What is Spell Token (SPELL)?

SPELL serves as an ERC-20 token functioning as a governance and incentive mechanism within the Abracadabra.money ecosystem. Its main purposes include governing the Abracadabra protocol and accumulating fees generated by the protocol. 

Abracadabra utilizes interest-bearing tokens such as CRV, CVX, and YFI as collateral to create Magic Internet Money (MIM), a stablecoin pegged to the USD. With a maximum supply of 210,000,000,000 tokens, SPELL is distributed for worldwide farming incentives, team allocation, and during the initial DEX offering.

SPELL, the Spell Token, functions as a reward mechanism linked to abracadabra.money, a lending platform utilizing interest-bearing tokens (ibTKNs) as collateral to secure loans in a USD-pegged stablecoin named Magic Internet Money (MIM). 

The platform adopts the Kashi Lending Technology from SushiSwap (SUSHI) to create distinct lending markets, enabling users to tailor their risk exposure based on the collateral they employ. Users have the option to deposit collateral and borrow MIM against it. 

Additionally, Abracadabra presents yield farming opportunities where users can stake their liquidity provider (LP) tokens to earn SPELL tokens. This incentivizes liquidity for specific cryptocurrency pairs, such as Ether (ETH)-Spell Token (SPELL) and Magic Internet Money (MIM)-LP 3pool Curve (3CRV). Moreover, users can initiate leveraged farming positions using borrowed MIM sourced from their interest-bearing collateral.

Who are the founders of Spell Token?

Abracadabra operates as a decentralized autonomous organization (DAO) unofficially and is governed through a Snapshot page. MIM tokens are minted via a 6/10 multi-signature contract involving the following partly pseudonymous individuals:

How does SPELL Token operated?

SPELL is a reward token established and utilized by the decentralized lending platform Abracadabra.Money. This platform employs interest-bearing tokens known as ibTKNs (including CRV, YFI, CVX) as collateral to borrow another token named Magic Internet Money (MIM), which is a stablecoin pegged to the US dollar. In essence, it operates similarly to DAI.

Yet, users contributing to the project through various opportunities like yield farming, staking liquidity, and similar activities receive SPELL token rewards. With SPELL, they gain access to the project's governance or can opt to accumulate wealth steadily by holding and receiving passive income.

It's essential to note that Abracadabra utilizes the Kashi Lending Technology, developed by SushiSwap, enabling several DeFi lending innovations. This technology segregates the lending market, containing risks within specific pairs. For instance, if liquidity depletes for a particular pair, only that pair is affected while the rest continue functioning without disruption.

What sets Spell Token apart?

The uniqueness of Spell Token stems from SushiSwap's Kashi Lending Technology, which has spurred innovative isolated lending markets within Abracadabra, a decentralized finance (DeFi) platform. In these isolated markets, risk isn't pooled collectively. 

Liquidity provision for any token is possible, and if a currency pair loses liquidity or experiences issues within the smart contract, only that specific pair is affected, safeguarding the entire platform. This flexibility enables Abracadabra to offer diverse pairs not commonly supported by other decentralized exchanges (DEXs).

An integral aspect of this technology allows users to maximize their interest-bearing token holdings. Users can borrow against their positions and subsequently leverage the borrowed stablecoin, creating multiple loops that amplify their leverage. All these actions are consolidated into a single transaction, minimizing gas fees for users.

Additionally, Spell Token (SPELL) can be acquired through liquidity provision in various pools. Users also have the option to stake SPELL tokens, which entitles them to a portion of platform fees (such as interest, borrowing fees, and 10% of the liquidation fee for specific markets), and these earnings auto-compound over time.

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