Abracadabra Money
Summary
Abracadabra Money is a multi-chain DeFi lending protocol founded in 2021 that allows users to mint Magic Internet Money (MIM), a USD-pegged stablecoin, using interest-bearing tokens as collateral. The protocol has suffered four significant security incidents between 2022 and 2025, losing over $21 million in aggregate, and its MIM stablecoin has lost its dollar peg on multiple occasions. The protocol is also linked to the Wonderland/Sifu scandal of early 2022, which caused severe reputational and financial contagion across its interconnected 'Frog Nation' ecosystem.
Connected Entities
1 entities- + 2 more
Timeline(12 events)
2021-05-01
Abracadabra Money protocol launches, enabling users to borrow MIM stablecoin against interest-bearing collateral.
2021-11-01
Protocol reaches all-time high TVL of over $5 billion during the DeFi bull market peak.
2021-12-01
Degenbox UST strategy launches, allowing recursive leveraged yield farming on Terra's Anchor Protocol at advertised APYs up to 100%.
2022-01-27
ZachXBT reveals Wonderland CFO 'Sifu' is Michael Patryn, co-founder of the QuadrigaCX exchange fraud and convicted felon. Sestagalli admits prior knowledge. SPELL, TIME, and ICE tokens crash 30%+. MIM depegs under selling pressure.
2022-01-29
Wonderland DAO votes to remove Sifu as treasury manager. A second DAO vote rejects winding down the protocol, overriding Sestagalli's preference.
2022-05-01
Terra/LUNA ecosystem collapses. Abracadabra's Degenbox UST positions are force-unwound, contributing to contagion. Protocol accumulates approximately $12 million in bad debt.
2022-06-19
MIM stablecoin falls to all-time low of approximately $0.914 amid Terra contagion bad debt recognition.
2022-11-08
FTX collapses; FTT, which represented ~33% of MIM collateral (~$120M TVL), crashes. MIM briefly depegs to ~$0.95. Protocol discloses 12.5 million MIM in bad debt and begins 20-month repayment plan.
2023-07-05
Abracadabra core team proposes restructuring the DAO into a centralized legal entity, citing regulatory scrutiny as a key motivating factor.
2024-01-30
Abracadabra suffers $6.4–6.5 million exploit via precision loss vulnerability in Cauldron V3/V4 contracts. MIM flash-crashes to $0.76. DAO announces buyback-and-burn response.
2025-03-25
Abracadabra suffers $13 million flash loan exploit targeting GMX-integrated cauldrons on Arbitrum. Protocol offers 20% recovery bounty. Stolen funds bridged to Ethereum.
2025-10-04
Abracadabra suffers third major exploit in under two years: $1.8 million stolen via business logic error in deprecated Cauldron V4 cook() function. Funds laundered via Tornado Cash. Protocol buys back 1.79M MIM to stabilize peg.
Decision Log
- hash: 368DmQvQW8nEsDPYGLrrPCfy95R8uEFrYWeLwe2aHuWd
This investigation is cryptographically anchored to the Solana blockchain and source URLs are archived via the Internet Archive.
model: claude-sonnet-4-6
generated: 5/30/2026, 7:10:47 PM
last updated: 5/30/2026, 7:10:50 PM
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