Abracadabra takes emergency action as MIM stablecoin depeg worsens
Abracadabra launched emergency measures after its crypto-collateralized stablecoin, Magic Internet Money (MIM), fell more than 50% below its $1 peg. The protocol said it will gradually raise interest rates across all Cauldrons, including deprecated markets, to encourage borrowers to repay debt, burn MIM, reduce supply, and help restore the peg. MIM’s depeg worsened after slipping to 74 cents in mid-June, briefly recovering, then falling to about 49 cents. MIM has a circulating supply of roughly $104 million and depends on crypto collateral plus deep liquidity, mainly on Curve Finance, to maintain its peg. Abracadabra previously added liquidity to Curve to stabilize markets after withdrawals. The depeg highlights how overcollateralized DeFi stablecoins can still break down in thin-liquidity, risk-off conditions, especially amid a broader crypto market decline.
