Abracadabra's MIM Stablecoin Briefly Lost Dollar Peg as FTX's FTT Token Tanked

FTT is the largest collateral backing MIM, accounting for 33% of the total collateral locked in Abracadabra's "cauldrons."

By Omkar Godbole

Nov 8, 2022 at 12:54 p.m. UTC

Updated Nov 9, 2022 at 3:55 p.m. UTC

CDCROP: Magic Internet Money MIM chart (Coingecko) — (CoinGecko)

Omkar Godbole

Omkar Godbole was a senior reporter on CoinDesk's Markets team.

Follow @godbole17 on Twitter

Decentralized platform Abracadabra.money's magic internet money (MIM), a U.S. dollar-pegged stablecoin, dropped below $1 early Tuesday as crypto exchange FTX's native token FTT tanked.

MIM briefly fell to as low as 95 cents during the early Asian hours, hitting the lowest since at least Terra's crash in May, according to data source CoinGecko.
FTT is the largest collateral backing MIM, accounting for 33% of the total locked in Abracadabra's "cauldrons," according to the official Abracadabra's website.
Cauldrons allow users to borrow MIM using another asset as collateral. Each cauldron is collateral specific.
"FTT is the single largest collateral asset for MIM with total value locked now standing at $120 million. The liquidation price for FTT is $6.76 (-61% from current levels)," Lewis Harland, a portfolio manager at Decentral Park Capital told CoinDesk.
FTT dropped below $22, an offer price suggested by FTX's sister concern and trading firm Alameda's CEO Caroline Ellison to Binance CEO Changpeng "CZ" Zhao on Sunday. The token went on to hit a 21-month low of $15 on Alameda contagion fears.
At press time, FTT was changing hands at $17.20 while MIM traded at around 99 cents.
"FTT is the largest collateral asset for MIM, so FTT decline is not great news for Abracadabra," Pseudonymous DeFi researcher @DefiIgnas tweeted.

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