Abracadabra’s team has proposed shutting down the lending protocol and its Magic Internet Money (MIM) stablecoin, with MIM holders expected to recover roughly $0.04 per token.
The Snapshot vote was posted on Sept. 29 and closes at 1:24 p.m. ET on Wednesday. As of Wednesday morning, two wallets had voted. The address that submitted the proposal cast about 100 million in voting power in favor, while one other wallet cast roughly 523,000 against. That leaves the proposer with about 99.5% of the voting power cast so far.
MIM’s collateral shortfall
In the proposal, the team said a series of hacks left MIM severely under-backed and without a viable path back to parity.
Collateral backing MIM debt totals about $1.2 million. Around $300,000 of that is tied up in an immutable Arbitrum WETH cauldron whose interest rate cannot be changed, leaving about $900,000 the team can actually act on. At the same time, nearly $22 million of MIM sits outside protocol addresses.
The team put the hole at about $21 million of bad debt and said MIM’s effective backing is below $0.04, meaning more than 95% is unbacked. According to CoinGecko, MIM traded near $0.029 on Wednesday.
How the payout plan would work
Under the proposal, the protocol would reclaim collateral from its lending markets, known as cauldrons, swap that collateral into ether, and distribute the proceeds through a Merkl contract.
Borrowers would receive the value of their collateral minus their MIM debt, with that debt counted at $1 per MIM. Whatever remains would then be split among MIM holders on a pro rata basis.
A snapshot of MIM balances and cauldron positions would be taken once all collateral has been swapped, and no earlier than Oct. 15.
If any funds remain unclaimed after six months, those assets would go first to MIM holders who did claim, up to $1 per MIM. Anything beyond that would go to borrowers.
Why the team wants to wind it down
The team said it considered raising interest rates to force liquidations and push up MIM’s price, but concluded that any bounce would be brief and would benefit only the fastest sellers.
The proposal also pointed to a deadline. LayerZero Labs is retiring its V1 relayer, and funds must be withdrawn before Dec. 15. That puts about $1 million in Abracadabra’s Stargate USDC and USDT cauldrons at risk.
Citing legal counsel, the proposal said MIM is a liability that ranks above the SPELL governance token. 「Until this liability can be served fully, SPELL token does not retain any accounting value,」 the proposal said.
A bruising stretch for MIM
The proposal arrives nearly four months after a June vote that handed operational stewardship and treasury management to a group led by an entity called Anubis. Only two wallets voted on that proposal as well.
Abracadabra had already been hit by several security incidents. In January 2024, the protocol suffered a $6.5 million exploit that knocked MIM off its peg. In March 2025, an attacker drained about $13 million from cauldrons tied to GMX liquidity tokens, an exploit Abracadabra later confirmed on X. In October 2025, an attacker minted about 1.79 million MIM from deprecated cauldrons, which the DAO treasury later bought back.
What happens if the plan passes
If approved, the protocol will be shut down once liquidation is complete. Positions in immutable cauldrons, however, will remain withdrawable onchain.
The team also said it will not bear legal or technical responsibility for maintaining the protocol going forward, and that the interface will remain online without active maintenance.