The Magic Internet Money (MIM), a USD soft-pegged stablecoin minted by the Abracadabra.money decentralized platform, began moving away from the $1 and is currently de-pegged to $0.96 as rumors of it being “nearly insolvent” spreads FUD.
The de-pegging comes amid a sharp decline in crypto markets, raising concerns about the assets that underpin MIM’s value.
In a series of tweets, Autism Capital claimed that the MIM stablecoin and Abracadabra are “nearly insolvent” due to $12 million in bad debt from the Terra crash.
“Abracadabra immediately took down their analytics dashboard so they could “upgrade” it. The Abra team assured our autist that the timing of their analytics dashboard going down was a total coincidence,” the tweet stated.
According to Abracadabra creator Daniele Sestagalli, the Treasury has more assets than liabilities. He revealed the network’s Treasury address, disclosing that the company has more than $12 million in tokens.
Dani Sesta also mortgaged SPELL and borrowed more MIM, only to have them liquidated later. If the above bad debt occurs, there will be an unsecured supply of MIM stablecoins on the market.
The Wonderland Treasury, which merged with Abracadabra, was spotted withdrawing approximately $57 million USDC from a MIM Curve liquidity pool leading to an unbalanced pool.
The lack of liquidity may cause MIM to be further de-pegged, especially if traders dump the token in fear of further losses. The team behind MIM stablecoin must be concerned about the $300 million at stake, and they are expected to act quickly against the de-peg.
TRON’s USDD stablecoin lost its $1 peg earlier this week because of many short-sellers attacking TRX, the network’s native token on Binance.
The tweets also discuss Wonderland’s connection with Sifu, the co-founder of QuadrigaCX, which was founded to be involved in one of the largest cryptocurrency scams.
