Abracadabra Money

Organization Name – Abracadabra Money

Category – Banking & DeFi

About

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Abracadabra.money is an omnichain lending protocol that enables users to collateralize interest‑bearing tokens—often illiquid yield farming receipts like Yearn and xSUSHI—in order to mint a USD�…��pegged stablecoin called Magic Internet Money (MIM). These ibTKNs accumulate value over time, and by depositing them a user both retains yield and unlocks liquidity via MIM loans. The core architecture is built atop modular vault infrastructure: the DegenBox (a variant of BentoBox) and isolated lending markets known as Cauldrons, each cloned per collateral type with independently configurable LTV, borrow and liquidation fees, and interest parameters. When a borrower deposits collateral into a Cauldron, MIM is minted by the protocol and stored within the shared DegenBox vault until the user actually borrows. Cauldrons support atomic multi‑step transactions—such as deposit, collateralize, borrow, and leverage—saving gas and improving user experience. Governance and incentives center around the SPELL token: fresh borrow fees (0.5 %) and 10 % of liquidation fees accrue to a fee‑sharing pool where stakers hold sSPELL or mSPELL. SPELL holders stake to receive voting rights and a share of protocol revenue, and tokens are distributed via farming (63 %), team allocation (30 %), and an initial IDO (7 %). The protocol pledges that 75 % of revenue buys back SPELL on secondary markets, while the remaining 25 % builds long‑term protocol treasury. Launched in May 2021 by Daniele Sestagalli and an anonymous cofounder known as “Squirrel,” Abracadabra expanded rapidly across chains including Ethereum, Fantom, Arbitrum, Avalanche, and Binance Smart Chain. In March 2024, MIMSwap—the protocol’s stableswap and liquidity aggregator—was rolled out to support LP staking and locking features. In July 2024 Abracadabra onboarded stdeUSD from the Elixir ecosystem as a new collateral type via a governance‑approved cauldron, broadening collateral options beyond ibTKNs. Despite its technical prowess, the platform has experienced significant security events: a $6.4 M exploit in January 2024 targeted Ethereum cauldrons causing MIM de‑pegging, followed by a larger $13 M breach in March 2025 involving GMX‑linked pools, prompting scrutiny over risk management. Nonetheless, the team reacted via community communications and treasury intervention. Alongside risk mitigation, innovation continued: governance proposals in mid‑2025 explore a new utility token called ABRA, designed to unlock high‑risk, yield‑heavy vaults with built‑in deflation mechanics and burn fees allocated to both SPELL buyback and treasury support. Abracadabra’s appeal lies in its ability to unlock layered yield: users collateralize yield‑generating assets to borrow MIM, redeposit to re‑earn interest, or deploy it across other DeFi strategies. Its modular Cauldron infrastructure offers granular risk control per asset, while omnichain reach increases liquidity and composability. Revenue is generated from borrow and liquidation fees, with sSPELL holders benefitting from protocol income, reinforcing long‑term stakeholder alignment. The protocol’s roadmap includes expanding collateral options (e.g. ecosystem tokens like stdeUSD), deploying structured yield products via ABRA pilot vaults, and extending omnichain coverage through bridges and integrations. Robust on‑chain documentation and developer tooling enable transparency: contract addresses, treasury multisigs across L2s, DegenBox implementation details and oracle configurations are all published. While security events highlight vulnerability in DeFi, Abracadabra continues refining risk frameworks and diversifying collateral types. Its unique value proposition rests on transforming illiquid yield assets into liquid capital, stacking returns, and offering community‑governed infrastructure that retains users’ upside through token‑linked revenue sharing. Compared to older stablecoin models which lock protocol yield to centralized issuers, Abracadabra flips the model: users gain liquidity and yield while contributing to protocol revenues that benefit token stakers—merging capital efficiency, composability, and community governance into a layered, multi‑chain lending primitive. As of mid‑2025 TVL remains significant across markets, with ongoing strategic proposals and innovation, marking Abracadabra as a DeFi protocol that continues evolving its meta at the intersection of lending, yield stacking, and community ownership. Read More