the company out. FTX is said to have walked away from any deal after allegedly finding a $2 billion black hole in the company’s finances. 

Celsius swiftly hired Citigroup and Akin Gump Strauss Hauer & Feld LLP to help it restructure its finances as the lender seeks to find any route out of bankruptcy proceedings.

One week after Celsius suspended withdrawals Bancor suspended its impermanent loss protection. Mark Richardson, Bancor’s Head of Market Research, was clear that the suspension was precipitated by another protocol attempting to destabilize Bancor and short its tokens. In an AMA Richardson revealed the predatory protocol to be Celsius.

Simon Dixon of BnkToTheFuture proposed that Celsius could be saved in much the same way that Bitfinex was rescued in 2016. Even as Dixon continues his efforts to build support for his plan it is not clear that Celsius has any interests in engaging with him. As a shareholder, Dixon believes he has the necessary votes to force a board meeting.

Celsius has entered the month of July with two significant developments. First, it laid off 150 workers. Then it started to repay outstanding loans. With the activity clearly visible on-chain, the crypto community has been swift to speculate on what is happening.

Divided opinion on Celsius

As the crypto community woke up to the latest development in the Celsius saga, there are those who clearly believe that the repayment of loans is a good thing. There are others who have taken a more skeptical stance.

Ran NeuNer is among those who are accentuating the positives. The influencer pointed out that Celsius is “aggressively repaying the loan and reducing the liquidation price.”

That optimistic post encouraged one user to sum up the battle-weary cynicism that many customers now feel.

“Repaying all their corporate loans with retail liquidity,” he replied.

While there’s no evidence to suggest that the cynic is correct, who in DeFi would want to bet their house on them being wrong?

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Robert D Knight is a journalist and copywriter who has specialized in crypto for over four years. His varied experience includes freelancing, in-project contracts, agency work, and PR, giving him a holistic view of the blockchain industry.

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