Decentralized finance technology has been welcomed by all cryptocurrency enthusiasts, particularly those who consider themselves to be purists. As much as we would like blockchain networks to be wholly efficient from the start, the reality of the cryptocurrency world is that there is a clear need to expand, scale, and bifurcate in order to meet transaction demand. The original Bitcoin whitepaper was clearly in favor of decentralization from a governance point of view, but now we need DeFi in order to support exiting blockchains, protocols, and tokens.
Abracadabra, a DeFi startup that focuses on the development of stablecoin solutions, has been drawing interest from smart cryptocurrency investors through its SPELL and Magic Internet Money stablecoins. What is interesting about SPELL and MiM is that their respective protocols show a great potential to achieve the necessary price and asset value stability without having to be tied down to a centralized process. This has been a point of contention with prominent stablecoins such as Tether and USDC, which require close management and intervention from a business team.
MiM and SPELL are going through expansion stages; they have yet to reach the point of being equal to $1, but they seem to be on track to do so in the near future. The SPELL protocol leverages the Dai stablecoin technology, which has been hailed as the most efficient way of creating a digital form of physical money that does not possess volatility problems. This has been achieved through an algorithmic approach that is able to convert stablecoins to currencies and vice versa. In effect, users can access a stable currency which has a one-to-one correlation with US dollars, euros, and yuan. With regard to MiM, it leverages the IOTA blockchain protocol. This is a distributed ledger technology that allows users to create assets and cryptocurrencies such as SPELL, BitUSD, and MiM themselves.
The launch of MiM was a bit of a challenge. It’s still not easy for companies to launch and operate a currency on the IOTA blockchain, which is in need of improving overall. Nevertheless, it was well received by the financial community as one of the most decentralized stablecoins that can be used on the Tangle, which is part of the IOTA protocol.