It has been reported that Abracadabra, a cross-chain stablecoin lending protocol, operates on Ethereum, Binance Smart Chain (BSC), Fantom, Avalanche, and Arbitrum. Along with MIM, the project also has a SPELL governance token that can be staked on the protocol.
However, the project describes itself as a “spell book” that enables users to provide collateral via interest-bearing tokens, such as yvUSDC and xSUSHI, and to borrow the MIM stablecoin against their tokens.
The website read:
“To reverse the spell, the caster simply returns the conjured MIMs to the spell book. Then the magically locked interest-bearing tokens are released.”
The report said that interest-bearing tokens such as xSUSHI provide the hodler with a cut of the fees from the decentralized exchange (DEX) SushiSwap. Abracadabra launched in May, and according to CoinGecko, MIM has surged to seventh on the stablecoin rankings and has a market capitalization of $1.14 billion, as of October 8.
Likewise, MIM’s meteoric rise suggests that it could provide strong competition to the popular platform soon while MakerDAO’s Dai stablecoin currently sits in fourth with a market cap of $6.4 billion. By contrast, Dai was launched back in December 2017 and surpassed a market cap of $1 billion in late 2020.
A caveat to that is that there was significantly less activity in the crypto market when Dai was initially launched. Abracadabra takes fees from the interest paid on the loans. It surpassed MakerDAO last week in terms of fees, generating $1.27 million versus $969,000, respectively. MakerDAO still looms over Abracadabra in terms of total value locked (TVL), with $13.7 billion–$1.7 billion.
The pseudonymous co-founder of Abracadabra, who goes by the name “Squirrel,” said:
“By being multi-chain with Abracadabra, we are the first and only decentralized stablecoin that can be minted on various chains.”
Thus, Squirrel also highlighted that its fee structure has contributed to its rapid adoption, as SPELL stakers receive 75% of the interest payments on the protocols’ loans via SPELL tokens that are rewarded to the stakers.