Abracadabra is a multi-chain lending platform that permits its users to carry out spells with their interest-bearing assets. In the end, these users conjure up Magic Internet Money ($MIM). Although the name “Abracadabra” sounds strange, the platform has some records to attest to its brilliance. Anyone who loves movies like Harry Potter might find Abracadabra interesting. Only this time, spells provide a source of income.
A team of experienced DeFi developers runs Abracadabra. Daniele Sesta, responsible for Popsicle Finance and Wonderland, is the brain behind this lending platform. Furthermore, 0xMerlin and Squirrel are co-founders of Abracadabra,
Users of the platform get to mint MIM, its native asset, using interest-bearing assets. The process may appear complicated, but it is actually a fairly basic concept. Abracadabra’s purpose is to provide users with a one-of-a-kind way to obtain DeFi capital. This would allow them to farm more productively. To put it another way, Abracadabra facilitates access and allows its users to farm with leverage.
The project emerged out of a need for a decentralized stablecoin that could outperform existing options. The goal was to design a stablecoin that is completely decentralized, successful in multi-chain environments, and simple to use.
The MIM Token
MIM, or Magic Internet Money, is the stablecoin for the Abracadabra protocol. Furthermore, it is backed by interest-bearing tokens (ibTKNS). The protocol chose interest-bearing tokens since they generate interest. In addition, based on market estimates, ibTKNS will continue to climb in price over time, hence increasing earnings. As users repay interest on amounts borrowed from the lending pool, the volume of these tokens rises.
Examples of such tokens include;
These tokens are collateralized and added into the system before being minted into MIM tokens.
Furthermore, the MIM stablecoin has cross-chain compatibility. As a result, users can deploy the MIM token on platforms built on the Fantom, Ethereum, Binance Smart Chain, Arbitrum, and Avalanche blockchains.
Minting and Leveraging MIM Stablecoins
Users would need a crypto wallet to mint the MIM token. The wallet would have to contain a cryptocurrency, which would serve as collateral. Furthermore, a user can then leverage their collateral to increase their APY. Here are the steps involved in minting the MIM:
- Connect a WalletConnect-compatible wallet to Abracadabra.money. Afterward, select a preferred blockchain network.
- Users would have to choose the type and amount of collateral they want to supply and select their liquidation price. The liquidation price affects the amount of APY they can earn and their liquidation chance.
- Before minting the MIM stablecoins, the dashboard will display a user’s fees and expected APY. On confirmation, the user would receive MIM, which has a use case like any other stablecoin. The platform allows a maximum loan-to-value ratio of 90%.
The $SPELL Token
While $MIM appears to be the more well-known token, the $SPELL token is another vital part of the system. The $SPELL token is the platform’s governance token. In addition, $SPELL is also the protocol’s utility token, used to provide incentives and fee-sharing amongst users. As of writing, $SPELL trades at $0.003430. It has a 24-hour trading volume of $163,997,632.
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