Thread by @Hunter0xHunter

1/ DeFi farming on L2 has exploded with yet another "Magical" protocol to the block: abracadabra.money 🧙🏼‍♂️

Crafted by the well-vetted wizard team:
@0xM3rlin, @danielesesta, @bantg, @0xWicked

Could the synthesis of fantasy and finance be an attractive play?

🪡

2/ What is Abracadabra.money?

abracadabra.money is a lending and borrowing platform that utilizes stagnant ibTKNs (Interest-bearing tokens) sitting in DeFi wallets to be used as collateral to borrow $MIM (Magic Internet Money) a USD pegged stablecoin

3/ $MIM are minted using the Kashi Lending protocol built on @SushiSwap

ibTKS can include:
$yvWETH, $yvYFI, $yvUSDT, $cvx3pool, $FTM

YTD, $MIM has a generated ~$870M TVL spread across ETH Mainnet & Arbitrum

4/ Borrowing should feel familiar to Web 3.0 enthusiasts
1. Deposit ibTKNs used as collateral
2. MIM issued based on the collateral type and LTV preferred
3. Use MIM [swap it, transact, stake]
4. Return MIM borrowed + interest by selected loan date

sound familiar?

5/ Aside from $MIM, Abracadabra uses its native governance token $SPELL which can be staked to obtain $sSPELL

$sSPELL promises the community and investors two things:
- Voting rights
- Dividend on fees generated via the protocol

6/ The main attraction to this project is the catalytic decisions made by the developers...

They came in the form of a token burn🔥 and Arbitrum airdrop 🪂

7/ Initial issuance of $SPELL was capped at 420B SPELL...
However... on May 30, @0xM3rlin announced the burning of 1/2 the allocated circulating supply to 210B SPELL.
Proof: etherscan.io/tx/0x01bdb6c4b…

8/ On Sep 15, the announcement was made by @danielesesta that an airdrop will be made to those who were eager to bridge onto L2 and deposit $ETH in the first single-sided abracadabra.money "cauldron" using @Arbitrum.
Oh boy, was the DeFi community excited...

9/ In less than 24 hours, TVL skyrocketed to $100M, eventually topping out at $137M leading the charts in terms of TVL across all dApps currently built on @Arbitrum.
The airdrop rewards were successfully distributed with $1.3M in $SPELL sent to stakers

10/ This launch was then followed by the release of @sushiswap pairs on the Arbitrum network:
- SPELL/WETH
- WETH/MIM

L2 support provided seamless integration to supply liquidity + exceptionally low gas fees was the a winning combination

See charts below 👇

11/ Why this is important...

I predict that attracting liquidity through this pipeline is going to be the standard method for protocols advancing into the realm of L2s.
Community growth is the primary pillar in the blockchain space.
No community = Project D.O.A.

12/ Economic output ensures trust in developers. Crossing milestones like this with such a new project is going to be critical adopting new devoted users before the ultimate stress test of any DeFi application: The Bear Market🐻

13/ Compounding successful executions promise the community further development. This is going to be the primary driving factor that could lead #MIM to challenge the market share of other USD pegged stablecoin projects
- $USDN, $TUSD, $DAI, $UST

14/ Replicating this pipeline of liquidity attraction to other ibTKS tokens on abracadabra's Arbitrum layer could potentially catapult $MIM above a $1B market cap.

This may cannibalize its L1 TVL, yet this is expected for any protocol making the L2 leap.

15/ If growth and adoption in DeFi continue at this pace, abracadabra.money could be well-positioned as one of the largest interoperable protocols using ibTKNs as DeFi collateral.

16/ Additional growth on other L1 chains such as $AVAX, $FTM, or $BSC could yield far higher returns on $SPELL holders prohibited the stance of current issuance remains unchanged.

17/ Is abracadabra.money worth investing in?

I'll resurface my thoughts on output.
If a project can continually satisfy its community and award its users through the vehicle of Web 3.0, then I believe the legs on abracadabra could run quite far.