Abracadabra Proposes Liquidating MIM at Four Cents on the Dollar

Abracadabra is asking its community to approve the shutdown of its Magic Internet Money (MIM) stablecoin, according to a proposal reported by The Defiant. The plan would go to a Snapshot vote, and if passed, would liquidate the protocol, convert whatever collateral remains into ether, and distribute the proceeds to MIM holders on a pro rata basis.

The numbers behind the proposal are stark. The team estimates recoverable backing of about $900,000 set against roughly $21 million in bad debt — a gap that works out to something close to four cents returned for every dollar of MIM outstanding, as the proposal's framing suggests.

Bad debt of that scale means MIM holders would recover only a small fraction of the value of their tokens under the wind-down plan. Rather than attempting a restructuring or a fresh capital injection, the proposal opts for outright liquidation, converting the residual collateral to ether before distributing it.

The Snapshot vote is the mechanism through which token holders would signal whether to proceed, putting the decision in the hands of the protocol's governance participants rather than its development team. Snapshot votes are typically used in DeFi to gauge community consensus before any on-chain execution.

Abracadabra is not the first DeFi protocol to confront an insolvent stablecoin or lending book, but the scale of the shortfall relative to remaining assets makes a full shutdown one of the few remaining paths. Details on timing, the mechanics of the collateral swap, and the claims process for MIM holders were not fully laid out in the initial reporting.

What happens next depends on the outcome of the vote. If approved, MIM holders would receive their pro rata share of the converted collateral, formally ending the protocol's operations; if rejected, the team would need to return with an alternative recovery plan against the same $21 million in bad debt.