It seems that the situation for cryptocurrencies, especially for the stablecoins in the crypto-verse has been worsening day by day. The depegging that took place for TerraUSD (UST) has initiated a domino effect. This means that more stablecoins have started coming under pressure and are facing the same depegging.
Although the depegging may seem normal its impact on the overall reputation of the cryptocurrency universe is very damaging. Due to the constant crashes and downfalls in the crypto-verse, many investors are losing their trust and confidence in cryptocurrencies.
People now fear for their investments and holdings in cryptocurrencies. Therefore, they have resorted to leaving the cryptocurrency markets and the impact on the crypto-verse has been tremendous.
Just when it was thought that the depegging was over after UST, another stablecoin ended up facing a depegging.
Magic Internet Money (MIM) Faces a Depegging
This time, you will be looking at Magic Internet Money (MIM) that is in the news. MIM has been launched by and is used within the Abracadabra ecosystem. Just like USDT and UST, MIM is also USD-pegged.
The reports suggest that MIM has been the victim of the untimely winter that has come in the way of the crypto-verse. As a result of the constant downfall, MIM has been pulled lower from its $1 value.
A look at the data for MIM suggests that on June 17, MIM started to experience depegging. Due to the crash, the trading value of MIM went down to $0.926. The analysis shows that the price of MIM went to such a figure in a matter of three hours.
MIM Had the Same Impact as UST
Due to the issue with the Terra network, its utility token Terra (LUNA) and TerraUSD (UST) ended up facing a huge plunge. The impact of the Terra network was felt throughout the cryptocurrency network. Many cryptocurrency projects crashed due to the dip in UST.
Even Abracadabra had ended up facing a negative impact due to the Terra network downfall. According to sources, Abracadabra had ended up accumulating $12 million as bad debt.
It was because of the bad debts the trading price of MIM continued plunging. This is the reason why the trading price of MIM has started plunging and it may continue dipping if the debt is not clear.
Abracadabra’s Founder Defends the Protocol
While the investors, analysts, and stakeholders of MIM are leaning towards the negative side, Daniele Sestagalli has tried defusing the situation.
As per Sestagalli, their protocol has no shortage of friends. Even their treasury has more funds than what they are claimed to owe in bad debt.
Despite the claims of Sestagalli, the overall factors are not in favor of MIM or other cryptocurrencies. Going forward, the price of MIM and other cryptocurrencies may plunge in near future.