...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet.
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The Magic Internet Money ($MIM) stablecoin has lost its dollar again, dipping all the way below $0.77 in a flash crash before returning to around $0.95.
The depeg appears to be related to an exploit of the Abracadabra lending protocol, which allows people to borrow $MIM. An attacker exploited an apparent flaw in the platform's smart contracts to drain around $6.5 million.
This is the second time the token has depegged, after a June 2022 incident shortly after the Terra collapse.
On June 17, $MIM began to lose its $1 peg, and on June 18 it dropped below $0.91. Later on June 18, it returned above $0.95, but continued to be priced below its intended peg.
The supply of $MIM dropped precipitously in the wake of the Terra collapse, as traders lost confidence in more broadly. Amidst plummeting markets, rumors have surfaced that Abracadabra is "nearly insolvent" due to left over from the Terra crash. Sesta has refuted the claim, writing on Twitter that the "treasury has more money than the debt" and that the rumors were simply people "spread[ing] FUD [to] try to recover your losses from shorting a bit". The project announced that it would be implementing "peg stability measures", including increasing interest rates on one of their lending markets.
