Abracadabra Faces Third Hack, $1.8 Million Loss, and Contract Pause

Abracadabra, a DeFi protocol, has suffered its third major hack since 2024, resulting in a $1.8 million loss. The attack exploited MIM tokens and used multiple addresses to breach the protocol's smart contracts. The hack highlights ongoing security challenges in DeFi, impacting market trust and prompting urgent protocol responses to mitigate investor losses. Abracadabra needs to bolster risk controls and enhance communications to navigate continuous vulnerabilities.

Abracadabra, a prominent DeFi lending protocol, has once again fallen victim to a significant security breach. The latest hack, which occurred late Saturday night, resulted in the loss of nearly $1.8 million worth of Magic Internet Money (MIM) stablecoins. This incident marks the third major security exploit targeting the protocol since the beginning of 2024, with cumulative losses exceeding $21 million Abracadabra loses $1.8 million in protocol's third major DeFi hack since 2024^[1].

The attack leveraged a vulnerability in one of Abracadabra's smart contracts, allowing an unknown threat actor to bypass solvency checks and extract 1.79 million MIM tokens. The attacker initially funded their operations using Tornado Cash, a protocol known for its privacy features, and subsequently swapped the tokens for ETH before returning the funds to Tornado Cash Abracadabra loses $1.8 million in protocol’s third major DeFi hack since 2024^[2].

Abracadabra's decentralized autonomous organization (DAO) swiftly responded to the incident. A DAO contributor, 0xMerlin, reported that the issue had been identified and mitigated, with the affected MIM tokens bought back from the market using DAO treasury funds. No user funds were affected, according to the protocol's official statement on its Discord server Abracadabra loses $1.8 million in protocol's third major DeFi hack since 2024^[1].

The latest hack underscores the ongoing security challenges in the DeFi space. Abracadabra's cumulative losses since 2024, totaling over $21 million, highlight the urgency for the protocol to strengthen its risk controls and enhance communication strategies to mitigate investor losses and restore market trust Abracadabra loses $1.8 million in protocol's third major DeFi hack since 2024^[1]. The protocol's total value locked (TVL) stands at $154 million, with most of the MIM tokens trading on Ethereum and its Layer 2 network, Arbitrum Abracadabra loses $1.8 million in protocol’s third major DeFi hack since 2024^[2].