Abracadabra Proposes Shutting Down MIM Stablecoin Amid $21m Bad Debt

The Abracadabra lending protocol has proposed shutting down its Magic Internet Money (MIM) stablecoin, citing 'approximately $21m of bad debt' and an effective backing level of below $0.04 per token.

The proposal, which has seen only two wallets vote so far, would return around 4 cents per token to MIM holders. Borrowers would receive the value of their collateral minus their MIM debt, while MIM holders would share what's left, pro rata.

The Abracadabra team has ruled out raising interest rates to force liquidations, citing the short-lived nature of any bump. The proposal also notes that MIM counts as a liability that sits above the SPELL governance token, meaning SPELL holders will receive nothing.

The proposal cites three hacks that have led to the current situation: a $6.5 million exploit in January 2024, a $13 million exploit in March 2025, and a $1.79 million exploit in October 2025.