Amid the crypto market carnage this weekend, another stablecoin slipped below the $1 peg on Saturday, June 18, as the crypto asset called magic internet money (MIM) briefly dropped to a low of $0.914 per 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 Regains Strength After the Fall to $0.91
In mid-May 2022, the entire world witnessed an algorithmic stablecoin called terrausd (UST) depeg from its $1 parity and slide below a U.S. penny in value. 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. The Tron Reserve DAO has been adding significant amounts of reserves like USDC and TRX to keep the token overcollaterized.
Despite the funds being added, on June 18, USDD slipped to a low of $0.948 per unit and the crypto token is currently exchanging hands for $0.964 at the time of writing at 6:05 p.m. (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 is leveraged on various blockchains like Ethereum, Fantom, BSC, and Avalanche. Despite the slide to $0.91, MIM did rebound on Saturday and at 6:05 p.m. (ET), it was trading for $0.992 per unit. 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. The day prior, one Twitter account 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 Dispells Insolvency Rumors and Addresses 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…
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