Lending Protocol Abracadabra Hit By $6.5M Exploit

DeFi lending protocol Abracadabra has been exploited to the tune of $6.5M.

According to the team, the attacker targeted specific V3 and V4 cauldrons on Ethereum to take out unauthorized MIM loans. The borrowed MIM was then swapped for ETH, according to security firm Peckshield, which first flagged the exploit.

Borrowing limits on the affected cauldrons have been set to zero to prevent further losses. The Abracadabra team has sent an onchain message to the exploiter’s address in the hope of recovering the stolen assets in exchange for a bounty.

Abracadabra is a collateralized debt protocol that allows users to borrow MIM, its native stablecoin, against various crypto assets. Its cauldrons operate similarly to Maker’s vaults.

With MIM trading well under its $1 peg, the team has committed to deploying the protocol’s treasury to buy and burn the stablecoin in a bid to restore its peg. MIM has a market capitalization of around $55M.

Abracadabra is working with blockchain analytics firm Chainalysis to track the flow of the stolen assets.

This is a developing story.