31,32% of the stablecoin collateral is backed by tokens of the FTX crypto exchange

​FTT-backed MIM stablecoin loses its peg to the dollar

08.11.2022 - 10:45


3 min

What’s new? On November 8, the Magic Internet Money (MIM) stablecoin lost parity against the US dollar, falling below the $0,975 mark. Twitter user kinnif reported that 31,32% ($108,35 million) of MIM collateral are tokens of the FTX (FTT) crypto exchange, and the reason for depegging the asset from the dollar was the liquidation of FTT by the Binance exchange, launched on November 5. Due to the collapse of the stablecoin’s rate to the critical point, Y2K Finance’s MIM hedge vault depositors were paid 1700 ETH. As of November 8, 10:40 UTC, MIM has still not recovered its peg and is trading at $0,9849, according to aggregator CoinMarketCap.

More details about payouts. Y2K Finance customers can buy insurance against the loss of the peg of any of the assets backed by the project by depositing ETH to the corresponding hedge vault. One of the largest addresses that invested 8,638 ETH in MIM insurance received a payout of 74,79 ETH (~$110 689). Representatives of Decentralized Autonomous Organization (DAO) Digits reported that the project earned 99,52 ETH (~$147 290) through this mechanism.

Since the MIM stablecoin has risen above the critical mark of $0,975, payouts to Y2K Finance’s depositors are currently suspended.

Situation around FTT. On November 2, the media published data from a report by Alameda Research, which, like FTX, is owned by billionaire Sam Bankman-Fried. According to the documents, FTT tokens represent the largest share of the company’s accounts. Crypto exchange Binance has since begun a complete liquidationof its positions in FTT. The procedure will be stretched over several months to minimize the impact on the market.

On November 7, Alameda began selling off several tokens from its reserves. The company has 18 cryptocurrencies in its reserves, each with more than $1 million in holdings. On November 8, FTT collapsed by 29% and the rate of Bybit’s (BIT) exchange token was dropping by 20%. Bybit suggested that Alameda, which has more than 100 million BIT on its accounts, was involved in the dump of the asset. However, the company denied the information about the sale, after which the rate of the asset began to recover.

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