Abracadabra Wants to Shut MIM. The Bid Is 4 Cents.
This is a wind-down proposal, not a trade. EGamers.io on Oct. 3 says the team behind Abracadabra wants to shut the protocol and its MIM stablecoin, after identifying roughly $21 million in bad debt. The same piece says most of the remaining collateral would be liquidated into ether, and that holders who show up are looking at around 4 cents on the token. I am not telling you to buy, sell, or claim. I am walking through the numbers the article attributes to the proposal, because a stablecoin that says it has no path back to a dollar is a different object from the bank coins we have been writing about.
We wrote a card settlement that never puts the coin in the merchant’s hands in SoFiUSD. We wrote a platform that lets other companies mint on someone else’s dollar in PayPal’s PYUSDx. We wrote a launch that could not keep its collateral story straight in RealFi’s USDR. MIM is the opposite end of that shelf. The proposal, as reported, is an admission that the peg is not coming back.
MIM’s 4-cent figure is a gap, not a slogan
The proposal’s own language, quoted in the piece, is that a string of hacks left MIM “severely under-backed with no viable path back to parity.” The arithmetic under that sentence is small on one side and large on the other. Collateral securing MIM debt comes to about $1.2 million. About $300,000 of that is locked in an immutable Arbitrum WETH cauldron, where the interest rate cannot be adjusted. That leaves about $900,000 the team says it can actually work with.
Close to $22 million worth of MIM sits outside protocol addresses. The team described the gap as approximately $21 million of bad debt, and said MIM’s effective backing is below $0.04, more than 95% unbacked. Four cents is not a rounded insult. It is what you get if you divide a little over a million dollars of workable collateral by a pile of tokens closer to $22 million, and then round. I am not redoing their division. I am saying the article’s two inputs, $1.2 million collateral and roughly $22 million of MIM outside the protocol, are how a reader gets to “under 4 cents” without trusting the headline.
The market had already walked past the proposal’s backing number. The piece says that on Wednesday MIM changed hands at around $0.029, which is lower than the backing level the proposal cites. A token trading under the recovery estimate is a market saying the estimate may be optimistic, or that the claim process will not pay everyone who holds, or both. I do not have an order book in the article. I have one print. It is enough to stop treating 4 cents as a floor someone has promised you.
Two wallets are the governance
The Snapshot vote opened on Sept. 29 and, as the article writes it, ends at 1:24 p.m. ET on Wednesday. By Wednesday morning, two wallets had voted. The wallet that submitted the proposal voted in favor with around 100 million in voting power. A second wallet voted against with about 523,000. The proposer held roughly 99.5% of votes cast. The piece says there is little doubt how the vote will end.
The article is dated Oct. 3. “Wednesday” in that sentence could be the Wednesday just past or the one still ahead, and the extract does not print a calendar date next to the 1:24 p.m. deadline. I am not going to resolve it. What I can use is the participation: two wallets, one of them the proposer, 99.5% of the power that bothered to show up. That is not a community debate. It is a formality with a dissenting address attached.
Abracadabra has done this shape before. In June, almost four months before this piece, a proposal gave operational stewardship and treasury management to a group led by an entity called Anubis. Only two wallets voted on that one too. A protocol that twice settles its future with a pair of wallets is telling you what “DAO” means in practice here. The second wallet at 523,000 is not nothing. Next to 100 million it does not move the result. If you are waiting for a late surge of holders to reject the shutdown, this week’s count is the evidence against that hope, and it is a count of two.
The payout is ether, a deadline, and a forfeiture
Abracadabra calls its lending markets cauldrons. The plan, as reported, is to withdraw collateral from them, convert it to ether, and hand it out through a Merkl contract. That is a distribution design, not a guarantee that the interface will make it easy. Merkl is the pipe. Ether is the asset. The cauldrons are where the remaining collateral sits, except for the immutable slice the team cannot retune.
The claim rule is the part I would not skim. MIM holders who do not claim within six months lose their share to the holders who did claim, up to $1 per MIM. Any funds still left after that go to borrowers. The six-month window, the piece says, starts after Oct. 15. Unclaimed money does not sit in a courtesy account. It moves to the people who filed. If the recovery is around 4 cents and the cap on the redistributed share is $1, the cap is theoretical unless later money appears. The rule still matters, because not filing is how a 4-cent claim becomes someone else’s 4-cent claim.
I am not walking anyone through a claim transaction. The article does not print a contract address, a Merkl campaign id, or a wallet checklist. Repeating “mark down Oct. 15” is as far as the source goes. After that date, the six-month clock is the source’s clock. If you hold MIM and you want the distribution, the piece’s warning is that silence pays the people who were not silent. That is a description of the rule. It is not advice to file.
