Everything You Need To Know About Spell Token
Ever thought of a way to borrow tokens and earn interest on collateral simultaneously? That’s like taking a bank loan but getting paid interest every month instead. How cool is that? Look no further, it’s as easy as saying “Abracadabra!”.
Abracadabra Money is a lending platform itself (like lending institutions or banks) that lends out a stable coin pegged to the US Dollar: MIM, which stands for Magic Internet Money. To borrow this stable coin from them, a potential borrower will have to deposit interest-bearing tokens (ibTKNs) as collateral.
Governance tokens are non-mineable units of value whose major purpose for issuing is decentralization. A selling point of cryptocurrencies is decentralization, I.e. a minimal or no level of control by a single institution or individual; one of such is Spell token.
What Is Abracadabra?
Capital inefficiency, being one of the major problems that existed in its predecessor, has been solved in the more recent DeFi 2.0.
How you may ask? Through the use of a landing protocol, which makes use of interest-bearing tokens such as yvUSDC, yvETH and xSUSHI as collateral to borrow Magic Internet Money (MIM). MIM is a stable coin that imitates the stability of the US dollar. SPELL is the governance token for the Abracadabra economy. It is a new way to earn passively with little to zero risk.
Spell Token (SPELL)
The Abracadabra economy has two major tokens which run it.
- SPELL, which is the governance token of the economy;
- MIM (Magic Internet Money).
https://twitter.com/17thLetter3/status/1481348701029289988?s=20
The Spell token can be staked to gain two major benefits, which are:
Governance: Abracadabra being a decentralized protocol system, the more Spell Tokens one has will determine how powerful one’s opinions are in changing the economy such as liquidation charges/fees, collateral and total value locked (TVL).
Passive Income: because of staking, users get a percentage of trading fees from the platform. These fees are generated from interest earned from users borrowing MIM. The sharing formula is quite simple; 75% to the token holders, 20% to the main governance treasury and 5% to the multisig treasury that reduces risks when the market conditions dwindle.
What’s New About The Token?
Spell and MIM, a utility token, are the tokens of the Abracadabra Money Ecosystem, a Decentralized Application on the Ethereum blockchain. An innovation of this DApp is its use of interest-bearing tokens (ibTKNs) like xSUSHI.
https://twitter.com/Cryp7oBadger/status/1479269763272646660?s=20
These tokens are like receipts or bond certificates for staking. The genius of Abracadabra money is that these ‘bond certificates’ can be used as collateral to loan MIM, which can be converted into USDT. This offers the opportunity to leverage with minimum risks and exponential leveraging. This is because the USDT, which was obtained from MIM, can be re-staked.
Where Does The Spell Token Fit Into All Of This?
The spell token offers a chance to be part of the revolutionary Abracadabra money, as the other token is a stable coin.
Spell Tokenomics
- Contract: ERC-20 blockchain.
- Token type: Governance token.
- Maximum supply: 420,000,000,000 SPELL
- Circulating supply: 70,631,239,342 SPELL
- Market capitalization: $1,110,928,876.23.
Conclusion
Regardless of the mystical-themed titles, Spell and its parent ecosystem seem to be out to make the best of DeFi 2.0 with their innovations and ingenuity. Centralized stable coins have recently revealed their legal drawbacks, paving the way for decentralized stable coins like SPELL and MIM to gain widespread attention and probably overtake them, eventually. Do you think this can happen in the long run?
