Abracadabra’s MIM Stablecoin Breaks Dollar Peg by About 50% as Project Launches Emergency Measures
Summary
- Abracadabra said its DeFi platform stablecoin MIM plunged about 50% below its dollar peg, prompting an emergency response.
- The project said it aims to restore the peg by raising borrowing rates across all Cauldron markets, encouraging debt repayment and shrinking MIM supply.
- MIM rebounded from $0.74 to $0.89 before sliding again to $0.49, and the project said restoring market confidence and liquidity is now the top priority.
Forecast Trend Report by Period
Abracadabra’s Magic Internet Money, or MIM, fell to less than half of its $1 peg, prompting the decentralized-finance project to roll out emergency measures.
Cointelegraph reported on June 25 that Abracadabra said in a post on its official X account that it is taking the MIM depeg seriously and implementing urgent steps to address it.
The project will immediately begin raising borrowing rates across all Cauldron markets in stages. The move is intended to encourage borrowers to repay debt, reduce the amount of MIM in circulation and help restore the peg.
MIM is an overcollateralized stablecoin issued against yield-bearing cryptocurrencies. It was launched in 2021, and roughly $104 million remains in circulation.
The token fell to $0.74 in mid-June and then briefly recovered to $0.89. On June 25, it slid again to $0.49, marking a sharp breakdown in its peg.
Abracadabra said the latest drop should give borrowers an incentive to repay debt at a discount, accelerating the contraction in MIM supply. Restoring market confidence, normalizing liquidity and recovering the peg are its top priorities.
The project had already intervened on June 15 after MIM first moved off its peg, deploying $100,000 into a key liquidity pool on Curve Finance.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
