With DeFi booming, many projects and platforms are vying for a pie in a similar market. In this scenario, millions of interest-bearing tokens are being held idle in the market, which can be put to great use. Abracadabra.money is a lending platform that seeks utility in these idle tokens as collateral by providing users access to US dollar-pegged stablecoins. Let's discuss the SPELL token and its associated platform Abracadabra.money.
Abracadabra is a decentralized lending platform that allows users to take advantage of their interest-bearing position by borrowing against it. Users can borrow a stablecoin called Magic Internet Money (MIM) by using their interest-bearing tokens (ibTKNs), such as yvYFI, yvUSDC, yvUSDT, xSushi, etc., as collateral. The borrowed stablecoins can again be used as collateral for borrowing more stablecoins. This looped arrangement allows the platform to offer many cryptocurrency pairs that are not supported by other DEXs.
The platform uses the Kashi lending technology, first introduced by SushiSwap. This technology lets users access Abracadabraâ€™s isolated lending markets where the risk is not shared collectively. If the liquidity in one currency pair is lost, the effect doesnâ€™t permeate to other markets. SPELL is the native token of the platform, while MIM is the stablecoin used for providing loans to borrowers.
The platform also offers various farming opportunities for users to stake their LP tokens for farming SPELL tokens. Currently, farming is available on ETH-SPELL and MIM-3CRV LP tokens.
SPELL Token: Fundamental Analysis
SPELL is the native token of the Abracadabra.money platform with staking as the primary use case. For staking their SPELL tokens, users get sSPELL tokens as rewards. SPELL token holders also have voting rights and can claim interest streams generated via MIM lending by the platform.
The maximum supply of the SPELL is 196 billion, while its current circulating supply is around 84 billion tokens.
Short-Term Technical Analysis
SPELL token is trading at $0.005 today and is a part of the top 150 list by market cap. The token has corrected steeply from its 2022 high of $0.026 but has started showing signs of strength over the past month.
Source: TradingView, Binance
Its journey ahead remains cautious - after overcoming a long term trendline resistance in March, it has lost it as support this week and is now making another attempt at reclamation. Should the level be claimed, targets of $0.006 and $0.007 will be in play.
SPELL token posits high growth possibilities for the unique use case it solves, i.e., deriving value out of an idle asset. As DeFi continues to grow, the need to find better uses of the defi tokens will rise beyond their platform functionalities.
SPELL token witnessed its fair share of controversy in 2022 when the Frog Consortium, of which Abracadabra.money is a part, experienced a massive sell-off. The token saw a massive bear market in January but had regained a part of its lost glory by the end of March. To be considered a viable investment, the SPELL token needs to register further growth and momentum towards being a top 100 cryptocurrency.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.