What Is Magic Internet Money (MIM) and How Does It Work?
We are aware that there are numerous cryptocurrencies available on the market.
However, one of them is known as Magic Internet Money (MIM).
If you were considering Bitcoin (BTC), you were mistaken.
This term is also used for another digital money.
Abracadabra Money is a decentralized finance platform that allows users to create magical internet money.
Users may easily give collateral in a variety of cryptocurrencies and borrow MIM to use on many cryptocurrency trading platforms, decentralized financing (DeFi) protocols, and other websites.
In the following sections, we'll explain exactly what Magic Internet Money is, how it works, and why it's so vital.
What is MIM (Magic Internet Money) and what is it used for?
Let's start with a definition of Magic Internet Money.
Magic Internet Money (MIM) is a cryptocurrency tied to the Abracadabra Money decentralized financial platform. Abracadabra Money allows users to manufacture Magic Internet Money (MIM) by providing collateral in the form of different interest-bearing crypto assets, according to the official website.
Users can give collateral using yvYFI, yvUSDT, yvUSDC, xSUSHI, and a variety of other crypto assets.
This isn't the first time we've seen a cryptocurrency project like Magic Internet Money (Abracadabra Money) grow in popularity.
Users will be able to borrow MIM tokens, which act as a stablecoin, after that.
Stablecoins are digital currencies whose value does not fluctuate.
That implies that the price of a stablecoin is generally tied to a fiat currency like the US dollar or the Euro, among others.
In this situation, Magic Internet Money serves as a stablecoin that consumers may exchange for any other stablecoin on various crypto trading platforms.
Investors may easily swap their coins without having to rely on a centralized cryptocurrency trading platform thanks to swapping platforms (crypto exchange).
Farming, borrowing, and staking are the three basic solutions used by Abracadabra Money.
You may also utilize the bridge or the switching platform.
Curve.fi, a prominent decentralized financial cryptocurrency network, is linked to the exchanging platform.
Meanwhile, Abracadabra Money would offer the bridge immediately.
It's worth noting that Abracadabra Money is one of the most sophisticated decentralized money platforms available.
As a result, the objective is to provide higher liquidity so that investors may trade and swap more easily.
Let's get into the specifics of a crypto platform that gives Magic Internet Money to its customers' farming, borrowing, and staking solutions.
Farm
The SPELL token is used in Farm Abracadabra Money.
This coin is designed to give liquidity providers with the required incentives to participate in the network.
This is an excellent way for consumers to deposit coins and begin receiving SPELL token incentives.
However, there are a few things we should keep in mind when it comes to farming.
You may earn SPELL tokens as a liquidity provider.
And it is unquestionably a good thing.
However, relying on the same token to be awarded all of the time may result in you not being able to receive the same rewards as in the past.
For example, if the DeFi market grows and expands, new platforms will emerge with bigger benefits for users who hold more valuable tokens.
This occurs because in order to keep the incentives flowing, fresh SPELL tokens must be generated.
The production of additional SPELL tokens, on the other hand, devalues the token, as it has done in the past with many other cryptocurrency trading platforms (in the DeFi market).
As a result, users should be aware that they are utilizing a platform that will weaken the incentives for investors to offer liquidity over time.
It's also worth mentioning that this project collaborates with Olympus DAO.
This enables it to regain control of its cash flow.
Abracadabra can focus on offering better solutions thanks to Protocol-owned liquidity (POL).
Users on the platform can benefit from Abracadabra Money's expanded solutions and services.
Borrow
We should also discuss borrowing using Abracadabra Money.
The Magic Internet Money virtual money is obtained by depositing interest-bearing tokens (stablecoin).
This stablecoin may be used to purchase other virtual currencies such as USDT or USDC.
You'd be able to utilize MIM in places where it's allowed.
Consider that if your collateral (the MIM you borrowed) was insufficient to keep your position open, you would not be able to recover the collateral.
Nonetheless, the MIM you borrowed can be used to repurchase your collateral in the future (through other platforms).
This platform is quite similar to other cryptocurrency DeFi protocols that are already available on the market. Magic Internet Money tokens may be obtained by simply depositing cash as collateral.
Rather than relying on a single loan platform, the team behind this initiative chose to employ a variety of protocols in order to provide customers with more liquidity and alternatives.
This is also consistent with the implementation of Protocol owned liquidity (POL) that we mentioned in the previous section.
