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.
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