“A de-centralized, global network of software agents that do not rely on any one server to function.”
The “ohm staking calculator” is a tool that allows users to calculate how much they will earn from staking. The “DeFi Wonderland” is an article that showcases the future of decentralized finance.
There’s a fresh wave of Defi 2.0 on the horizon. Through leverage and yield-bearing tokens, mass investors and Defi fans are gradually leaning towards high yield staking. Through OHM staking, we’ve witnessed Olympus DAO provide 7,614 percent APY. Many investors thought it was a Ponzi scam at first, but we subsequently learned that it was Treasury-regulated APY. The OHM created for staking rewards is backed by a government reserve, and compound interest is applied after each locking period, making it extremely lucrative.
While we don’t know how long this staking strategy will last, other decentralized protocols like Abracadabra Money and Wonderland are attracting new users by stressing substantial yearly payouts and no tax responsibilities. At the present, if you stake $1000 in $TIME, you will get a $71,208 percent annual percentage yield. In the case of Abracadabra money’s MIM tokens, you may borrow money from the yield-bearing tokens you staked and leverage a position with only one multi-part transaction.
Isn’t it all a little too nice to be true? But before we reject it, let’s look into why the APY is so high and how Abracadabra Money lends and borrows.
Magic Internet Money ($MIM) is a kind of cryptocurrency.
Abracadabra Money’s price and total protocol users skyrocketed in only a few months. It demonstrates that Defi 2.0 is the next big thing in crypto. However, why is this the case?
Abracadabra Money is a decentralized system that uses asset-backed stablecoins to provide a high-yield staking pool. The $MIM tokens, unlike ordinary stablecoins, are not managed by a central body. As a result, it has a far greater acceptance rate than other centralized protocols. Also, because to its ever-growing community, Abracadabra Money’s governance token, $SPELL, has seen stratospheric growth in a short amount of time.
The total locked value on Abracadabra surged as more individuals realized the possibilities of Magic Internet Money. On November 18th, it reached $4.65 billion, up from less than $100 million in July. MIM tokens are also quickly increasing in circulation, with a market cap of over $2 billion.
Abracadabra.money’s total value is locked. Defi Llama is the source of this information.
Thousands of people have staked on Abracadabra Money because of the expansion of stablecoins in current bull cycle. Because to SPELL’s cross-chain interoperability, it allowed anybody to use the protocol. Ethereum, Arbitrum, and Arbitrum are among the protocols presently supported by Abracadabra. Convex Finance, Yearn Finance, Curve Finance, and Sushiswap are some of the cross-chain connectors that users take use of.
Aside from stablecoin functionality and cross-chain characteristics, the MIM tokens offer another benefit that all Defi users would appreciate. The circulating supply and tokenomics structure are both diminishing. $SPELL token holders may exercise their voting rights on emissions, which helps to keep network inflation under control. In addition, the team has decided to burn 8.7 billion SPELL tokens from the supply, after a significant price increase in recent weeks.
Now that we’ve learned about Abracadabra Money’s history and why Defi users are so positive on $SPELL, let’s look at how lending and borrowing operate.
The capacity to utilize yield-bearing tokens as collateral and borrow against Magic Internet Money is at the heart of Abracadabra’s functioning. Some of you may believe that as more money is borrowed, the chance of liquidation increases, however this is not the case with $MIM. The danger of liquidation decreases as the value of these interest-bearing tokens rises.
To put it another way, these tokens will serve as evidence of deposit. So, if the collateral is still in yield-bearing tokens, you may access a large portion of your deposit and make a lot of money. Your yearn tokens, for example, may yield anywhere from 7% to 9% on average, while the interest you pay for borrowing on MIM is just 0.8 percent. Simply put, you have exposure to rising-value yield-bearing tokens and access to cash that can produce a high return via farming.
Many individuals are familiar with the basics of Abracadabra. However, there is another way to enhance APY without incurring large risks. Let’s look at an example to better grasp this. Assume you invested $10,000 and purchased $UST stablecoin. You may now borrow $MIM with that money.
It’s here where the magic occurs. You may loop your location up to ten times as well. After the 10x loop, you’ll borrow 57,432 MIM tokens, giving you a 112 percent annual percentage yield and a 90% liquidation price. You’ll only gain 16.5 percent on Anchor Protocol if you do the same thing. You may earn 10 times your typical yield by utilizing Abracadabra’s $MIM tokens and loop function. To put it another way, you’re accumulating debt to increase your yield.
MIM Mechanics is a protocol that connects Ethereum, Terra, and Anchor Protocol.
The smart contract is the sole risk associated with such systems. In addition, liquidation will always be a risk. If you’re new to Abracadabra, it’s best not to risk any funds you can’t afford to lose. Begin with a limited number of loops and liquidation levels, then monitor the APYs after a few weeks.
($TIME) The DeFi Wonderland
Wonderland is an Avalanche reserve money system with a large return due to staking and compound interest. The $TIME of Wonderland is supported by a number of LP tokens, including MIM and TIME-AVAX. Daniel was the Founder, and it was produced by the same team as Abracadabra.
We can understand why the incentives are so large since TIME is a fork of Olympus DAO. For example, the annual percentage yield (APY) is above 90,000 percent. Because $TIME is based on an algorithm, it changes all the time. Based on staking and minting circumstances, the supply might increase or decrease.
Putting Money on Wonderland
You can primarily do three things in Wonderland: stake, bond, and sell. The APY increases if you invest $TIME. It also decreases if you sell. When individuals buy bonds, Wonderland’s treasury balance grows. The inherent value rises as the treasury rises. The inherent value diminishes when the treasury declines.
Here’s what people don’t understand and why they assume $TIME is a Ponzi scheme. The annual percentage yield (APY) for staking is 71,200 percent. That means that if you start with $1,000 today, you’ll have $712,000 in a year. In the instance of $TIME, however, this is not the case. Based on the minting schedule, the APY merely tells you how much your $TIME balance will grow. So, if you purchase one $TIME token today, you may end up with 712 $TIME tokens in a year, but there are likely to be many more $TIME tokens in circulation.
So, if the price continues to grow, you’ll be able to generate huge profits over time. Even if the price stabilizes, the total benefit will be substantial since the amount of $TIME tokens will grow after a year. This is why individuals are willing to spend more than 7 times the current price for $TIME because it has long-term worth.
However, we must evaluate the hazards associated with these absurd APY claims. The APY of 71K percent cannot be guaranteed if the protocol fails to reach a particular number of bond sales (depending on the quantity of $TIME staked). A month ago, I believe the APY was about 30K percent.
Furthermore, if the community loses interest or faith in Wonderland in the future, the intrinsic value will collapse. As a result, the stakes are enormous, but it is true of practically any asymmetrical wager. If you want to learn more about Defi 2.0, start small and study as much as you can.
Statement of Conclusion
No one can dispute that the Defi landscape is a hotbed of creativity. However, everything comes with its own set of hazards. Magic Internet Money is a one-of-a-kind way to get exposure to yield-bearing tokens while still having enough money to pursue other investments. While we must wait to see whether such a high APY can be sustained, it is worthwhile to investigate these new Defi protocols in order to stay ahead of the curve.
Karthikeya Gutta, a crypto writer and freelance contributor for ItsBlockchain, was born and raised in India. With in-depth analysis and research, he covers many facets of the sector. His enthusiasm for blockchain and the crypto ecosystem stems from his belief that it has the potential to transform the world and benefit millions of people.
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The “olympus dao founders” is a company that has been around for a while. They are proof that DeFi 2.0 is the next big trend in crypto.
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