Spell Token

A user chooses the interest-bearing asset of Yearn yvWETH (the voucher that users get by depositing ETH in Yearn, which will change back more ETH in redemption with the increase of fund pool income, so it is called the interest-bearing asset of ETH), Then yvWETH deposited in Abracadabra and lent out MIM. Then MIM was sold and changed into ETH, and ETH was deposited in Yearn and the interest-bearing asset yvWETH was obtained. Continue to deposit yvWETH in Abracadabra to obtain a new MIM loan amount and lend out MIM, and then repeat the above cycle (this set of actions is called a LOOP). The above actions are completed in one block through the lightning loan operation, which can save a lot of Gas costs and improve the use experience.

MIM is similar to DAI in terms of stability mechanism, mainly from excess mortgage and seigniorage rate (similar to the stability fee of DAI). Excess mortgage ensures that there is sufficient asset support behind MIM, and seigniorage is used to control the cost of capital of MIM. Thus affecting the money supply and demand balance of MIM.

Unlike DAI, Abracadabra does not have a stablecoin deposit module (DSR). In addition, MIM will charge a one-time 0.5% seigniorage when minting coins. Assuming that users return MIM after borrowing for a month, this 0.5% seigniorage is equivalent to an additional 6% annualized interest on borrowed coins.

In the case of no special stabilization mechanism, the stability of MIM largely depends on the consensus of users. There will be users to buy debt and sell coins for arbitrage.

Abracadabra provides additional subsidies for LP in Curve (Arbitrum) market making, although MIM does not have much innovation in stable currency mechanism, but its investment in the depth of exchange can be said to spare no effort.