Is Abracadabra Safe?
Risk Grade: D+ (62/100)
Abracadabra is rated as high risk — extreme novelty, critical interactions, unproven at scale.
High risk — three exploits in two years and a stablecoin that repeatedly breaks its peg demonstrate systemic smart contract quality issues
A lending platform where users deposit crypto to borrow the MIM stablecoin. It holds $11M in deposits, down significantly from peak levels after three separate hacks since January 2024 totaling over $21M in losses. Its D+ grade reflects the pattern of recurring smart contract vulnerabilities and a stablecoin that dropped to $0.76 during one incident.
TVL
$8M
Mechanisms
7
Interactions
6
Value Grade
C
Key Risks for Abracadabra Users
Three separate hacks since January 2024 stole a combined $21M+ from the protocol. The same type of vulnerability in the batch transaction system (cook() function) was exploited twice.
The MIM stablecoin crashed to $0.76 during the January 2024 exploit. If another hack occurs, MIM holders could lose 20% or more overnight.
Collateral depends on external protocols like GMX and Yearn. If those protocols are exploited, Abracadabra's Cauldrons inherit the losses as bad debt.
Top Risk Factors
- •Three major exploits in under two years ($6.5M Jan 2024, $13M Mar 2025, $1.8M Oct 2025) demonstrate a pattern of recurring smart contract vulnerabilities in the Cauldron architecture.
- •MIM stablecoin depegged to $0.76 during the January 2024 exploit, showing that the peg mechanism cannot withstand protocol-level shocks.
- •The cook() multi-action batch function has been exploited twice via action-sequencing vulnerabilities that bypass solvency checks, and the general pattern may have additional undiscovered variants.
How Abracadabra Compares to Peers
Abracadabra ranks #89 of 90 Lending protocols (bottom quartile — among the riskiest). At a risk score of 62/100, it's 25 points riskier than the sector average of 37/100.
Adjacent peers: Radiant Capital (D+, 61/100) is ranked just safer, and Tapioca (D+, 65/100) is ranked just riskier.
See the full Lending sector leaderboard or the Abracadabra vs Radiant Capital comparison.
Common Questions about Abracadabra
Plain-English answers based on Abracadabra's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Interaction Severity (20/20).
Has Abracadabra ever been hacked or exploited?
Abracadabra has a documented incident history that materially raised its risk grade — the track record dimension scored 15/15, near the high end of the scale. Past exploits, governance failures, or contract issues are baked into this rating. Anyone considering deposits should review the incident details before allocating capital.
How much money is at stake in Abracadabra?
Abracadabra currently holds under $8M in user deposits — small enough that liquidity events could affect exits. Smaller TVL means individual depositors carry a larger share of any loss event, and it can be harder to exit a position quickly during stress.
What's the worst-case scenario for Abracadabra?
Hindenrank has identified specific collapse scenarios for Abracadabra. The most prominent: "Cook() Solvency Bypass Cascade". The trigger condition is Attacker discovers a new action-sequencing combination in cook() that bypasses solvency checks on a Cauldron with $5M+ TVL, replicating the October 2025 pattern. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Abracadabra regulated or insured?
Abracadabra has low regulatory exposure on Hindenrank's framework (2/10). The protocol is structured in a way that minimizes counterparty and jurisdiction concentration, though regulatory risk in crypto can change rapidly. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Abracadabra?
Hindenrank's retail-focused risk audit flagged: Three separate hacks since January 2024 stole a combined $21M+ from the protocol. The same type of vulnerability in the batch transaction system (cook() function) was exploited twice. The MIM stablecoin crashed to $0.76 during the January 2024 exploit. If another hack occurs, MIM holders could lose 20% or more overnight. Collateral depends on external protocols like GMX and Yearn. If those protocols are exploited, Abracadabra's Cauldrons inherit the losses as bad debt. On the technical side, 2 critical-severity interaction risks have been identified.
Should beginners deposit into Abracadabra?
Abracadabra carries a D+ grade — among the riskiest protocols in Hindenrank's coverage. Beginners should not deposit here. Anyone considering a position should understand they may lose everything they put in, and should size accordingly.
How does Abracadabra compare to safer Lending alternatives?
Abracadabra is one protocol in Hindenrank's Lending coverage. The safest Lending protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Abracadabra against the full Lending ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Abracadabra risk report.
Read the Full Abracadabra Risk Report
This protocol has 2 collapse scenarios. 2 critical and 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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