Abracadabra's MIM Stablecoin Briefly Lost Dollar Peg as FTX's FTT Token Tanked

FTT is the largest collateral backing MIM, accounting for 33% of the total collateral locked in Abracadabra's "cauldrons."

AccessTimeIconNov 8, 2022 at 12:54 p.m. UTC
Updated Nov 9, 2022 at 3:55 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Decentralized platform Abracadabra.money's magic internet money (MIM), a U.S. dollar-pegged stablecoin, dropped below $1 early Tuesday as crypto exchange FTX's native token FTT tanked.

  • MIM briefly fell to as low as 95 cents during the early Asian hours, hitting the lowest since at least Terra's crash in May, according to data source CoinGecko.
  • FTT is the largest collateral backing MIM, accounting for 33% of the total locked in Abracadabra's "cauldrons," according to the official Abracadabra's website.
  • Cauldrons allow users to borrow MIM using another asset as collateral. Each cauldron is collateral specific.
  • "FTT is the single largest collateral asset for MIM with total value locked now standing at $120 million. The liquidation price for FTT is $6.76 (-61% from current levels)," Lewis Harland, a portfolio manager at Decentral Park Capital told CoinDesk.
  • FTT dropped below $22, an offer price suggested by FTX's sister concern and trading firm Alameda's CEO Caroline Ellison to Binance CEO Changpeng "CZ" Zhao on Sunday. The token went on to hit a 21-month low of $15 on Alameda contagion fears.
  • At press time, FTT was changing hands at $17.20 while MIM traded at around 99 cents.
  • "FTT is the largest collateral asset for MIM, so FTT decline is not great news for Abracadabra," Pseudonymous DeFi researcher @DefiIgnas tweeted.

FTT is the largest collateral asset for MIM. (Abracadabra.money)
FTT is the largest collateral asset for MIM. (Abracadabra.money)


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.