Spell tokens are one of the three main tokens of Abracadabra money. It serves as the protocol’s token used for incentivization.
Abracadabra money is a lending platform that uses interest-bearing tokens (ibTKNs) as collateral to borrow a USD pegged stablecoin (Magic Internet Money – MIM), that can be used as any other traditional stablecoin.
Abracadabra uses the Kashi Lending Technology pioneered by SushiSwap (SUSHI) to provide isolated lending markets that allow users to adjust their risk tolerance according to the collateral they decide to use.
Lending from Abracadabra is fairly easy and requires as few steps as possible. First, users deposit their collaterals, then a debt allocation, with interest, is assigned to the borrower. MIM tokens are deposited into the borrower’s wallets and finally, users take their MIM wherever they like.
For users with a change of mind, the reversal process is also easy. To regain one’s collateral, users will need to repay their debt plus their interest incurred to be allowed to withdraw their collateral.
The main function of the SPELL token is to stake it in Abracadabra to obtain sSPELL tokens, which have several benefits. First, they grant holders voting rights to change the platform parameters, such as TVL, Liquidation Fees, and future collateral options, and also grant holders a claim on fees generated by the protocol.
Abracadabra money also has a unique stablecoin called MIM. MIM is a USD pegged stable coin. As with most stablecoins, it will be traded on markets with other stablecoins such as USDT, DAI, and USDC. The Magic Internet Money (MIM) token is a USD pegged stable coin that is backed by ibTKNs. MIM tokens are minted by the multisig holders on Ethereum, and only after being collateralized are they injected into the circulation. In the future, they may be bridged to other blockchains.
The amount of MIM token owned depends on two factors for each collateral user decides to deposit. One is the Loan-to-Value ratio (LTV), and the other is the initial maximum MIM allocation to that collateral.
Each Lending Market on Abracadabra money has a dedicated smart contract. These smart contracts are called cauldrons and allow users to open loans, borrow MIMs, leverage, and repay. These cauldrons are built either on top of BentoBox or on Degenbox.
Who are the founders of Spell token (SPELL)?
Abracadabra is not an official decentralized autonomous organization (DAO) but is instead governed through a Snapshot page. It is governed through a 6/10 multi-signature contract composed of the following partially pseudonymous users:
Poolpi – yearn.finance (YFI)
Leo Cheng – Cream Finance (CREAM)
Michael – Curve DAO Token (CRV)
Julien – Stake DAO (SDT)
C2tp – Convex Finance (CVX)
Sifu – Wonderland (TIME)
Georgiy – Abracadabra and Popsicle Finance (ICE)
0xmerlin – Abracadabra
Danielesesta – Abracadabra, TIME and ICE
Squirrel – Abracadabra and ICE
What is Spell token (SPELL) Used For?
Abracadabra money allows users to deposit collateral and borrow MIM against it.
On Abracadabra money, users can also open leveraged farming positions using borrowed MIM from their interest-bearing collateral.
Abracadabra also offers yield farming opportunities, where users can stake their liquidity provider (LP) tokens to farm SPELL; they also facilitate better liquidity for certain cryptocurrency pairs, currently Ether (ETH)-Spell Token (SPELL) and Magic Internet Money (MIM)-LP 3pool Curve (3CRV).
Users can stake their spell tokens for some time for more SPELL tokens. SPELL is staked for sSPELL which is used for voting and fee-sharing.
What is the Unique Point of Spell token (SPELL)?
For liquidity providers, the spell token has multiple vaults allowing users to choose from many. These vaults include:
yvWETH — WETH v2 Yearn Vault
yvUSDC — USDC v2 Yearn Vault
yvYFI — YFI v2 Yearn Vault
yvUSDT — USDT v2 Yearn Vault
xSUSHI — Staked SUSHI
Users can use these assets as collateral to mint Magic Internet Money (MIM).
Also, because MIM is backed by ibTKNs, the users’ collateral value is always increasing.
As regards protocol and transaction fees, the protocol fees, at launch, derive solely from interest on borrowed MIM. As debt is paid in MIM, fees are collected. They are distributed as follows:
75% are used to purchase SPELL tokens that go to sSPELL token holders.
20% is allocated to the government treasury that will be used to incentive MIM liquidity pools.
5% is redirected to a multisig treasury that will be used when market conditions require intervention.
Concerning debt or if your position is liquidatable, a third party can choose to pay off your debt in exchange for your collateral plus a liquidation fee. If there happens to be any collateral left, users can withdraw it.
How many Spell (SPELL) coins are in circulation?
SPELL is the Abracadabra magic token with a maximum supply of 210 billion. It is currently live on Ethereum, and SPELL contract is: 0x090185f2135308BaD17527004364eBcC2D37e5F6.
The distribution of the SPELL tokens is as follows:
7% — IDO
18% — SushiSwap ETH-SPELL LP tokens
45% — MIM-3LP3CRV LP tokens
30% — Team allocation
How secured is the Spell Network?
Abracadabra uses smart contracts and thus like with any other DeFi project there are chances of smart contract bugs and exploits.
Abracadabra money has partnered with Immunefi, a leader in the industry for white hats compensations and bug discoveries, to host on their website a bug bounty program.
Any user who has found a vulnerability or bug in the code, and wants to get rewarded for that, can submit a report directly through Immunefi’s website and will be compensated accordingly to the Threat Level and Importance of the discovery.
How do I buy Spell token (SPELL)?
The SPELL token can be used for a wide range of uses like staking and governance.
SPELL tokens can be easily purchased by the following steps.
* Open an account with the crypto trading platform.
* Transfer the specific amount of your fiat currency to your account.
* Wait for your deposit to be confirmed and buy SPELL through your trading account.
Which Cryptocurrency Wallet Supports Spell token (SPELL)?
The PTPWallet platform supports many cryptocurrencies simultaneously, such as Spell (SPELL). Because of its vast use case, it has grown to become one of the most used platforms, as it serves as an exchange and an engine to discover other cryptocurrencies. Users can easily use PTPWallet as their SPELL wallet because it offers a simple interactive interface, making it easy for people to navigate its system.