Abracadabra Cracks Down on MIM Depeg with Emergency Rate Hikes

Abracadabra, an omnichain DeFi lending platform, has taken emergency action to address the depegging of its stablecoin, Magic Internet Money (MIM).

The MIM stablecoin fell 50% below its $1 peg on Wednesday, prompting Abracadabra to increase interest rates across all Cauldrons to encourage debt repayment and reduce the outstanding MIM supply.

MIM's troubles began in mid-June when it slipped to 74 cents before a brief recovery to 89 cents. It then plunged to 49 cents on Wednesday.

Abracadabra believes that by increasing interest rates, they can create a natural incentive for borrowers to repay debt at a discount, accelerating supply contraction and strengthening the path back to the peg.