Celsius Unlocks $418M From Aave

The crypto lending company has been unwinding its DeFi positions in the wake of a severe liquidity crisis.

Celsius Unlocks $418M From Aave
Shutterstock cover Satheesh Sankaran

Key Takeaways

  • Crypto lending company Celsius repaid the majority of its debt to Aave today and managed to unlock 400,000 stETH from the protocol.
  • It has also started unwinding positions on Compound, though it still has 10,000.94 wBTC ($199 million) locked in the protocol.
  • Last week Celsius managed to completely unlock and shut down its MakerDAO vault, rescuing a 21,962 wBTC position (worth about $456 million on Jul. 7).

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Celsius has unlocked 400,000 stETH from Aave. The crypto lending company has recently been winding down its positions across the DeFi landscape, possibly in an effort to deal with its severe liquidity crisis.

Saving 400,000 stETH From Aave

Celsius keeps unwinding its DeFi positions.

On-chain data show that a wallet associated with Celsius Network repaid the majority of its debt to lending protocol Aave today at 11:49 UTC, sending more than $63.5 million in USDC to unlock collateral of 400,000 stETH, a sum worth about $418,848,000 at the time of writing.

The wallet furthermore unlocked 350,020 UNI ($2 million) and 529,94 COMP ($25,600) from different lending protocol Compound, and redeemed 300,000 xSUSHI for 395,060.92 SUSHI ($458,200) from decentralized exchange SushiSwap.

Celsius is a “CeFi” crypto lending company, meaning a centralized entity that leverages yield opportunities found in decentralized finance (DeFi) protocols for its customers. The firm has been facing liquidity issues following what it called “extreme market conditions.” It controversially paused customer withdrawals last month in order to put itself “in a better position to honor, over time, its withdrawal obligations.”

The company may be unwinding its DeFi positions in an attempt to strengthen its balance sheet as it potentially prepares to file for bankruptcy. Last week Celsius unlocked a 21,962 wBTC position (worth about $456 million on Jul. 7) from decentralized stablecoin issuer MakerDAO. It may have suffered from a $1 billion loss on that position alone.

DeBank data show that Celsius may still have some unwinding to do. The same wallet that unlocked 400,000 stETH today still has 10,000.94 wBTC ($199 million) locked on Compound and about $27 million in LINK, stETH and SNX remaining on Aave. These positions will respectively need $50 million and about $8.5 million to be unlocked. Celsius may also own other wallets with further DeFi debt.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.

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