This FTT-Backed Stablecoin Loses Its Stability To $1!

As you know cryptocurrency Many companies in the industry are interconnected. We see that many projects are linked to each other due to borrowing, lending and various collaborations.

Although these ties reinforce the unity of the sector, they can cause the effects of emerging problems to grow.

In the event of the bankruptcy of one of the companies exposed to each other, other projects may be affected by the domino effect. The bankruptcy of LUNA and 3AC highlighted the extent of this impact.

Now Alameda and FTX are next. We have seen a significant exit from the stock market and FTX-related cryptocurrencies as investors price the risk of FTX going bankrupt.

Magic Internet Money (MIM) Loses Its Stability To $1!

During these exits, the stablecoin Magic Internet Money (MIM), issued by Abracadabra Money, lost its peg to $1.

During the morning drop, MIM’s price also dropped to $0.96. Although it is currently up to $0.98, it continues to trade at $0.96 on some exchanges.

FTT exposure may be among the reasons why MIM has lost its fixation to $1.

MIM is a decentralized project that allows issuing one dollar pegged MIM coin in the form of a loan with high collateral and its current market cap is $153 million.

According to Abracadabra data, MIM is supported by many different cryptocurrencies and one of them is FTT.

The amount of MIM printed with FTT collateral is approximately $28 million, which means that 18% of MIM is backed by FTT.

In return for this MIM loan, Alameda holds a $126 million FTT in Abracadabra. While this loan is far from liquidation for now, the atmosphere of fear caused other investors to react and MIM has lost its fix at $1 for now.

Concerns about the liquidity of FTT suggest that there may be problems during the liquidation of this loan. It is estimated that this is one of the reasons why MIM owners panic.