Abracadabra Money’s stablecoin Magic Internet Money (MIM) has surged past a $1 billion total supply this month as the project works to provide competition to MakerDAO.
Abracadabra is a cross-chain stablecoin lending protocol that operates on Ethereum, Binance Smart Chain (BSC), Fantom, Avalanche, and Arbitrum. Along with MIM, the project also has a SPELL governance token which can be staked on the protocol.
The project describes itself as a “spell book” that enables users to provide collateral via interest-bearing bearing tokens such as yvUSDC, xSUSHI and to borrow the MIM stablecoin against their tokens.
“To reverse the spell, the caster simply returns the conjured MIMs to the spell book. Then the magically locked interest-bearing tokens are released,” the website reads.
Interest-bearing tokens such as xSUSHI provide the hodler with a cut of the fees from the decentralized exchange (DEX) SushiSwap.
Abracadabra launched in May, and according to Coingecko, MIM has surged to seventh on the stablecoin rankings with a market cap of $1.14 billion at the time of writing.
While MakerDAO’s DAI stablecoin currently sits at fourth with a market cap of $6.4 billion, MIM’s meteoric rise suggests that it could provide strong competition to the popular platform soon.
By contrast, DAI was launched back in December 2017 and surpassed a market cap of $1 billion in late 2020. A caveat to that however, is that there was significantly less activity in the crypto market when DAI was initially launched.
Abracadabra takes fees from the interest paid on the loans. It surpassed MakerDAO last week in terms of fees, generating $1.27 million versus $969,000 respectively. MakerDAO still looms over Abracadabra in terms of total value locked (TVL), with $13.7 billion to $1.7 billion.
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The pseudonymous co-founder of Abracadabra, who goes by the name “Squirrel” told The Defiant on Oct. 7 that the project’s success has been driven by its efforts to enable support for multiple blockchains:
“By being multi-chain with Abracadabra, we are the first and only decentralized stablecoin that can be minted on various chains.”
Squirrel also highlighted that its fee structure has contributed to its rapid adoption, as SPELL stakers receive 75% of the interest payments on the protocols’ loans via SPELL tokens that are rewarded to the stakers.