Abracadabra proposes wind-down amid treasury looting allegation

Abracadabra has proposed an orderly wind-down, blaming security incidents for leaving its Magic Internet Money (MIM) stablecoin with no viable path back to its dollar peg. The vote is set to close Wednesday evening. At the time of writing, it had received one vote representing 100 million SPELL in favor and one representing 0.5 million SPELL against. The proposal puts outstanding MIM supply at 22 million against $900,000 in actionable backing and values MIM at $0.04. The protocol was once valued at $6 billion. Abracadabra launched in 2021. In 2022, the identification of Abracadabra-linked 0xSifu as a longtime fraudster and QuadrigaCX co-founder damaged the project's reputation. That year, the collapse of UST wiped approximately $1 billion from Abracadabra's total value locked through its DegenBox product. Hacks in January 2024, March 2025 and October 2025 caused losses of $6.5 million, $13 million and $1.7 million, respectively. The protocol was left with $21 million in bad debt. MIM has been below its peg since June, when Abracadabra's DAO approved a proposal to transfer stewardship of assets to a group led by Anubis. That proposal said it aimed to revitalize the protocol, restore growth and strengthen governance. It passed without opposition on two votes representing more than 5 billion SPELL. In early July, Abracadabra's X account promised a roadmap to help restore MIM's peg and improve protocol health. The account has not posted since. Trading Strategy co-founder and DeFi commentator Mikko Ohtamaa calls the wind-down “treasury looting.” Ohtamaa pointed to treasury sales of MIM on Curve on June 8 and 11 that he said netted sellers approximately $0.5 million while MIM was losing its peg. More than $8 million was moved to a Binance deposit address and an unlabelled address the following month. The wind-down proposal does not address those funds or include them in its redemption calculations. Instead, the proposal calculates redemptions using the remaining actionable collateral. The proposal says there is no way to restore MIM's peg or prospect of getting the protocol functioning and growing again. Separately, Balancer's DAO voted to cease operations under proposal BIP-928, less than a year after a $130 million hack and unsuccessful efforts to return to profitability. BAL holders will receive a pro-rata share of the DAO's $9 million treasury beginning in May next year.