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I think it's a mix of things in this case. They likely lost money in Luna, and there is a rumor they have some ETH deposits stored in stETH (staked ETH that won
by xur17 4y ago
I think it's a mix of things in this case. They likely lost money in Luna, and there is a rumor they have some ETH deposits stored in stETH (staked ETH that won't be fully withdrawable until at least 1 hard fork after the merge, and hence trades at a slight loss right now).
- graeme 4y agoThat’s their most visible difficulty but the heart of their problem is they were a ponzi. They promised rates of interest they could not earn in the marketplace, so redemptions were made from new deposits. Luna sparked a run for the exits, hence they could no longer meet withdrawals from new money.
- iskander 4y agoAn additional concern about their stETH is whether they generating high yields via the dubious strategy of "recursive staking": stake ETH to get back stETH, borrow ETH using your stETH as collateral, stake the borrowed ETH to get more stETH (repeat). This is very sensitive to the stETH:ETH exchange -- there's some suspicion that Celsius is (or at least was recently) in danger of mass liquidation as the stETH:ETH exchange rate drifts downwards.