They looked at raising rates, and a Dec. 15 clock is separate
The team told the proposal process it considered the obvious alternative: raise interest rates, force liquidations, try to lift MIM’s price. It concluded that any bump would be short-lived and would “benefit only the fastest sellers.” I read that as a refusal to run a squeeze that pays the wallets quick enough to exit into the bump. Whether that refusal is protective or convenient depends on who still holds the token. The article does not split the holder list. It does record the conclusion. A rate hike is not the plan.
A second deadline is not about MIM’s price at all. LayerZero Labs is retiring its V1 relayer, and funds have to be withdrawn before Dec. 15. If nobody acts, roughly $1 million in Abracadabra’s Stargate USDC and USDT cauldrons is at risk. That million is in the same neighborhood as the $1.2 million collateral figure, and it is not the same pile. One number is what secures MIM debt. The other is what sits in Stargate cauldrons that a retiring relayer can strand. Losing the second pile would make the first pile’s job harder, or would be a separate hole. The article lists them as related pressure, not as a single sum. I am not adding them.
The immutable Arbitrum WETH cauldron, about $300,000, is the slice the rate discussion cannot touch. The interest rate there cannot be adjusted. Even the alternative the team rejected would not have reached that pot. Positions in immutable cauldrons can still be withdrawn onchain if the shutdown passes, because nobody can turn those contracts off. That is the one part of the protocol the proposal does not pretend to control.
SPELL is last, and the proposal says last means nothing
Citing legal counsel, the proposal said MIM counts as a liability that sits above the SPELL governance token. The line the article quotes: “Until this liability can be served fully, SPELL token does not retain any accounting value.” With MIM backed at less than 4 cents on the dollar, the piece says that liability will not be served fully. The plain reading is that SPELL holders receive nothing under this proposal.
Governance tokens often trade as if they are a claim on whatever is left. This proposal says the leftover is already spoken for by the stablecoin liability, and the leftover is not enough. I would not translate “no accounting value” into a market price. SPELL can still change hands at a number the proposal calls worthless. The proposal is an accounting order: MIM holders, then borrowers if anything remains after the claim window, and SPELL not in the line. Two-wallet governance is what makes that order stick, if the vote closes the way the morning count suggests.
The exploits are the history the proposal is standing on
The article says the hacks the team mentions are on the record, and it gives three. In January 2024, a $6.5 million exploit pushed MIM off its peg. In March 2025, an attacker took about $13 million from cauldrons linked to GMX liquidity tokens. Abracadabra confirmed that one on X, according to the piece. In October 2025, an attacker minted about 1.79 million MIM from deprecated cauldrons, and the DAO treasury later bought those tokens back.
Those dates are older than this week. I am using them because the Oct. 3 article uses them as the proposal’s backstory, not because I re-read the 2024 post-mortem. The buyback of the October 2025 mint is the awkward one. The treasury spent money to take those tokens in, and the 2026 proposal still describes a coin more than 95% unbacked. A buyback that does not restore a peg is a cost, not a repair. The article does not say how much the treasury paid. I will not guess.
Three exploits over two years is also why “raise rates and grow out of it” was a hard sell inside the proposal. The hole is not one incident with a clean insurance claim attached. It is a sequence the team is now calling a dead end. A reader can disagree with that conclusion. The article’s job, and mine, is to show the conclusion is in the proposal, next to the dollar figures, not in a mood.
After the vote, the interface stays and the duty does not
If the proposal passes, the protocol shuts down when the liquidation is finished. The team said it will not carry any legal or technical responsibility to maintain the protocol. The interface will remain online and will not be actively maintained. That combination is how people lose the claim they meant to file. A website that still loads is not a team that will answer. The six-month window is the only clock the piece gives you, and it starts after Oct. 15, not after you notice the site looks the same.
Immutable cauldron positions remain withdrawable onchain. Everything else in the plan runs through the collateral sale into ether and the Merkl distribution. I do not have a timeline for how fast the liquidation finishes, beyond “the shutdown follows the liquidation.” A slow sale into ether is a price risk on top of the 4-cent estimate. The article does not model it. A reader who treats 4 cents as cash already in a wallet is ahead of the proposal.
Nothing here is a recommendation to hold, exit, or ignore the vote. The incremental fact, next to the bank stablecoins on this site, is that a DeFi dollar can publish its own obituary with a recovery estimate under a nickel, a Snapshot of two wallets, and a governance token placed last in line. The 4 cents is the number. The two wallets are the reason the number may become the outcome.
