Amid this weekend’s crypto market carnage, a crypto asset called Magic Internet Money (MIM) briefly fell to a low of $0.914 per unit and on Saturday, June 18 another stable coin fell below the $1.00 peg. The drop in the Abracadabra-issued stablecoin follows the recent Terrausd (UST) failure and last week’s USDD volatility.
Stablecoin Magic Internet Money loses $1 parity but regains strength after drop to $0.91
In mid-May 2022, the entire world witnessed an algorithmic stablecoin called terrausd (UST) drop out of $1 parity and drop below a US penny in value. In fact, UST’s failure obliterated the entire terra blockchain ecosystem of tokens to the point of near worthlessness.
Last week, Bitcoin.com News reported that with Tron’s algorithm stablecoin USDD, it has dropped to as low as $0.95 per unit. The Tron Reserve DAO has added significantly to reserves like USDC andadded TRXand maintained the token’s overcollateralization.
Despite the addition of funds, on June 18. the USDDfell to a low of $0.948 per unit, and the crypto token is now exchanging at $0.964 at the time of writing at 6:05 PM ET.
On the same day, Abracadabra’s stablecoinMagic Internet Money (MIM)also fell below the $1 parity of its assets to a low of $0.914 per unit. using a protocol called Abracadabra.money allows users to add collateral and create MIMs, and today there are 197,674,194 MIMs in circulation.
MIM is utilized on a variety of blockchains, including Ethereum, Phantom, BSC, and Avalanche.Although it fell to $0.91, MIM rebounded on Saturday, and at 6:05 PM ET, was at $0.992 per unit. Trading below $1 parity, MIM attracted a lot of attention during the day as “MIM de-pegging” became a trending theme on social media. The day before, one Twitter accountsaidthat MIM was “about to depeg [again] with a 95.8% liquidity imbalance. There is only $6 million of liquidity left in the pool.”
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Additionally, Abracadabra published ablog postaddressing “a large number of fake Twitter threads.” Abracadabra stated that the false information “caused extreme volatility affecting the liquidity of the MIM peg and MIM-3 pools in curve finance.”
“One of the central pieces of FUD revolves around Abracadabra’s financial structure.” Abracadabra’s blog post noted that ” Our operating treasury, not including SPELL tokens, currently (at the time of writing) holds over $13.2M in assets. Roughly half of the treasury is in MIM stablecoins and the other half in CRV tokens, which are the basic assets for us to hold.” A blog post on the decentralized finance (defi) project also states.
If you are looking for exact amounts, the treasury holds 6,619,923.5 MIM and 10,380,153.06 CRV tokens.
Abracadabra’s blog post also asks those with outstanding loans to pay off the balance while the peg is low in order to rebalance the MIM-3pool.
“As we write this article, the health of the curve pool continues to improve and we fully expect the MIM peg to recover soon. Additionally, we will share a more detailed schedule as to when and how the repayment will take place,” Abracadabra’s blog post concludes.
In addition to USDD and MIM, the stablecoinneutrino usd (USDN)has recently been volatile below $1 parity. Trading at $1 at 6:05 PM ET, USDN fell to $0.931 per unit early Saturday.
What do you think about the stablecoin, Magic Internet Money (MIM), being de-pegged on Saturday, and what do you think about Abracadabra’s blog post remarks? Let me know what you think about this subject in the comments section below.
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