In this article , we aim to discuss about how MIM has performed at holding/gaining its peg in the last few weeks. Is MIM depegging correlated with other stablecoins like UST?
The Abracadabra Money platform allows users to borrow the USD-pegged stablecoin MIM (Magic Internet Money), which has the same functionality as other stablecoins. The Abracadabra Money platform utilizes interest-bearing tokens (ibTKNs), such as yvUSDC, yvUSDT, xSUSHI,… as collateral. Unlike other forms of investment, Abracadabra Money allows users to leverage their money to the next investment stage by leveraging interest-bearing tokens. Prior to this, those tokens are left idle. Abracadabra Money opens the door to numerous other models and ways of investing.
As an Abracadabra Money token, MIM (Magic Internet Money) is the central component to sustain its lending model. In the same way that MakerDAO and Terra are stablecoins, we know that MIM is a decentralized stablecoin. That means , abracadabra.money offers a way to deposit Interest-Bearing Assets, which can then be used as collateral for loans of the stable coin MIM.
We can see the performance of holding/regaining its peg in the below graph during the past few weeks. On November 21, 2021, a maximum MIM average of $1.01 was observed. On January 28, 2022, a minimum MIM average of $0.99 was observed. November 30, 2021 saw the maximum MIM max of $1.02 and January 28, 2022 saw the minimum MIM max of $0.99.
The maximum MIM Min of $1 was observed on November 21, 2021, and the minimum MIM Min of $0.97 was observed on December 4, 2021, and also on January 27, 2022. In this case, we can see that the MIM token minimum price was re-fixed twice in the last few weeks. Looking at the minimum price, we can see two pegs in the MIM token price.
On November 21, 2021, a maximum MIM average of $1.01 was observed. On January 28, 2022, a minimum MIM average of $0.99 was observed. November 15, 2021 recorded the maximum UST Avg of $1.01 and December 14, 2021 recorded the minimum UST Avg of $0.97. MIM’s depegging can be seen correlated to the price of other stablecoins if we compare it to the peg of UST.
As you can see in the below graph, the LUNA price is compared with MIM Average values. This correlation may be due to the LUNA price fluctuation in the market. That is why we can see a dramatic change in the MIM average on January 28,2022.LUNA’s market price has fallen from the $80s to $40s in this time period.
From the above analysis, we can see that MIM’s depegging is highly correlated with the price of UST stablecoins as well as the market fluctuations of a specific token value.