Magic Internet Money (MIM), the crypto-collateralized, dollar-pegged stablecoin issued by decentralized finance platform Abracadabra, suffered a severe depegging on June 24 after a wave of selling pushed its price down to about $0.50.
The drop erased more than a third of the token’s value within hours and led Abracadabra to implement emergency measures as concerns grew over the stablecoin’s stability. Blockchain security firm PeckShieldAlert posted on X, showing that MIM had been trading between $0.85 and $0.88 in the days leading up to the decline, before selling pressure intensified.
The decline accelerated rapidly after the token’s price slumped from $0.75 to under $0.60. Trading volumes spiked by over 2,500% as users scrambled to arbitrage, sell, or exit their debt positions.
Emergency measures to halt the depeg
Abracadabra responded to the depegging event by announcing a series of measures aimed at reducing the supply of MIM and supporting its return toward the $1 peg.
The protocol said it would gradually raise interest rates across all Cauldrons, including older markets, to encourage borrowers to repay loans. Lower borrowing activity and debt repayments would reduce the amount of MIM in circulation.
Abracadabra also temporarily halted direct incentives and Curve bribe programs. The team said MIM’s discounted price gives borrowers an incentive to buy the stablecoin on the open market and use it to repay debt at a lower cost.
MIM relies on collateral backing, borrower demand, and liquidity in trading pools to maintain its peg. When liquidity becomes strained or selling pressure increases, the stablecoin can move away from its target price. Earlier this month, Abracadabra added $100,000 worth of MIM, USDT, and USDC to a new Curve pool, though the latest sell-off put renewed pressure on the token’s stability.
A broader market stress test
The MIM collapse did not happen in a vacuum. It occurred during a sharp, broader downturn in the digital asset market.Bitcoin tested the $60,000 support level, while cross-market crypto liquidations topped $994 million, drying up liquidity across decentralized exchanges.
Abracadabra itself is no stranger to operational stress. The protocol has weathered multiple severe security incidents, including a $6.5 million hack in January 2024 and subsequent logic-flaw exploits throughout 2025, keeping intense scrutiny on the platform’s risk-management architecture.
Despite the panic, some market participants viewed the depeg as an arbitrage opportunity. Traders on X noted purchasing discounted MIM, betting that the protocol’s emergency rate hikes will successfully force a supply contraction and eventually restore the $1 peg.
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