Abracadabra is a cross-chain stablecoin lending protocol that operates on Ethereum, Binance Smart Chain (BSC), Fantom, Avalanche and Arbitrum. The project’s protocol is also backed by a governance token called SPELL.
One of the seven stablecoins in the world, MIM has surged to seventh on this month’s rankings. Is Abucadabra.Money, the stablecoin we’ve been waiting for? Read further to learn more about the cross-chain stablecoin Abracadabra and the governance token SPELL.
Abucadabra.Money Is The Latest To Challenge MakerDAO With A Stablecoin
In a bid to challenge MakerDAO with its stablecoin, Abucadabra.Money has surpassed a $1 billion supply of Magic Internet Money (MIM) this month.
The project presents itself as a “spell book” that allows users to borrow MIM stablecoins in exchange for yvUSDC or xSUSHI tokens, which bear an interest rate.
When reversing the spell, the caster simply returns the summoned MIMs to their spell books. Then the magically locked interest-bearing tokens are released,” the website explains.
With interest-bearing tokens like xSUSHI, holders receive a portion of the fees from the SushiSwap DEX.
At the time of writing, the market capitalization of abracadabra was $1.14 billion, according to CoinGecko’s rankings.
The Fierce Competition of the Stongest Stablecoins
MIM’s meteoric rise suggests that it may soon show strong competition to MakerDAO’s Dai stablecoin. MakerDAO’s Dai stablecoin currently ranks fourth with a $6.4 billion market cap.
In contrast, Dai was launched in December 2017 and debuted in late 2020 with a market capitalization of $1 billion. It should be noted, however, that the crypto market was much less active at the time Dai was first launched.
Abracadabra charges fees based on interest collected. The platform generated $1.27 million in fees last week, topping MakerDAO’s $969,000.
Abracadabra still lags behind MakerDAO, with $13.7 billion versus $1.7 billion in total value locked (TVL).
Abracadabra’s pseudonymous co-founder, known as squirrel, told The Defiant on Thursday that the success of the project is driven by its 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.”
The Squirrel also explained that SPELL stakeholder receive 75% of interest payments through tokens that they receive as rewards for participating in the protocols.