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Abracadabra

Abracadabra

Abracadabra is a lending protocol that allows users to produce magic internet money (MIM).

Overview

Abracadabra is a lending platform that allows users to provide collateral in the form of different interest-bearing crypto in order to borrow Magic Internet Money (MIM), a USD-pegged stable coin that users can swap for any other traditional stable coin.

Abracadabra can be used if the user has any of the following interest-bearing tokens (ibTKN):

  • yvWETH
  • yvUSDC
  • yvYFI
  • yvUSDT
  • xSUSHI
How Abracadabra works

To use Abracadabra, users follow four steps:

1. Collaterals (in the form of interest-bearing tokens) are initially deposited on Abracadabra

2. An interest-bearing debt is allocated and assigned to the borrower

3. Magic Internet Money tokens are deposited into the borrower's wallet

4. User can then use their MIM wherever they want

If a user wants to regain control of their collateral, they have to return the borrowed MIM tokens and pay back all incurred interest before the collateral will be released.

Magic Internet Money

A MIM token is a USD-pegged stable coin that can be traded on other markets alongside other stable coins. MIM is backed by ibTKNS, which means collateral value keeps increasing. MIM tokens are minted by the users on Ethereum and are only put into circulation once they have been collateralized.

Spell tokens

The main function of SPELL is to provide stake in Abracadabra and obtain SPELL tokens, an altcoin that powers Abracadabra.Having stake has several benefits, the first being that it grants stake holders voting rights for things such as TVL, liquidation fees, and future collateral options. Second, it grants holders a claim on fees generated by Abracadabra.

Partnership

On September 24th, 2021, Abracadabra announced a partnership with Olympus (OHM), the decentralized reserve currency protocol, and officially launched the sSPELL lending market.The partnership provides users the possibility to buy discounted SPELL tokens in exchange for ETH-SPELL LP tokens, which will then be redirected to Abracadabra. This gives users the opportunity to begin building their own liquidity, through a process called bonding.

The bonding program with Olympus, started on September 29th 2021, allows Abracadabra to acquire liquidity by buying it from users, using SPELL emissions. The emissions have been set to 50m SPELL per week.

The program provides users with benefits, such as the ability to buy discounted SPELL in comparison to the market value, provide no exposure to Impermanent Loss, and always make available some liquidity for ETH-SPELL.

Timeline

Patents

Further Resources

Title
Author
Link
Type
Date

Defi review: Abracadabra.money - Joel Foster - Medium

Joel Foster

Web

August 25, 2021

References

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