The bulls appear to be taking over the entire crypto market which, in turn, is attracting more investors to the nascent space. In that context, Abracadabra Money’s stablecoin Magic Internet Money (MIM) has surpassed $1 billion in total supply this month as the project strives to offer competition to MakerDAO.
By description, Abracadabra is a cross-chain stablecoin lending protocol. The platform operates on Avalanche, Binance Smart Chain (BSC), Ethereum, Fantom, and Arbitrum. Together with MIM, the project also has a SPELL governance token that can be staked on the protocol.
Abracadabra Money allows users to offer collateral through interest-bearing tokens and borrow the Magic Internet Money stablecoin against all their holdings. This project describes itself as a “spell book” that lets users offer collateral through interest-bearing bearing tokens like yvUSDC, xSUSHI and borrow the MIM stablecoin against their tokens.
The site reads:
“To reverse the spell, the caster simply returns the conjured MIMs to the spell book. Then the magically locked interest-bearing tokens are released.”
Interest-bearing tokens like xSUSHI offer the holder a cut of the fees from the decentralized exchange (DEX) SushiSwap. Abracadabra launched in May, and based on data from Coingecko, MIM has surged to seventh on the stablecoin list with a market capitalization of $1.14 billion at the time of publication.
Currently, MakerDAO’s DAI stablecoin sits at fourth with a market capitalization of $6.4 billion, MIM’s meteoric rise indicates that it might offer massive competition to the popular platform soon.
On the contrary, DAI was unveiled in December 2017 and exceeded a market cap of $1 billion in late 2021. A caveat to this, however, is that there was considerably less activity in the cryptocurrency market when DAI was originally launched.
Abracadabra takes fees from the interest that is paid on the loans. It surpassed MakerDAO in the past week in terms of fees, generating $1.27 million compared to $969,000 respectively. MakerDAO still looms over Abracadabra in terms of the total value locked (TVL), with $13.7 billion to $1.7 billion.
The pseudonymous co-founder of the project is known as ‘Squirrel’. He told The Defiant on October 7 that Abracadabra’s success has been pushed by its efforts to enable support for many blockchains:
“By being multi-chain with Abracadabra, we are the first and only decentralized stablecoin that can be minted on various chains.”
Squirrel also mentioned that its fee structure has contributed to its quick adoption, as SPELL stakers get 75% of the interest payments on the protocols’ loans through SPELL tokens that are mostly rewarded to the stakers.