Sunday, October 1, 2023

Magic Internet Money Coin Depegs After Terra’s Collapse

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The Magic Internet Money coin de-pegged after the Terra collapse, following the domino effect on the market so let’s have a closer look at today’s altcoin news.

Citing an insider scoop, Autism Capital claimed that Abracadabra accrued $12 million in debt as a result of TErra’s sudden downfall which was refuted by Daniele Sestagalli. The Magic Internet Money coin is a US dollar-pegged stablecoin of the Abracadabra ecosystem that joined the list of tokens that lost the $1 value amid the crypto winter. The de-pegging of the MIM Token commenced on June 17 which saw the token price drop to $0.926 in a few hours.

Terra’s LUNA and TerraUSD death spiral was affected by investors but had a negative impact on plenty of other projects like the MIM Token ecosystem. Citing the Insider Scoop, AutismCapital claimed that the Abracadabra ecosystem accrued $12 million in debt as a result of Terra’s downfall because the liquidation can’t happen fast enough and cover the MIM liabilities. The founder of Abracadabra Daniele Sestagalli refuted teh claims of insolvency by ensuring they have enough funds to pay back the debts:

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

Doubling down on the stance, Sestagalli shared the treasury address holding $12 million in assets while asking the investors to verify the same using on-chain data. Autism Capital also alleged that Sestagalli’s bad debt was created a few days ago and shared a screenshot showing the conversation about teh same on the MIM discord group. The risk of insolvency continued to threaten the Abracadabra protocol as the MIM treasury continued to drop in value and more debt was created so the investors were advised to keep track of the market fluctuations.

A few days ago, the stablecoin protocol USDD’s price dropped to $0.97 on most exchanges. To help with the market fluctuations, the Tron DAO Reserve announced that it got 700 million USD Coin to defend the USDD peg and as a result of the fund infusion, the team explained that the collateralization ratio of USDD which is boosted to 300%.

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