Autism Capital has stated that Terra’s sudden crash has caused Abracadabra to accrue $12 million in bad debt. However, Abracadabra’s founder, Daniele Sestagalli, has refuted such claims.
Magic Internet Money (MIN) has also become one of the stablecoins that lost its stablecoin value pegged to $1, as the crypto market continues to slump. The unexpected de-pegging of the MIN token started on June 17 when the stablecoin dropped slightly to $0.926 within three hours.
Apart from investors, the crumbling of TerraUSD (UST) and LUNA also affected several crypto projects, including the MIN token ecosystem of Abracadabra, according to Autism Capital.
This affected Abracadabra because liquidations didn’t occur on time to cover the protocol’s MIM liabilities. But while responding to the claim, Sestagalli stated that there was no insolvency on the platform and that investors should not be bothered.
“[The Abracadabra] Treasury has more money than the debt and $CRV are valuable for the protocol,” he assured.
The support his claims, Sestagalli shared the treasury address that holds $12 million in assets, urging investors to verify the amount using on-chain data.
Investors Urged To Monitor The Market
Autism Capital alleged that Abracadabra’s bad debt came five days ago. The protocol is facing risks of insolvency either through bad debt created or via the MIM treasury that continues to shrink in value.
But investors have been urged to monitor fluctuations in the market and carry out their research before making any investment decision.
The price of stablecoin protocol USDD fell to $0.97 five days ago on major crypto exchanges. The market is still shaky, which has gotten a lot of investors very worried. Some have already cashed in to avoid making more losses in the market.
The sudden crash of Terra’s LUNA and UST has caused a lot of upheavals in the market, with many losing millions from the incident. Experts are now monitoring other stablecoins in case there is a ripple effect from the UST collapse.
To help with the market fluctuations, Tron DAO Reserve has backed the USDD peg after infusing 700 million USD Coin.
Source: Crypto News