Abracadabra Money is a cross-blockchain lending platform that allows users to earn money by using their interest-bearing assets. Money earned is in the form of Magic Interest Money (MIM) tokens which are stable coins pegged to the US dollar. SPELL is the native governance and staking token of the platform.
Decentralized Finance protocols have been shooting up in recent years. Along with these protocols their use cases also seem to be on a quick rise. Therefore, protocols that facilitate lending and borrowing activities using cryptocurrencies have changed the face of finance. One such magical protocol is Abracadabra Money. Let’s dive right into it!
What is Abracadabra Money?
Abracadabra is a lending protocol that operates cross-chains using a stable coin. It allows users to borrow money using their interest-bearing assets such as USDT, SUSHI etc. The platform uses these assets as collateral. Through which users get to borrow Magic Internet Money (MIM), Abracadabra’s USD pegged stable coin. You can use interest-bearing tokens to back MIM. It can be later swapped with any other traditional stable coin.
Using Abracadabra, users can make use of money their assets they own but are not using to generate money. In a specific case, it allows users to use the interest-bearing tokens obtained from staking as collateral to obtain MIM. The protocol was launched in May 2021. However, it has quickly taken over the DeFi world. Its stable coin MIM is not the 6th largest in DeFi category by market capitalization.
How does Abracadabra Money work?
The developers have used Ethereum blockchain to host the platform. It is also bridged to other networks such as Fantom and Avalanche using AnySwap. In order to achieve layer 2 solutions, the platform uses Arbitrum and its official bridge. Consequently, increasing its throughput without compromising on its security.
Moreover, the platform’s lending features have been built using Kashi Lending Technology. This enables the platform to provide isolated lending markets. Users can use it to adjust their risk tolerance according to the collateral they decide to use. The developers have linked Abracadabra to Curve’s website to enable swapping features. This allows uses to swap their MIM stable coins for other stables. Therefore, it’s a well-connected platform and this is how it provides cross-chain lending solutions to its users.
The Abracadabra Token, SPELL
The protocol’s native governance token is called SPELL. You can use the token for staking purposes and earn sSPELL. Using sSPELL, you can start using voting rights. You can also use the token to earn fees on the platform. The amount of sSPELL owned by an individual signifies their user share in the SPELL platform fee pool. Users do not have to worry about having sSPELL tokens. When the user chooses to unstake their tokens then they get SPELL tokens back, along with any additional SPELL tokens earned from the fees stake.
The main purpose of SPELL is to facilitate liquidity on the Abracadabra Money’s lending markets. 63% of the total money supply is allocated to the liquidity mining program.