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Magic Internet Money token depegs as Terra (LUNA) domino effect persists

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Magic Web Cash (MIM), a US dollar-pegged stablecoin of the Abracadabra ecosystem, joins the rising record of tokens dropping their $1 worth amid an premature crypto winter. The sudden de-pegging of the MIM token commenced roughly on June 17, 7:40 pm ET, which noticed the token’s value drop to $0.926 in simply three hours.

Terra’s LUNA and TerraUSD (UST) loss of life spiral not solely affected the buyers but in addition had a adverse influence on quite a few crypto tasks, together with Abracadabra’s MIM token ecosystem — as alleged by Twitter deal with @AutismCapital.

Depegging of Magic Web Cash (MIM) token value chart. Supply: CoinMarketCap

Citing an insider scoop, AutismCapital claimed that Abracadabra accrued $12 million in unhealthy debt as a direct results of Terra’s sudden downfall “as a result of liquidations could not occur quick sufficient to cowl the protocol’s MIM liabilities.”

Daniele Sestagalli, the founding father of Abracadabra, nevertheless, refuted the claims of insolvency by guaranteeing to have sufficient funds to pay again the piling money owed — which has been attributed to the falling MIM costs. Sestagalli acknowledged:

“[The Abracadabra] Treasury has more cash than the debt and $CRV are precious for the protocol.”

Doubling down on his stance, Sestagalli additional publicly shared the treasury address holding $12 million in belongings whereas asking involved buyers to confirm the identical utilizing on-chain knowledge.

Alternatively, Autism Capital alleged that Sestagalli’s unhealthy debt was created 5 days in the past and shared the beneath screenshot exhibiting his dialog about the identical on MIM’s Discord group.

Sestagalli’s dialog on MIM Discord group. Supply: @AutismCapital

Whereas the chance of insolvency continues to threaten the Abracadabra protocol, both by the MIM treasury persevering with to dump in worth or extra unhealthy debt created, buyers are suggested to maintain monitor of market fluctuations and do their very own analysis (DYOR) earlier than making funding selections. 

Associated: USDD stablecoin falls to $0.97, DAO inserts $700M to defend the peg

5 days in the past, on June 13, Stablecoin protocol USDD’s value dipped to $0.97 on main crypto exchanges.

To assist out throughout the market fluctuations, the Tron DAO Reserve introduced that it acquired 700 million USD Coin (USDC) to defend the USDD peg. Because of the fund infusion, the group behind the stablecoin defined that the collateralization ratio of USDD is now boosted to 300%.