Magic Internet Money (MIM) is a decentralized, collateral-backed stablecoin soft-pegged to the U.S. Dollar. It operates as the core product of the Abracadabra.money decentralized finance (DeFi) lending platform. MIM is designed to allow users to unlock liquidity from their interest-bearing crypto assets without needing to sell them, and it is distinguished by its native multi-chain functionality. ^[1]

History

The Abracadabra.money platform and its stablecoin, MIM, were co-founded by Daniele Sestagalli, a prominent figure in the DeFi space, and an individual known as "Squirrel." ^[1] During its operation, the protocol has faced public concerns regarding the stability and potential manipulation of MIM, which led to community discussions about its underlying collateral and associated risks. ^[1]​

Overview

​Magic Internet Money is generated through a Collateralized Debt Position (CDP) model when users borrow against their crypto holdings on the Abracadabra.money platform. A key innovation of the protocol is its acceptance of interest-bearing tokens (ibTKNs) as collateral, which are deposited into lending vaults known as "Cauldrons." This mechanism allows a user's deposited capital to continue generating yield while it is simultaneously being used to secure a MIM loan. The process is intended to enhance capital efficiency for users engaging in advanced DeFi strategies like "leverage yielding," where users can automate the process of repeatedly borrowing MIM against their collateral to increase the size of their position and maximize yield. ^{[4] [1]}​

The MIM stablecoin is not confined to a single blockchain. Through a technology called "Beaming," which utilizes the LayerZero protocol, MIM can be transferred natively across multiple blockchain networks, including Ethereum, Arbitrum, Avalanche, and Fantom, creating a more fluid and interoperable asset. ^{[4] [3] [1]}​

Ecosystem and Governance

The Abracadabra ecosystem is composed of its stablecoin (MIM), a governance token (SPELL), and a decentralized autonomous organization (DAO) that oversees the protocol. As of late 2025, the protocol reported over $145 million in total value locked (TVL). ^[4] Protocol revenue is generated from interest on borrowed MIM, one-time borrowing fees, and liquidation fees. ^[1]​

Associated Tokens

• Magic Internet Money (MIM): The core product of the platform, a USD-pegged stablecoin used for borrowing, liquidity, and payments across multiple blockchains. Self-reported data from its CoinMarketCap profile indicated a circulating supply of approximately 103.82 million MIM, a total supply of 698.96 million MIM, and over 417,600 holders, though these figures are subject to change. ^[1]
• Spell Token (SPELL): The utility and governance token of the Abracadabra.money platform. SPELL token holders can participate in governance decisions and stake their tokens to receive a portion of the protocol's fee revenue. The project's team has actively managed its supply, executing a burn of 5.25 billion SPELL on January 3, 2022, to reduce the total supply to 196 billion. ^{[2] [4]}

Use Cases

• Unlocking Liquidity: The primary use case is allowing holders of yield-generating assets to gain access to liquid capital (in the form of MIM) without having to sell their underlying positions.
• Leveraged Trading and Farming: Users employ MIM to increase their exposure to certain crypto assets and amplify their returns from yield farming strategies.
• Staking: Users can stake MIM in certain ecosystem pools to earn yield. The protocol's governance token, SPELL, can also be staked to receive a share of platform fees. ^{[4] [1]}
• Liquidity Provision: MIM is a common asset in liquidity pools on various decentralized exchanges (DEXs), where liquidity providers can earn trading fees from swaps involving the stablecoin.
• Payments: As a stablecoin, MIM can be utilized for on-chain or cross-border payments with lower volatility risk compared to other cryptocurrencies and with greater efficiency than traditional financial systems.
• Interoperability: The "Beaming" feature positions MIM as a tool for transferring value seamlessly across different blockchain ecosystems, enhancing capital flow and market integration. ^[1]

Future Developments

The integration of MIM as an Omnichain Fungible Token is presented by the project as a foundational step toward more advanced cross-chain DeFi functionalities. The underlying LayerZero technology is intended to unlock future capabilities that could further enhance capital efficiency across the entire blockchain ecosystem. Stated goals for future development include:

• Cross-Chain Borrowing: Enabling users to open a borrowing position on one blockchain (e.g., borrowing MIM on Arbitrum) by using collateral held on a completely different blockchain (e.g., a yield-bearing asset on Ethereum).
• Cross-Chain Liquidations: Developing a mechanism to seamlessly execute liquidations of debt positions across different networks, which would create a more unified and resilient risk management system for the protocol.^{[3] [2]}