You can get your collateral back if you return your MIM and pay the interest cost.
This can be accomplished in a matter of seconds, thanks to the interplay of smart contracts.
Stake
The SPELL token should be discussed when it comes to staking on the Abracadabra Money platform.
The SSPELL virtual money will be awarded to those that stake this token.
This is one of the ways in which this DEFI technology might benefit investors.
You will also be able to collect fees using the SPELL tokens.
These fees will be paid to you and awarded on a regular basis.
However, keep in mind that the SSPELL lock will continue for 24 hours after you begin staking your SPELL tokens.
You will also be able to collect fees using the SPELL tokens.
These fees will be paid to you and awarded on a regular basis.
However, keep in mind that the SSPELL lock will continue for 24 hours after you begin staking your SPELL tokens.
Similar staking techniques are available in other DEFI systems.
This aids the initiative in reducing the amount of SPELL in circulation — at least for the time being.
Let's not forget that fresh SPELL tokens are issued on a regular basis to encourage users to supply liquidity on this platform.
This creates a situation where SPELL tokens are under persistent selling pressure.
This has happened in the past with various procedures.
Abracadabra Money should be able to strike a balance between SPELL issuance and incentivization.
The more incentives there are to supply liquidity, the better the services will be (more liquidity for investors), but the token will depreciate quicker.
Instead, a slower new issue of SPELL tokens would lead to consumers preferring to offer liquidity to other platforms rather than Abracadabra Money.
The assessment of the SPELL token would be slower in this scenario than in the preceding one. The Cryptocurrency Market's Magic Internet Money (MIM).
We've discussed Magic Internet Money and how it's classified as a stablecoin.
Indeed, since its introduction to the market, the coin has fluctuated around the $1
level.
Nonetheless, it's worth noting that the currency dropped by more than 2% for a brief period of time.
The token's price per coin hit $0.975 in August 2021.
This indicates that the price of Magic Internet Money was influenced by short-term selling pressure.
That's not all, though.
Following this event, the digital currency began to rise.
In late 2021, the price of this virtual currency increased by about 1%, bringing it to $1.01.
For a stablecoin, these are significant price changes.
However, it's probable that this occurred because the currency does not yet have enough liquidity to maintain its price consistent like other well-established virtual currencies (stablecoins) on the market.
However, the price of the virtual currency (Magic Internet Money) has been rather consistent in recent months and since its initial introduction.
It will be fascinating to observe how its price develops in the next months, as well as whether or not it decouples from its peg.
Token of SPELL
As previously stated, the SPELL token is extremely crucial in Abracadabra Money.
This is the Abracadabra Money ecosystem's native token.
Through yield farming and other alternatives, the purpose of this coin is to provide better governance decisions, collect fees, and incentivize liquidity.
SPELL is primarily a DEFI token that operates on the Abracadabra Money protocol.
It also has a relationship with the Magic Internet Money (MIM) ecosystem.
The SPELL coin makes it easy for users to vote on many governance elements thanks to its governance solutions.
As a result, investors and SPELL holders may help define the platform's future by taking part in active activities to develop the protocol.
Abracadabra Money fees would also be collected via the SPELL coin.
The platform may now employ the SSPELL token to compound benefits for users.
It's worth noting that users should be able to lock both their SSPELL tokens and their SPELL coins in order to be paid.
SPELL tokens might also be used to incentivise liquidity through yield farming and other methods like bonds.
SPELL pays liquidity providers that contribute tokens to various Abracadabra Money pools.
The greater the liquidity available, the greater the returns for investors.
Price of a SPELL Token
When it comes to the SPELL token, we've seen it explode in popularity in the latter months of 2021.
The coin was launched in 2021 and stayed quite steady until October.
The coin then began to rise, reaching an all time high of $0.034 in early November 2021.
Bitcoin and other virtual currencies were also at all time highs at the time, indicating a significant link with the cryptocurrency market.
However, in November 2021, things began to deteriorate.
The coin did indeed enter a bear market, with the price dropping below $0.01.
The digital currency then recovered to $0.0026 in early 2022, but this was not enough to keep it heading higher.
Then came a second sell-off.
In recent days, SPELL has dropped below $0.004 per coin.
This demonstrates the issue that many decentralized financial protocols, such as Abracadabra Money, are now experiencing with their incentivization paradigm.
Over incentivizing liquidity leads to a situation where the currency rapidly loses value.