Magic Internet Money token depegs as Terra (LUNA) domino effect persists

Citing an insider scoop, Autism Capital claimed that Abracadabra accrued $12 million in bad debt as a direct result of Terra’s sudden downfall, which has been refuted by founder Daniele Sestagalli.

Magic Internet Money (MIM), a US dollar-pegged stablecoin of the Abracadabra ecosystem, joins the growing list of tokens losing their $1 value amid an untimely crypto winter. The sudden de-pegging of the MIM token commenced roughly on June 17, 7:40 pm ET, which saw the token’s price drop to $0.926 in just three hours.

Terra’s LUNA and TerraUSD (UST) death spiral not only affected the investors but also had a negative impact on numerous crypto projects, including Abracadabra’s MIM token ecosystem — as alleged by Twitter handle @AutismCapital.

Citing an insider scoop, AutismCapital claimed that Abracadabra accrued $12 million in bad debt as a direct result of Terra’s sudden downfall “because liquidations couldn’t happen fast enough to cover the protocol’s MIM liabilities.”

We have a scoop from one of our associate autists: MIM (Magic Internet Money) may be nearly insolvent. MIM is one of the larger stablecoins, with a market cap of ~$300M.

We can’t believe that a project called Magic Internet Money has been acting irresponsibly either.

Details:

— Autism Capital (@AutismCapital) June 17, 2022

Daniele Sestagalli, the founder of Abracadabra, however, refuted the claims of insolvency by ensuring to have enough funds to pay back the piling debts — which has been attributed to the falling MIM prices. Sestagalli stated:

“[The Abracadabra] Treasury has more money than the debt and $CRV are valuable for the protocol.”

Doubling down on his stance, Sestagalli further publicly shared the

Five days ago, on June 13, Stablecoin protocol USDD’s price dipped to $0.97 on major crypto exchanges.

1/ And it’s starting$USDD is currently just 92% collateralized by the Reserves (even considering $TRX funds) ⚠️

If you subtract $TRX, it turns out collateralization ratio is currently 73%

Also, the 140M $USDT are not really USDT, but jUSDT pic.twitter.com/fKYaIQEd1D

— Res ®️ (@resdegen) June 12, 2022

To help out during the market fluctuations, the Tron DAO Reserve announced that it received 700 million USD Coin (USDC) to defend the USDD peg. As a result of the fund infusion, the team behind the stablecoin explained that the collateralization ratio of USDD is now boosted to 300%.