MIM stablecoin plunges to $0.50—Abracadabra acts

MIM depegged to $0.50. Abracadabra raised interest rates to encourage debt repayment and reduce supply. Incentives and Curve bribes are suspended until the peg is restored.

Magic Internet Money (MIM), a stablecoin issued by Abracadabra, sharply depegged from its $1 target, trading as low as $0.43 before stabilizing near $0.50. This left MIM about 50% below its intended value, with thin liquidity and a market capitalization of roughly $27.8 million based on 56 million circulating tokens. In response, Abracadabra launched emergency measures, including gradually raising interest rates across all lending markets (Cauldrons), even in deprecated ones. This approach aims to make debt more expensive, encouraging borrowers to repay loans and thus reduce the circulating supply of MIM. Borrowers are incentivized to buy discounted MIM and use it to repay debt at face value, accelerating supply contraction. Direct incentives and Curve bribes have been suspended until the peg is restored. Previous efforts, such as a $100,000 liquidity injection, failed to prevent the depeg. The team is evaluating further recovery plans and will provide updates as available.