Celsius froze withdrawals in June 2022 before filing for Chapter 11 in July 2022, and Genesis froze redemptions after FTX’s collapse and filed for bankruptcy in January 2023, owing approximately $3.4 billion to its 50 largest creditors.

BlockFi, Celsius, Genesis, and Voyager together accounted for 40% of the crypto lending market and 82% of CeFi lending at their peaks, per Galaxy data. The 2022 unwind exposed two failures simultaneously: bad loans and the complete opacity of where risk sat inside those balance sheets.

The answer crypto landed on was to put lending on-chain, which helped address some of the opacity problem.

Building the credit infrastructure that institutional lenders require, such as defined seniority, first-loss…