Recently, Celsius made a big investment in a staking token called stETH.
StETH lets people – and other projects similar to celsius – stake on the Ethereum blockchain and earn additional returns through DeFi. However, a sharp drop in the value of crypto assets left stETH trading at a discount and the token became more illiquid. That made it harder for Celsius to raise money for redemptions when users wanted to withdraw their funds. Last week, Celsius announced it was halting withdrawals because of “extreme market conditions,” an apparent effort to ward off the digital equivalent of a bank run.
Now, Celsius has proposed a rescue plan similar to the one used in 2016 to save the Bitfinex exchange.
What do you think of Celsius “collapse”, and what can radix learn from this story?
Wow, super interesting stuff, alot can be learned , I wonder if DEFI should not be allowed to go to many layers deep, if that makes sense, because it become so very complicated with too many moving pieces. I dont know how to enforce that but having a complicated burn system like Terra can do damage to the market and platform as it has done to atom. I thing in this sense some regulation is good, maybe the platform needs to regulate projects, but that could be complicated and stop development.
Regulations are essential in the crypto market. I think that a lot of companies and big institutional investors are not gonna touch crypto without regulations. After what is happening with cerby rug pull, luna first and celsius now, I suppose that the most needed regulation now should be protecting investors’ funds.
For me the Celsius “Collapse” showcases how early we still are and that everything is still wild west.
I hope situations like this will leave a positive mark on defi in the sense of that defi will learn from that how to operate sustainable and with stability as a defi project.
It for sure also broke the trust of investors…which might be right now the biggest thing and probably won’t have a positive impact on radix
Or maybe it can have a positive impact on radix if radix manages to build different defi but this will only be possible to see with having time proving it