Spell Token Explained: Governance, Yield Farming & Protocol Fees

Spell Token (SPELL) is the native governance and revenue-sharing token of the Abracadabra.Money decentralized lending platform. As an ERC-20 token, SPELL plays a vital role in maintaining the ecosystem’s functionality. Users can deposit interest-bearing tokens as collateral to mint Magic Internet Money (MIM) — a USD-pegged stablecoin. In return, SPELL supports governance, incentivizes liquidity, and distributes platform revenue to token holders.

Picture Spell Token Explained: Governance, Yield Farming & Protocol Fees 2 | TON app

How Is Spell Token Used?

SPELL serves multiple purposes within the Abracadabra.Money ecosystem:

1. Governance

Holders of SPELL tokens can participate in the platform’s decentralized governance. This includes:

Submitting new proposals for features and protocol upgrades.
Voting on community-submitted proposals.
This democratic model ensures that the community has a voice in shaping the protocol’s future.

2. Revenue Sharing

Abracadabra generates revenue through borrowing interest and liquidation fees. A portion of this revenue is redistributed to SPELL holders via:

Fee-sharing pools funded by platform activities.
Incentives for staking SPELL, rewarding long-term holders.

3. Liquidity Rewards

Users who provide liquidity (e.g., by supplying assets into lending pools) receive SPELL tokens as rewards. These incentives help maintain deep liquidity on the platform and allow users to earn passive income.

4. Staking

SPELL can be staked for additional rewards:

Stakers lock up SPELL and receive staking rewards over time.
This mechanism appeals to long-term investors looking for steady, passive returns without the risks of active trading.

5. Farming Incentives

SPELL is also distributed to users involved in yield farming, staking, and liquidity mining, encouraging active participation and ecosystem growth.

How to Store Spell Token (SPELL)

To safely store your SPELL tokens, follow these steps:

1. Get an Ethereum-Compatible Wallet

SPELL is an ERC-20 token, so you’ll need a wallet that supports Ethereum. Multi-currency wallets like Guarda are a great choice and support over 400,000 assets, including SPELL.

2. Download or Access the Wallet

Use the Guarda mobile app (iOS or Android), desktop app, or the web version directly from your browser.

3. Create and Secure Your Wallet

Set a strong password and back up your wallet keys or recovery phrase. Store this backup offline in a secure place.

4. Add SPELL to Your Wallet

Create a new wallet address or scan a QR code to receive SPELL from an exchange or another wallet.

5. Avoid Storing SPELL on Exchanges

For maximum security, transfer your SPELL from exchanges to your personal wallet. This gives you full control over your assets and minimizes the risk of exchange hacks.

How to Buy Spell Token (SPELL)

Follow these steps to purchase SPELL tokens easily and securely:

1. Choose a Centralized Exchange (CEX)

Picture Spell Token Explained: Governance, Yield Farming & Protocol Fees 3 | TON app

Pick a reputable exchange that supports SPELL trading, such as:

Binance
KuCoin
CEX.IO

2. Register and Secure Your Account

Sign up on the exchange platform.
Enable two-factor authentication (2FA) to protect your account.

3. Verify Your Identity (KYC)

Complete the required KYC process by submitting identification documents and other personal details.

4. Add a Payment Method

Link a credit/debit card, bank account, or another supported payment method.
Review the fees and processing times for each method.

5. Buy SPELL Tokens

Navigate to the SPELL token page on the exchange.
Enter the amount you wish to buy and confirm the transaction.

6. Store or Use Your SPELL

You can hold SPELL on the exchange or transfer it to your personal wallet for added security.
SPELL can also be used for staking, governance, or earning liquidity rewards.