**“**Frog nation, #occupydefi” if you are active on crypto Twitter you will have come across this hashtags over the past few weeks.

The team behind it is the Abracadabra money team, the team behind $Spell, the token launched in May, and has already crossed a billion dollar market cap and entered the top 100 crypto’s based on market cap.

Abracadabra money, along with OlympusDAO( ohm) and Wonderland(Time) are the new upstarts leading the “DeFi 2.0” narrative.

• Background of Abracadabra Money and why it is important.
• What is Abracadabra money ?
• How is Abracadabra money innovative ?
• What are the tokens in Abracadabra money protocol ?
• The tokenomics of Spell?
• What is Abracadabra money, future plans and partnerships ?

This article will provide you with the answers to these questions.

Background

Stablecoins are one of the most important inventions of crypto, stablecoins made it possible to onboard new people into crypto.

The leading stablecoins and the most adopted stablecoins (USDT and USDC) are facing a lot of issues from overzealous regulators, and they are also centralized.

The basic premise of crypto is decentralization, moving forward we need a true decentralized stablecoin and Abracadabra Money is working on giving us a true decentralized stablecoin.

What is Abracadabra Money ?

Previously when you stake your crypto for this example we are going to use USDT into an Interest earning protocol like yearn, you won’t be able to use it, as it is illiquid and it’s just sitting there, so you have capital but can’t use it.

More recently when you deposit crypto into a vault, you receive a representative token, like a receipt, for example if you deposit USDT into yearns vault, you will receive (yvUSDT), this representative tokens are called interest bearing liquid-staking tokens(ibTokens).

Interest bearing liquid- staking tokens(Ibtokens) are tokens that offer you the ability to deposit and earn interest on your crypto, whilst being able to utilize the Ibtoken itself, to earn more yield.

Abracadabra.Money** **is a lending platform that uses interest-bearing tokens(ibTKNs) as collateral to borrow a USD pegged stablecoin(Magic Internet Money-MIM) that can be used as any other traditional stablecoin.

Abracadabra supercharges your Defi journey by letting capital that previously can’t be put to further use, be used in different creative ways.

How does it Work ?

Teju has $10,000 USDT and she wants to deposit into a yearn vault and earn interest, but she also doesn’t want to lock up her capital and want to maximize her yield, this is what Teju will do with the magic of Abracadabra to generate more yield.

• Deposit $10,000 into a yearn vault and get her yvUSDT ibtokens.
• Teju now has yvUSDT which has a current value of $10,000.
• Teju took her $10,000 yvUSDT to Abracadabra.
• Teju chooses how much risk she is willing to take, and because Teju is a true Ape, she will mint 90 percent of her collateral and thereby get $9000 MIM.
• Teju will be paying an interest rate of 0.8%. The collateral determines your interest rate.
• Teju can swap her MIM in the MIM3pool into USDT.
• Teju can return the borrowed MIM plus interest at any time and get back her collateral.

Teju has about $9000 to play with, she can either buy other tokens, deposit to increase her yield, or do a lot other of creative stuffs with it and the best part of it is, as long as Teju control her collateral ratio and risk, there is little danger of her getting liquidated.

Abracadabra money enables you to put to use capital that wouldn’t have been put to use otherwise.

Abracadabra money has two tokens, MIM and Spell.

MIM (Magic Internet Money)

MIM

Magic internet money(MIM) is a stablecoin that is backed by interest bearing tokens.

For a user to borrow MIM they need to deposit an interest bearing token.

The peg of MIM to the USD is maintained using arbitrage.

MIM aims to be a true decentralized, multichain stablecoin.

For a truly decentralized internet we need true decentralized stable coins, the current market leaders USDT and USDC are very centralized and constantly coming under scrutiny by regulators.

The other alternative DAI by MakerDAO, has become more reliant on USDC, a centralized stablecoin.

Squirrel, one of the Abracadabra team members, has this to say about DAI “DAI has become a very unattractive stablecoin. We were fans when it was Ethereum-collateralized, but at this stage, DAI is 60% collateralized by USDC. A supposedly decentralized stablecoin that is primarily collateralized by a centralized stablecoin, it’s ridiculous”

1 DAI is currently backed by:

USDC — $0.45

ETH — $0.36

WBTC — $0.08

PAX — $0.06

The rest of the coins represent $0.05 of the total backing.

MIM is already a multi-chain stablecoin, by leveraging Anyswap cross chain protocol, users can already transfer their MIM across chains.

New MIM tokens are minted by a multisign, deposited in the kashi markets smart contracts, and then injected into circulation only after the user deposits the collaterals.

MIM is in a unique position to capture the market, it’s the first collateralized stable coin and Along with UST, the two leading decentralized stablecoins, and we need true decentralized stablecoins moving forward.

Top stablecoins | Source: Thedefiant.io

SPELL TOKEN

Spell

SPELL

SPELL token is the governance and incentive token of the abracadabra protocol.

It is used to incentivize users to provide liquidity into Abracadabra in order to earn yield.

It also grants holders voting rights and governance to change the platform parameters such as future collateral options, liquidation fees, and Total value locked (TVL).

Single side stakers of spell also get to share from the fees generated by the protocol, spell stakers receive up to 75% of the interest payments of the protocols loans via SPELL tokens that are rewarded to the stakers.

Tokenomics

Initially there was a total supply of 420 Billion, but it was reduced by 50 percent by performing a unique token burn event. Therefore Spell has a Max supply of 210 Billion.

Spell token Distribution | Source: Abracadabra.Money

SPELL tokens are distributed as follows:

• 63% will be used to incentivize Liquidity providers and other liquidity mining programs.
• 7% was distributed at IDO
• 30% of the total supply was allocated to team members and has a 4 years vesting schedule.

Team tokens Vesting Schedule

SPELL currently has a circulating supply of 59.23 Billion.

SPELL has surged to over a Billion dollars market cap and they are already generating more revenue than MakerDAO, despite MakerDAO having a bigger market cap.

SPELL generated $2,366,00 in fees last week, while MakerDAO generated $1,192,921.

SPELL VS MKR | Source: byebyedai

Roadmap And Future plans

The abracadabra money team are constantly building and they are coming after DAI and the other centralized stablecoins, Stablecoins like USDT, USDC and BUSD comprise of about $133 Billion in circulation and with the regulators constantly haggling USDT and USDC in particular, there is a big addressable market for MIM, and demand for decentralized stablecoins will only increase, recently Abracadabra team are planning to Partner with the Terra team(UST), in order to compete together against centralized stablecoins.

MIM meets UST

Summary

The frog nation community and the “DeFi 2.0” crowds are also behind SPELL and MIM, and they are building a powerful community and the demand for decentralized stablecoins will only increase, The team builds fast, have a great community and the future looks bright for Abracadabra money.

I will leave you with a spell book.

Cast a SPELL

Disclaimer:* This article is intended for educational and informational purposes only, and should not be construed as investment or financial advice.*