Abracadabra DAO approves shutdown after cutting quorum to 300 million SPELL

Abracadabra DAO approved a proposal to close the protocol on a second attempt after reducing the quorum from 3 billion to 300 million SPELL. The reduced threshold was worth just $26,000. Abracadabra is the decentralized finance project behind Magic Internet Money (MIM), a stablecoin that has long traded away from its peg. The protocol once had a value of $6 billion.

The shutdown proposal arrived less than four months after the DAO approved a strategic transfer of stewardship. The earlier proposal promised to revive Abracadabra and provide a long-term roadmap for SPELL and the platform. The stewardship team claims the team "worked effortlessly" to improve the situation. An initial shutdown attempt in late September nevertheless drew controversy.

The shutdown proposal put MIM's available backing at only $900,000 against a supply of 22 million MIM. The proposal offered MIM holders four cents per dollar. The proposal did not address unexplained outflows of almost $9 million during June and July. The proposal warned that users could pursue liquidation through legal action, increasing costs for all stakeholders.

Last week's revised proposal changed only the quorum threshold. Votes from an address that Etherscan labels "Abracadabra.Money: MIM Treasury" pushed participation above the reduced threshold. The treasury-labelled address has accumulated $3 million worth of WETH in recent days. The proposal did not discuss that WETH or whether the WETH would count toward MIM's backing.

Only two voters participated in the latest Snapshot vote. The first vote faced accusations of looting the treasury and failed to reach quorum with slightly more than 100 million SPELL votes. The proposal's author cast 100 million SPELL votes in favor in the latest vote. The author bought 40 million of those SPELL with USDC received directly from the treasury-labelled wallet. The author bought another 59.5 million SPELL with WETH, most of which also originated from the treasury-labelled wallet. The treasury-labelled wallet itself supplied the remaining 296 million votes. The combined 396 million votes remained below the DAO's original quorum of 3 billion SPELL.

The revised proposal disclosed a quorum adjustment, citing a SPELL supply of slightly more than 1 billion when the proposal was published. The proposal argued that the existing quorum was irrelevant and required revision to prevent the protocol from becoming unable to act. According to the proposal, previous Abracadabra team members hold the Snapshot space's administrator keys and cannot be reached. The proposal said the fixed quorum setting therefore could not be changed. The proposal established a replacement threshold of 30% participation, citing simplicity, users' interests and alignment with market standards. Snapshot displays the vote as rejected, but the vote apparently passed under the adjustment's terms.

Jack Niewold, identified as Project Lead in the June proposal, had not responded to a request for comment.