SPELL is een Ethereum-token dat Abracadabra.money aanstuurt, een platform dat gebruikers onderpand laat storten in de vorm van rentedragende crypto-activa (zoals yvYFI, yvUSDT, yvUSDC, xSUSHI) om MIM te minten, een stablecoin die een waarde van US $ 1,00 probeert te behouden. SPELL kan worden gestaakt om sSPELL te verdienen, wat governancesrechten en andere beloningen oplevert.
What Is SPELL Token (SPELL)?
Spell Token (SPELL) is a governance token of Abracadabra.money, a lending platform. A lending platform is simply a DeFi where traders lend and accept cryptocurrencies in exchange for interest. The Abracadabra.money platform uses an interest-bearing token as the collateral for lending. These are tokens of other protocols used as collateral to borrow stablecoin of the platform, the MIM or Magic Internet Money. Essentially, the platform lets users borrow a stablecoin to swap for other stablecoins. The platform aims to optimize a user's portfolio who seeks to earn passively from cash flow generating assets.
Meanwhile, the collaterals that the user deposits in the platform are yield-bearing tokens where the value of the token increases over time after the user makes an initial deposit. Thereby, the user earns more than what was deposited as the underlying assets' value increases. The platform uses these yield-bearing tokens from Yearn Finance (Yearn Vault) and Sushiswap platforms. Once the user deposits the collaterals in Abracadabra.money, the user receives stablecoin that the platform allots, called MIM or Magic Internet Money. Afterward, the user can exchange this MIM for other stablecoins that accept this denomination. Thus, users receive the MIM stablecoin by depositing collateral in the platform to exchange for another stablecoin.
For instance, assume a trader X who owns stablecoins worth $100,000 decides to deposit in an interest-bearing token like the Yearn Vault. Now, X holds the yv-version of the stablecoin that earns him interest. Later, X wishes to use this fund to purchase a car. This step is where Abracadabra.money comes into the picture. X deposits this fund to the platform and receives MIM, which is then used to pay for the car as, X can swap it to other stablecoins. Notably, the yield-bearing collateral is still increasing in value.
Further, when the user wishes to receive the collateral back, an equal amount of MIM and a percentage of interest is returned to unlock the tokens. As an interest-bearing token backs every MIM, the value of the underlying token determines the value of MIM, which the platform displays in a dashboard. To avoid the risk of liquidation of these collaterals, the team chooses interest-bearing tokens with a track record of improving value at a considerably better level than the interest rate on MIM debt. Simply because MIM has an interest, if the value of collateral does not improve for whatever reason, liquidations may occur.
Moreover, the Kashi lending technology provides this isolated lending market facility. Contrary to traditional lending markets, an isolated market does not share the risk collectively. Therefore, a token pair's risk face does not impact the whole platform. As a result, Abracadabra.money users adjust their risk tolerance based on the collateral they choose to utilize.
Further, the platform's token, SPELL, is an ERC20 token used for staking and incentivization. This token generates sSPELL, another platform token for governance and fee-sharing. Thus, the platform has three tokens; MIM, SPELL, and sSPELL.
Apart from the stablecoin MIM, the platform has two other tokens, the SPELL and sSPELL. The primary function that the SPELL token offers is staking in the Abracadabra.money platform. Firstly, SPELL tokens are purchased using the protocol fees collected from the interest on MIM debt repayment. Out of the total protocol fees, 75% is used for SPELL token purchase, which goes to the sSPELL token holders.
The sSPELL token is a secondary token that users receive by staking the SPELL tokens, granting voting rights. Using voting rights, holders can make important decisions, such as future collateral liquidation fees, and implement several other parameters in the platform.
How Many SPELL Tokens Are Available?
The total supply of SPELL tokens was reduced to 210 billion SPELL from 420 billion SPELL through token burning. Coin burning reduces the total supply, as it removes the coins from circulation. The maximum supply of SPELL is 210 billion.
How to Buy SPELL Tokens
SPELL tokens can be purchased and traded using exchanges such as Coinbase.
