Abracadabra takes emergency action as MIM stablecoin depeg worsens
Cointelegraph 2026-06-25 03:22:05
Context: Abracadabra, a decentralized finance platform, has launched emergency measures to address the depegging of its stablecoin, Magic Internet Money (MIM), which fell 50% below its $1 peg. The protocol is taking steps to encourage debt repayment and reduce the outstanding MIM supply, amidst a broader market downturn and thin liquidity in decentralized exchange pools. The MIM depegging began in mid-June and worsened on Wednesday, prompting Abracadabra to raise interest rates across all Cauldrons.
Key Facts
- Abracadabra's stablecoin, Magic Internet Money (MIM), fell 50% below its $1 peg, with its value plunging to 49 cents on Wednesday, according to CoinMarketCap.
- The protocol is raising interest rates across all Cauldrons, including deprecated markets, to encourage debt repayment and reduce the outstanding MIM supply, effective immediately.
- The current circulating supply of MIM is about $104 million, and the depegging creates a natural incentive for borrowers to repay debt at a discount, accelerating supply contraction and strengthening the path back to the peg.
- Abracadabra had previously injected $100,000 into its primary liquidity pool on Curve Finance on June 15, when the stablecoin first slipped from its peg, to restore balance across Curve Pools.
- The MIM stablecoin is minted by borrowing against yield-bearing tokens in Abracadabra's "Cauldrons," and relies on crypto collateral and deep liquidity pools, primarily on the Curve Finance platform, to maintain its $1 peg.