One stablecoin, magic internet currency (MIM) fell below $1 per cent on Saturday amid the chaos in the cryptocurrency market. It briefly traded at $0.914 each unit. The Abracadabra-issued stablecoin dropping in value follows the recent terrausd (UST) failure and USDD’s recent volatility last week.
Stablecoin Magic internet money loses $1 parity but gains strength after falling to $0.91
The entire globe witnessed a stablecoin known as Terrausd (UST), drop below a U.S. dollar in value mid-May 2022. It was an algorithmic stability coin called Terrausd. In fact, UST’s failure obliterated the entire Terra blockchain ecosystem of tokens until they were near worthless.
Last week, Bitcoin.com News reported on Tron’s algorithmic stablecoin USDD and how it dropped to a low of $0.95 per unit. Tron Reserve DAO added significant quantities of USDC and TRX reserves to ensure that the token was not overcollaterized.
Although the funds were added, USDD dropped to $0.948 per Unit on June 18. The crypto token can currently be exchanged for $0.964 as of the writing of this article at 06:05 (ET)
On the same day, the Abracadabra-issued stablecoin magic internet money (MIM) also slipped below the asset’s $1 parity, dropping to a low of $0.914 per unit. By using the protocol Abracadabra.money, users create MIM by adding collateral and today, there’s 197,674,194 MIM in circulation.
MIM can also be leveraged using various blockchains such as Ethereum, Fantom or BSC. MIM was still trading at $0.992 per Unit on Saturday despite its slide to $0.91. The fall below the $1 parity brought MIM a lot of attention during the day, as the “MIM depeg” was a trending subject on social media. One Twitter account was active the day before. said that MIM was “about to depeg (yet again) with a 95.8% liquidity imbalance. There’s only $6m of liquidity left in the pool.”
Abracadabra dispels insolvency rumors and addresses the depegging incident
Furthermore, Abracadabra published a blog post that addresses “a large number of false Twitter threads.” Abracadabra said that the false information “created extreme volatility that has affected the MIM peg and the MIM-3pool liquidity on Curve Finance.”
“One of the central pieces to the FUD revolves around Abracadabra’s treasury composition,” Abracadabra’s blog post notes. “Our operational treasury, which does not include SPELL tokens, currently owns more than $13.2M in assets (at the time of writing). Roughly half of the treasury is in MIM stablecoin, and the other half is in CRV tokens which are fundamental assets for us to hold.” The decentralized finance (defi) project’s blog post adds:
The exact amount of the Treasury’s 6,619,923.5 MIM tokens and 10,380,153.06 CRC tokens are available.
Abracadabra’s blog post also asks people with outstanding loans to repay the balance while the peg is low in order to rebalance the MIM-3pool.
“As we write this post, the health of the Curve pool continues to improve and we fully expect the MIM peg to be restored shortly. In addition, we plan to share a more detailed set of dates around when and how repayment will occur,” Abracadabra’s blog post concludes.
USDD and MIM have been volatile, while the USDN stablecoin neutrino has dropped below $1 parity. At 6:05 pm (ET), it traded for $1. However, USDN fell to $0.931 earlier in the day.
How do you feel about Saturday’s stablecoin magic Internet money (MIM), depegging? What do you think about Abracadabra’s blog post statement? Comment below and let us know how you feel about the subject.
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