Over the past five months, popular cryptocurrency lending service Celsius has placed more than half a billion dollars in the Anchor protocol on the Terra network. The service managed to withdraw at least $463 million.
how informs edition of The Block, Celsius management began placing funds in the Anchor Protocol about five months ago. From December 19 to March 17, the service placed 146,000 ETH in Anchor. Then the pace of deposits accelerated and from April 6 to May 3, Celsius deposited another 115,000 ETH. In total, 261,000 ETH were placed on the Anchor protocol. The meaning is quite clear – Anchor Protocol offered 20% per annum for placing funds in UST.
When the UST stablecoin decoupled from the dollar and the entire Terra ecosystem began to collapse, the Celsius management began to hastily withdraw funds. It was the panic withdrawal of funds by Anchor Protocol participants that led to such dire consequences for LUNA and UST. However, for Celsius, everything ended quite favorably – service was able to return at least 225,000 ETH.
Later in the official Celsius account a message appearedthat all funds are safe, so, most likely, the service managed to return the remaining 36,000 ETH.
“Celsius was in a good position. They used bETH (Bonded ETH) as collateral to receive UST and then used that UST in the Anchor protocol to generate income. In the current situation, this move turned out to be more correct and safer than a direct purchase of UST on the market,” said Igor Igamberdiev, an analyst at The Block Research.
As Igamberdiev said, in fact, the scheme was even more complicated. Celsius originally used the Lido protocol to transfer ETH to stETH. These funds then went to the Anchor vault to issue bETH, and then to the Wormhole bridge to be transferred to the Terra network. Only after that they were used for a deposit.
The funds withdrawn from the Anchor Protocol were transferred by Celsius to another DeFi lending protocol Aave v2. The form stETH was also used for this.
Note that the Brazilian blogger and crypto expert Cayo Gare last month predicted the collapse of UST and LUNA.