Abracadabra Community Initiates Orderly Protocol Wind-Down and MIM Liquidation Proposal

TechFlow reports that on September 30, the Abracadabra community is voting on a proposal for the orderly closure of the protocol and the MIM (Magic Internet Money) stablecoin. The proposal indicates that, affected by previous multiple hacker attacks and other factors, the protocol currently carries approximately $21 million in bad debt, while the circulating MIM supply stands at nearly $22 million against executable collateral valued at only around $900,000. The effective asset reserve ratio has dropped below 4%, leaving no viable path to restore its peg.

According to the liquidation plan, the protocol plans to convert all types of collateral in the vault into wrapped ether (WETH) and distribute them proportionally to users via Merkl smart contracts. Specifically, borrowers will receive the remaining value of their deposited collateral after deducting the corresponding debt (valued at $1 per MIM); MIM holders will receive a portion of the remaining funds designated for debt repayment proportional to their snapshot balances, currently estimated at approximately $0.04 per MIM. Six months after claims open, unclaimed assets will be prioritized to compensate those who have already claimed MIM (up to a $1 face value), with any remaining balance distributed to borrowers according to their debt ratios. Upon full completion of the liquidation process, the protocol will officially cease operations, and the team will no longer bear technical or legal maintenance responsibilities.