Deep Dive
1. Purpose & Value Proposition
Abracadabra.money solves a key DeFi problem: idle collateral. Traditional loans require locking up assets, but Abracadabra lets users deposit interest-bearing tokens (like stETH or yvUSDC) as collateral. This means borrowers keep earning yield while accessing liquidity via MIM, a USD-pegged stablecoin.
This creates a “double yield” opportunity: interest from the collateral + borrowed MIM that can be reinvested.
2. Technology & Risk Management
The platform uses Kashi Lending Technology, which isolates each lending market. For example, a stETH/MIM market operates independently from a yvUSDC/MIM pool. If one collateral type crashes or gets hacked, other markets remain unaffected.
This contrasts with platforms like Aave or Compound, where all collateral is pooled, increasing systemic risk.
3. Tokenomics & Governance
SPELL has two primary roles:
- Rewards: Users earn SPELL by providing liquidity to MIM trading pairs or staking LP tokens.
- Staking: Staked SPELL (sSPELL) earns a share of platform fees (0.5% of borrowing interest, liquidation penalties).
Notably, SPELL’s supply is uncapped, with emissions decreasing yearly to balance incentives and inflation.
Conclusion
Spell Token powers a DeFi lending protocol that maximizes capital efficiency by letting users borrow against productive collateral. Its isolated markets reduce risk, while SPELL incentivizes liquidity and governance participation.
