Abracadabra proposes shutdown citing hacks, faces looting allegations

The embattled DeFi project Abracadabra is calling for "an orderly wind down", pointing to a series of security breaches that it says leaves its MIM stablecoin with "no viable path back to parity".

With the voting deadline set for Wednesday evening, only two votes had been cast at the time of reporting: 100 million SPELL in favour and 0.5 million against.

The proposal states that the protocol, once valued at $6 billion, now holds 22 million MIM in circulation backed by only $900,000 in "actionable backing", resulting in the supposedly dollar-pegged stablecoin being worth a mere $0.04.

Mikko Ohtamaa, co-founder of Trading Strategy and a DeFi commentator, has described the move as "treasury looting".

A post on X references a June governance proposal and the transfers that followed, calling them "questionable DAO activity".

Series of hacks

Since its 2021 launch, Abracadabra has experienced multiple security incidents in an already risky sector.

Although not a hack, the 2022 revelation that Abracadabra-associated 0xSifu was actually a long-time fraudster and a co-founder of QuadrigaCX severely damaged the project's reputation and credibility.

1/ This needs to be shared @0xSifu is the Co-founder of QuadrigaCX, Michael Patryn. If you are unfamiliar that is the Canadian exchange that collapsed in 2019 after the founder Gerald Cotten disappeared with $169m

I have confirmed this with Daniele over messages.

— ZachXBT (@zachxbt) January 27, 2022

In the same year, the DegenBox looped-leverage supercharger designed for the doomed UST erased roughly $1 billion from Abracadabra's total value locked (TVL).

Subsequently, a $6.5 million exploit in January 2024, then two more in March and October 2025 worth $13 million and $1.7 million, respectively, have left the protocol with $21 million in bad debt.

Treasury ‘looting’

The MIM stablecoin has been unpegged since June, when the DAO approved a "strategic transition and stewardship" of assets to a group "led by Anubis" — a name that carries negative connotations for those familiar with DeFi history.

The stated goal of the proposal was to "revitalize Abracadabra as a leading DeFi protocol, restore growth across the ecosystem, strengthen governance, and establish a clear roadmap for the long-term success of $SPELL and the broader Abracadabra platform".

Only two votes were cast, representing over 5 billion SPELL, and the proposal passed unopposed.

We're hard at work putting together an action plan for $MIM to help restore peg and improve protocol health.

Roadmap coming this week regarding next steps.

Thank you all for your support and patience.

— (@MIM_Spell) July 5, 2026

In early July, less than three months before the wind-down proposal, the project's X account said it would release a roadmap "to help restore [MIM] peg and improve protocol health". No further posts have been made since.

After the vote, Ohtamaa noted large treasury sales of MIM on Curve on June 8 and 11. The transactions allegedly earned the sellers around $0.5 million "while MIM was already losing its peg".

The following month, a so-called "treasury extraction" shifted over $8 million to a Binance deposit address and an unlabeled address.

UPDATE: MIM's Abracadabra-controlled Safes moved approximately $8.3M in treasury assets on July 14 with no public explanation.

Around 2,142 ETH and WETH went to a Binance-tagged deposit address. Approximately $4.30M in USDC and USDT went to an unlabeled address that immediately…

— Pharos (@PharosWatch) July 15, 2026

The wind-down proposal makes no mention of these funds, nor does it factor them into redemption calculations, instead valuing outstanding MIM based solely on the "actionable" remnant collateral.

The proposal simply says there is "no way to repeg MIM" and "no perspective of ever getting the protocol to function again or see any growth".

Balancer DAO to dissolve

Another long-running DeFi experiment is drawing to a close: Balancer's DAO has voted in favor of BIP-928 to cease operations.

BAL holders approved an orderly wind-down.

BIP-928 passed and BIP-929, the fork proposal, did not. Pools keep working as usual until October 30th, and withdrawals stay open the whole way through.

Here's the timeline and what it means for LPs and BAL holders.

— Balancer (@Balancer) September 29, 2026

The decision follows a devastating $130 million hack less than a year ago and the collapse of attempts to restore profitability. BAL holders are set to receive a pro-rata share of the DAO's $9 million treasury starting in May next year.