The crypto world is on the verge to impersonate the financial world by offering almost all the services offered by the traditional financial systems. Imagine if you could borrow the desired crypto and also at the same time earn interest on your collateral. Interesting, right! Spell is one such token that is the backbone of a lending decentralized platform Abracadabra. Here one can easily use tokens like yvWETH, yvUSDC and xSUSHI as collateral to borrow Magic Internet Money(MIM), a stablecoin.
Spell, the native token of the Abracadabra platform since its inception is witnessing extreme drain. Despite the asset attempting multiple times to halt the downtrend, the bear was successful in dragging the price much below the average levels. And now after following a steep downtrend, the price is showcasing a possibility of rebound but this also may be nullified very easily. As the bears appear strong enough to shed the gains within a very less time.
Will SPELL price rebound firmly to eliminate a zero? Let’s check it out!
What is Spell Token-In brief?
As mentioned before, the Spell token is the native and the governance token of the Abracadabra platform. The platform has yet another token working along with Spell within the ecosystem, Magic Internet Money(MIM). The major benefit of Spell token is staking and similar to most tokens on the Ethereum platform, Spell is staked to incur the following benefits
The Abracadabra platform is completely decentralized. And hence the voting authority and the importance of your vote is decided by the number of SPELL tokens you hold.
- Passive Income
On staking Spell tokens, the users earn rewards which are nothing but a portion of the transaction fees. These fees are gained in the form of interest gained by lending the MIM tokens.
How Does Spell Token Work?
Spell token works on the basics of the platform Abracadabra platform. The platform uses a different technique called the ‘Isolated Lending Market’ by which one can successfully leverage the Interest bearing tokens land eventually produce the MIM tokens. Below mentioned are the few steps involved in the whole process.
- Users need to deposit the collateral on the Abracadabra platform
- Further, the platform allocates a debt with interest to the borrower
- Later MIM tokens are deposited into the user’s wallet at the leverage chosen by the user itself
- The user can further use these tokens according to his choice
The user who stakes his SPELL token on the platform would receive an interest that is earned through the inducing interest when MIM tokens are borrowed.
Additional Read: Spell Token Technical Analysis
Will SPELL Price Hit $0.05 in 2022?
The SPELL token since the beginning maintained a considerable descending trend in the higher time frame. The price in the initial days started trading around $0.028 but absorbed a significant descending trend later. The plunge extracted more than 80% of the value and also added up with a zero in its value. Currently, no signs of a healthy rebound are witnessed as the buyers appear to be limited. Therefore until and unless the market trend flips, no major swing may be expected.
With a trading history of less than a year, the asset is expected to excel in the upcoming days. If the current trend is sustained, then the SPELL token may try to eliminate an additional zero by the end of 2022, trading around the level of $0.01. Else if another bull run similar to 2021 is ignited then the price may range as high as $0.015 to $0.022. Or else, if the bear comes back in action, then the price may be restricted below $0.01 levels.
Factors Impacting SPELL Price Today
The SPELL token price is deeply impacted by the functioning of its platform Abracadabra.
Borrowing & Lending
Abracadabra allows users to borrow tokens and also earn interest on the collateral at the same time.
Isolated Risks Market
The platform allows the user to analyze and calculate the risk within the deal he/she wishes to enter much before. And hence one can determine the approximate risks and also the profits to be incurred.
DeFi 2.0 Centric Platfrom
Abracadabra enables noteworthy features to make the platform more efficient which is the main characteristics of the DeFi 2.0 which aims to address the complexities of DeFi 1.0
The centralized stablecoins in recent times have displayed their shortcomings concerning legal compliance. And hence decentralized stablecoins such as MIM may thrive outperforming most of the stablecoins in the market.
Governance & Rewards
SPELL token along with being a native token is also the governance token. The investor with more SPELL tokens has more power to exercise his vote which is considered a priority than the investor with a lesser number of tokens. On the other hand, the rewards or interest, etc are paid in the form of SPELL which may broaden the adoption of the asset.
Where & How to Buy Spell Token(SPELL)
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