MIM (Magic Internet Money) Lost Its Peg with Dollar as FTX’s FTT Tanked

Written by C, Fiona

Last updated: 2022-11-09

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Another domino is about to fall. Magic Internet Money (MIM) crypto stablecoin briefly lost dollar peg as the meltdown of FTX’s FTT.

Decentralized platform Abracadabra.money’s Magic Internet Money (MIM), a stablecoin pegged to U.S. dollar, fell below $1 early Tuesday as crypto exchange FTX’s native token FTT plummeted.

FTX’s FTT is the largest collateral backing MIM crypto, accounting for 33% of the total collateral locked in Abracadabra’s “cauldrons.”

MIM briefly fell to as low as $0.9520 during the early Asian hours, hitting the lowest since at least Terra’s crash in May, according to data source Coingecko.
FTT is the largest collateral backing MIM, accounting for 33% of the total locked in Abracadabra’s “cauldrons,” according to the official Abracadabra’s website.
Cauldrons allow users to borrow MIM using another asset as collateral. Each cauldron is collateral specific.
“FTT is the single largest collateral asset for MIM with total value locked now standing at $120 million. The liquidation price for FTT is $6.76 (-61% from current levels),” Lewis Harland, a portfolio manager at Decentral Park Capital told CoinDesk.
FTT dropped below $22, an offer price suggested by FTX’s sister concern and trading firm Alameda’s CEO Caroline Ellison to Binance CEO Changpeng “CZ” Zhao on Sunday. The token went on to hit a 21-month low of $15 on Alameda contagion fears.
At press time, FTT was changing hands at $17.20 while MIM traded at $0.9918.
“FTT is the largest collateral asset for MIM, so FTT decline is not great news for Abracadabra,” Pseudonymous DeFi researcher @DefiIgnas tweeted.

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