As the project seeks to compete with MakerDAO, Abracadabra Money’s stablecoin Magic Internet Money (MIM) has surpassed a $1 billion total supply this month.
Abracadabra is an Ethereum, Binance Smart Chain (BSC), Fantom, Avalanche, and Arbitrum cross-chain stablecoin lending mechanism. The project also contains a SPELL governance token that may be staked on the system, in addition to MIM.
The project bills itself as a “spell book” that allows users to give collateral in the form of interest-bearing tokens like yvUSDC and xSUSHI, as well as borrow the MIM stablecoin in exchange for their tokens.
“The caster merely returns the summoned MIMs to the magic book to reverse the spell. The magically locked interest-bearing tokens are then released,” according to the website.
Hodlers of interest-bearing tokens like xSUSHI gets a portion of the fees from the SushiSwap decentralized exchange (DEX).
MIM has climbed to eighth place in the stablecoin rankings, according to Coingecko, with a market worth of $1.14 billion at the time of writing.
MIM’s quick surge suggests that it could soon give strong competition to MakerDAO’s DAI stablecoin, which is presently ranked fourth with a market cap of $6.4 billion.
DAI, on the other hand, was founded in December 2017 and reached a market capitalization of $1 billion in late 2020. However, there was substantially less activity in the crypto market when DAI was first created, so this is a caution.
Fees are deducted from the interest paid on the loans from Abracadabra. Last week, it outperformed MakerDAO in terms of fees, generating $1.27 million compared to $969,000 for MakerDAO. In terms of total value locked (TVL), MakerDAO still has a $13.7 billion lead over Abracadabra ($1.7 billion).
The project’s success has been driven by its efforts to enable compatibility for several blockchains, according to Abracadabra’s pseudonymous co-founder “Squirrel,” who told The Defiant on Oct. 7:
“By being multi-chain with Abracadabra, we are the first and only decentralized stablecoin that can be minted on various chains.”
Squirrel also highlighted that its fee structure has contributed to its rapid adoption, as SPELL stakers receive 75% of the interest payments on the protocols’ loans via SPELL tokens that are rewarded to the stakers.
