Abracadabra triggers emergency rate hikes as MIM stablecoin depegs

The protocol’s strategy focuses on making existing debt prohibitively expensive. By raising interest rates on both active and deprecated Cauldron markets, Abracadabra aims to incentivize borrowers to purchase discounted MIM on the open market and use it to settle their obligations. This process effectively burns the repaid tokens, reducing the circulating supply to stabilize the price.

To further conserve resources, the team has halted all Curve bribes and liquidity incentives, signaling a pivot from growth to survival. This contractionary policy follows an earlier attempt to bolster liquidity in mid-June, when the protocol injected $100,000 into a new Curve pool—a move that failed to curb the downward pressure. The current instability coincides with a broader market downturn that saw Bitcoin dip below $60,000, triggering widespread liquidations across the DeFi landscape. While the protocol works to restore its peg, market observers are monitoring whether these higher borrowing costs can successfully trigger enough repayments to reverse the current price slide.