Cryptocurrency

3 reasons why DeFi users are optimistic about Abracadabra, Magic Internet Money and SPELL

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Stablecoins and their use in decentralized finance (DeFi) played a key role in the cryptocurrency bull market in 2021 because they allow investors to participate in more and more agreements that provide high-yield equity pools and can simplify transactions Process without using a centralized exchange.

The Abracadabra.money DeFi protocol and its native SPELL token have been widely adopted due to their focus on creating a truly decentralized ecosystem and asset-backed stable currency.

Data from Cointelegraph Markets Pro with Transaction view It shows that after hitting a low of $0.0114 on October 15th, the price of SPELL rose by 178.55% on November 1st, setting a record high of $0.035, and its 24-hour trading volume soared to $10982 million.

SPELL/USD 4-hour chart. Source: TradingView

Three reasons why SPELL attracts the attention of DeFi users is the growth of Magic Internet Money (MIM) as a fully decentralized, cross-chain stable currency. Numerous cross-chain integrations have expanded the influence of MIM and SPELL in the entire ecosystem. And the governance of tokens and the structure of token economics.

Decentralized stablecoin growth

One of the biggest factors that attract the attention of active DeFi users is Abracadabra’s native Magic Internet Money stablecoin, which is fully mortgaged and minted by depositing interest-bearing assets on the DeFi protocol.

According to data from Defi Llama, the total value locked in Abracadabra reached a record of US$4.15 billion on November 1, which shows the increasing popularity and adoption of MIM.

The total value locked on Abracadabra.money. Source: Defi Llama

According to CoinMarketCap’s data, the circulating supply of MIM has also grown steadily, reaching US$1.933 billion. The recent expansion is largely due to the expansion of assets that can be used as collateral to mint MIM, which now includes popular tokens such as Shiba Inu (SHIB), FTX Token (FTT), wrapped Olympus (OHM) and Fantom (FTM).

Cross-chain integration expands SPELL’s influence

The second reason investors pay close attention to SPELL is its expanding ecosystem, which has recently added cross-chain support for multiple blockchain networks, including Fantom and Binance Smart Chain (BSC).

BSC is the newest member of the Abracadabra ecosystem after the community voted for increased support for the network in a vote that ended on October 30th.

Other blockchain protocols currently supported by Abracadabra include Ethereum, Arbitrum, and Avalanche. The platform also benefits from multiple cross-protocol partnerships, including integrations with Convex Finance, Year.finance, Curve Finance, and SushiSwap.

related: Magic Internet Money exceeds $1B, set its sights on MakerDao

Favorable token economics and reduced circulating supply

Another factor that attracts the attention of DeFi investors is SPELL’s token economic structure, which includes voting on emissions governance to control inflation.

The team behind SPELL regularly monitors the issuance schedule of each DeFi pool in its ecosystem to ensure that new tokens are minted and used in the most beneficial way for the protocol and holders.

Due to the increase in adoption rate and price increase, a large number of tokens to be minted are no longer needed, so the team decided to reduce the issuance schedule by 20% starting from November 1. This effectively reduces the 8.7 billion SPELL tokens from the current circulating supply.

Looking ahead, the prospects of the project are still promising. The team also plans to further integrate SPELL and MIM into the Fantom ecosystem and provide new staking opportunities in Arbitrum and Avalanche.

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