The death spiral of TerraUSD and Luna not only affected those who are investors but also had a massive negative impact on quite a few projects of crypto. This includes the Magic Internet Money token ecosystem of Abracadabra- as maintained by @AutismCapital- a Twitter handle.
Magic Internet Money- which is a US dollar-pegged stablecoin of the ecosystem of Abracadabra- recently went on to join the humongous list of tokens that lost their $1 value amidst an untimely winter in the crypto sector. The sudden de-pegging of the token started on the 17th of June, which saw a drop in the price of the token to $0.926 in just a few hours.
MIM Tokens Have Suffered As A Result Of Terra
AustismCapital also went on to claim that Abracadabra had seemingly accrued close to $12 million in bad debt which was a direct result of the sudden downfall of Terra– because the liquidations couldn’t happen swiftly enough to cover the MIM’s protocol liabilities. The founder of Abracadabra, Daniele Sestagalli, however, completely refuted these claims of insolvency. They further went on to ensure that the token had enough funds to pay back all of the piling debts- which had been attributed to the falling prices of MIM.
Sestagalli also publicly shared the treasury address that was holding a sum of $12 million in assets while asking several concerned investors to verify the same through the usage of on-chain data. On the other hand, the Twitter user alleged that the bad debt of Sestagalli had been created just five days ago- which was the result of Terra’s sudden collapse in the market.
Now, with the risk of insolvency threatening the protocol of Abracadabra, either through the MIM treasury losing its value as a result of the collapse of Terra, investors have been asked to keep a close track of most of the market fluctuations in the industry.