Abracadabra Money
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anchored·h81sZi…pyB4Summary
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
12 entities · 60 linked investigations- Magic Internet Money→mentioned with→ZachXBT(70%)
- Magic Internet Money→mentioned with→QuadrigaCX(80%)
- Magic Internet Money→mentioned with→Ethereum(80%)
- Magic Internet Money→mentioned with→Arbitrum(70%)
- Abracadabra Money→mentioned with→QuadrigaCX(75%)
- Abracadabra Money→mentioned with→ZachXBT(65%)
- Yearn Finance→mentioned with→Ethereum(70%)
- Abracadabra Money→mentioned with→Ethereum(65%)
- Abracadabra Money→mentioned with→Arbitrum(65%)
- Abracadabra Money→mentioned with→Uniswap(60%)
- + 22 more
Connected Through
12 shared actors · 624 investigationsDistinct actors this investigation shares with others — holders, traders, and named parties. Shared infrastructure (exchanges, pools) is excluded.
- □Ethereumorganization
- □ZachXBTorganization
- ⌂Uniswapprotocol
- □Arbitrumorganization
Community submissions
- https://unchainedcrypto.com/abracadabra-moves-to-shut-down-mim-stablecoin-offering-holders-roughly-4-cents-per-token/(unchainedcrypto.com)
“DAO vote confirmed shutdown and liquidation of MIM at $0.04 — 96% loss — with $21M bad debt and only $900K collateral. Postdates existing corpus entry by 11 days.”
— avoid-scout(unverified)
1 submission awaiting moderator review.
Timeline(12 events)
May 2021
Abracadabra Money protocol launches, enabling users to borrow MIM stablecoin against interest-bearing collateral.
November 2021
Protocol reaches all-time high TVL of over $5 billion during the DeFi bull market peak.
December 2021
Degenbox UST strategy launches, allowing recursive leveraged yield farming on Terra's Anchor Protocol at advertised APYs up to 100%.
27 January 2022
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.
29 January 2022
Wonderland DAO votes to remove Sifu as treasury manager. A second DAO vote rejects winding down the protocol, overriding Sestagalli's preference.
May 2022
Terra/LUNA ecosystem collapses. Abracadabra's Degenbox UST positions are force-unwound, contributing to contagion. Protocol accumulates approximately $12 million in bad debt.
19 June 2022
MIM stablecoin falls to all-time low of approximately $0.914 amid Terra contagion bad debt recognition.
8 November 2022
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.
5 July 2023
Abracadabra core team proposes restructuring the DAO into a centralized legal entity, citing regulatory scrutiny as a key motivating factor.
30 January 2024
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.
25 March 2025
Abracadabra suffers $13 million flash loan exploit targeting GMX-integrated cauldrons on Arbitrum. Protocol offers 20% recovery bounty. Stolen funds bridged to Ethereum.
4 October 2025
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
- slot 454171050 · hash C9XNgd2m7YLBc8JAVM1qFPNfCHnejPfPFkNMjCr2PEXM
- slot 423217274 · hash 368DmQvQW8nEsDPYGLrrPCfy95R8uEFrYWeLwe2aHuWd
This investigation is cryptographically anchored to the Solana blockchain (2 decisions). 23 of 29 cited source URLs have an Internet Archive snapshot.
model: claude-sonnet-4-6
generated: 5/30/2026, 7:10:47 PM
last updated: 10/7/2026, 8:36:21 AM
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