Investing In Spell Token (SPELL) – Everything You Need to Know

While most people who are not into crypto see the industry as an incredibly complex thing, those who have spent some time on the inside understand that there are different levels of complexity. For example, Bitcoin (BTC) is rather simple, as all it does is payments, and that’s it. On the other hand, tokens like Ethereum are far more complex, in terms of ecosystem and use cases.

And then, there are tokens like the Spell Token (SPELL), which is a moderately-sized cog in a much larger machine, but also one that has been crucial for the whole system’s functioning. You see, SPELL is a token in the system of a decentralized lending platform called Abracadabra.Money.

It is also an ERC-20 token that runs on the Ethereum network, and within Abracadabra.Money’s ecosystem, it is only one of the multiple tokens and token types that all play important roles. Today, we were interested in seeing SPELL’s role in the ecosystem, whether it solves some problems, and if so, which ones, and what are the benefits of interacting with it.

What Problems Does Spell Token (SPELL) Solve?

SPELL is not exactly a type of token meant to solve problems in the crypto industry or the real world. However, it does have an important role play in Abracadabra.Money’s system, where it helps in two ways:

It helped revolutionize lending

On Abracadabra.Money’s platform, Spell Token functions as a reward token. The platform allows users to deposit collateral and borrow Magic Internet Money (MIM), engage in yield farming, staking, and more, in order to farm SPELL. All of this facilitates better liquidity for certain crypto pairs, such as ETH/SPELL, as well as MIM/3CRV.

Providing incentive

Speaking of offering rewards, that is one of SPELL token’s main purposes in the ecosystem. By offering incentives to users, the project ensures their support and loyalty, which in turn ensures its price stability and potential growth.

Benefits of Spell Token (SPELL)

While SPELL wasn’t created with problem-solving in mind, it was made in order to provide a number of benefits for the project’s users, to ensure that they will develop a stable relationship with the entire project. With that in mind, here is what you get if you decide to join Abracadabra.Money’s platform.

Liquidity rewards

We already mentioned that SPELL is used for offering liquidity rewards for users who wish to farm SPELL. Essentially, the process is similar to regular liquidity providing in any other ecosystem. All that users need to do is lock up their tokens in liquidity pools in order for the project to have them at its disposal and quickly process transactions when there is a need. In return, users are paid in SPELL, which brings passive income.

Staking

Staking works in the same way as elsewhere, too. In fact, staking has grown to be one of the most popular activities in the DeFi sector, which is not surprising, given what is involved. Users simply lock up their tokens and receive rewards for it, which removes the risks associated with other crypto activities, such as trading. In fact, staking has become particularly popular with long-term investors, or HODLers, as they are also known. Not only do they get to keep their tokens and hold them for months, or even years, as they are waiting for the token’s price to increase, but they also get new tokens as rewards. As a result, their total number of tokens is increasing without them having to buy them and spend their own money.

Other uses

Fees earned from the protocol are one of the two primary use cases for SPELL. Abracadabra uses interest-bearing cryptocurrencies such as CRV, CVX, and YFI. These tokens can be provided to the platform as collateral to mint MIM, which is a USD-pegged stablecoin. Meanwhile, the SPELL token is distributed as farming incentives, team allocation, and even during the IDOs (Initial DEX Offerings), where users have to use the token to invest in new tokens that are being sold.

Governance

Finally, there is the matter of governance to discuss, which is another of the SPELL token’s two primary use cases. With the project being fully decentralized, its community of token holders is the one who makes decisions that will impact the future of the project. They can either submit proposals for new upgrades, features, changes, and alike, or they can vote on the proposals submitted by others in order to provide their own insight.

How Does Spell Token (SPELL) Work?

Spell Token (SPELL) is a reward token created and used by a decentralized lending platform Abracadabra.Money. The platform uses interest-bearing tokens, or ibTKNs (such as CRV, YFI, CVX) to offer collateral for borrowing another token called Magic Internet Money (MIM). MIM is a stablecoin pegged to the US dollar. So, in a way, it is not too different from DAI.

However, if users contribute to the project by engaging in one or more of many offered opportunities, such as yield farming, staking liquidity providing, and alike, they receive SPELL token rewards.

With SPELL, they can also participate in the project’s governance, or simply stick to earning rewards and slowly increasing their wealth through a combination of HODLing and receiving passive income.

It is also worth noting that Abracadabra uses Kashi Lending Technology, created by another project, SushiSwap. This allowed it to bring numerous innovations to DeFi lending, such as isolating the lending market, so that the risks are not shared by the entire ecosystem. For example, if liquidity for a specific pair runs out, then only that pair will suffer, while the rest of them will continue to operate as usual.

How to Buy Spell Token (SPELL)

Currently, Spell Token (SPELL) is available for purchase on the following exchanges:

Uphold – This is one of the top exchanges for USA & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommend exchange for Canada and USA residents. (Excluding New York & Washington state)

Binance – Accepts Australia, Singapore, UK and most of the world. Canada & USA residents are prohibited. Use Discount Code: EE59L0QP for 10% cashback on all trading fees. 

WazirX – This exchange is part of the Binance Group, which ensures a high standard of quality.  It is the best exchange for residents of India.

Spell Token (SPELL) — The governance and rewards token of Abracadabra

Spell Token is not a token meant to change the world, but it is a token meant to encourage users to approach a project that is trying to improve decentralized lending. Furthermore, those who include it in their portfolio are also opening doors to numerous benefits of its native ecosystem, which is quite rewarding in itself, which is why we believe that the token does have a great future as a reward cryptocurrency.