Abracadabra
About
Abracadabra is an omnichain DeFi lending platform that enables users to mint the Magic Internet Money (MIM) stablecoin using interest-bearing tokens as collateral. The platform allows borrowers to access liquidity while their collateral continues to earn underlying yield. It also provides staking strategies that transform non-yielding assets into yield-generating Magic Tokens across multiple blockchain networks.
Where Does Yield Come From?
Abracadabra is a lending platform that works across multiple blockchains. Its main product lets you borrow its stablecoin, called MIM, by using interest-earning tokens as collateral in separate lending markets (called Cauldrons). The important part: your collateral keeps earning its usual yield even while you have the loan, so you get both the borrowed funds and the ongoing yield.
The platform earns revenue from three types of fees:
- A one-time mint fee (a percentage of the borrowed amount that gets added to your debt).
- Ongoing interest fees on the MIM you borrow.
- Liquidation fees if a loan is closed. In certain markets, 10% of these liquidation fees go to a special SPELL fee pool.
This revenue is shared with people who stake the protocol's SPELL token. There are two main staking contracts:
- sSPELL: You earn more SPELL tokens.
- mSPELL: You earn stablecoin income paid in MIM.
According to the governance proposal AIP #10, half of the protocol's revenue is used either to buy back SPELL tokens or to distribute through mSPELL staking. The other half is kept to build up the protocol's treasury.
Besides borrowing, there are other ways to earn yield on Abracadabra:
- Magic Tokens: These wrap assets that don't normally earn yield (like GLP, APE, LVL, KLP) into versions that do earn yield, using built-in strategies.
- Providing liquidity: You can add funds to MIM trading pools and receive SPELL token rewards as an incentive.
Finally, the protocol releases new SPELL tokens every week. These emissions are used to encourage people to provide liquidity for specific trading pairs and to participate in governance through bribe systems. How many tokens are released and where they go is decided by the DAO's governance proposals.
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
Guardian Audits26-10-2023 - 07-11-2023 |
| The audit uncovered critical vulnerabilities in deposit logic and liquidation prevention that were fully resolved before deployment, while several medium-risk design considerations around oracle usage and GM token collateral were acknowledged for future monitoring. |
Guardian Audits29-01-2024 - 01-02-2024 |
| The audit uncovered one high-severity economic issue and several medium-risk vulnerabilities, all of which were resolved before deployment, indicating a thorough security review and effective remediation process for the staking contract. |
Guardian29-02-2024 - 11-03-2024 |
| The audit identified several high and medium severity issues, most of which were resolved before the final report, though some design considerations remain acknowledged by the team. Overall security posture improved through comprehensive fuzzing and manual review, but residual risks in configuration and edge cases warrant ongoing attention. |
Guardian14-11-2024 - 18-11-2024 |
| The audit found one High severity issue that was promptly resolved, along with numerous Low severity issues mostly addressing code quality and configuration concerns. After remediation, Guardian believes the protocol upholds its intended functionality and security standards. |
| The audit found no critical or high severity issues, with medium findings relating to reward distribution fairness and user workflow edge cases that appear manageable with regular harvests and proper frontend implementation. |
Legal
Status and notes
Website footer: "© 2024 Abracadabra Network, All Rights Reserved". Protocol described as "Abracadabra DAO Ecosystem" with governance via SPELL token holders (snapshot voting, forum). No disclosed legal entity, incorporation, or registration jurisdiction on official sources. Contact: [email protected].