Most MIM loans on Ethereum have no one to repay them

01 · The crashMIM loses its dollar

MIM, short for Magic Internet Money, is Abracadabra's stablecoin. You mint it by borrowing against crypto in one of Abracadabra's lending markets, which it calls cauldrons. Each MIM is meant to be worth a dollar, because each one is backed by a loan and the collateral behind it.

MIM held its dollar through May. It slipped on June 12, came back for a few days, and broke for good on June 24. By the end of June it traded at 16 cents, and in late September at about 7 cents. Crypto Times reported that heavy selling met thin trading, with no sign of a hack. Our data fits that. No MIM was minted or burned on Ethereum in June, so the fall came from selling.

02 · The fixHigher rates, more debt

Abracadabra said it would raise rates on all its markets, old ones too, so that people would pay back their loans and less of it would be out there. On Ethereum it changed the rate on 13 markets on June 25. The rises were small.

The debt did not shrink. Its Ethereum books recorded 33.9 million at the end of May and 34.7 million in late September. Most of the debt has no one who will pay it, and interest kept adding to it.

03 · Who owes itFour kinds of debt

We read every Ethereum market that records more than a thousand in debt, straight from the contract, and worked out who owes each one.

04 · Left behindThe 2024 move

In March 2024, the lender moved its old markets off Sushi's BentoBox, the shared vault they used, and onto its own DegenBox. It set up a new market for each old one. On March 30 it took the backing out of the old ones, put it into the new ones and copied each loan across, amount for amount.

The people who had borrowed carried on in the new ones, and most have since paid back. The old markets were never cleared. They still say the same loans are owed, with nothing behind them.

One old entry even grew by 0.9 million over the summer, when a single call to it booked interest on paper. The lender made the same kind of move with two markets in December 2022, and those old entries have since been cleared.

05 · The attackerLoans from the January 2024 hack

On January 30, 2024, an attacker used a rounding flaw to borrow MIM from two markets with almost no backing, as reported at the time. The loans that attack opened are still on the books. They record 7.4 million against backing worth about 42,000. In June, the lender raised the rate on both from zero to 1% per year, so this debt now grows too.

06 · What is realAbout 2.8 million

Take out the left-behind entries and the attacker, and 2.8 million MIM is owed by real borrowers. Most of that is short of backing, mainly loans from the 2024 copies whose tokens have lost value. Fewer than fifty borrowers owe more than a thousand MIM each.

They did respond to the crash, a few hundred wallets of them, and they are the only ones who did.

07 · Why it mattersA book twelve times too big

Anyone who adds up what these books record gets 34.7 million. The real book is about a twelfth of that. Rate rises cannot shrink the rest, because no one is left to respond to them.

Our own study of Ethereum lending since 2021 counted the left-behind entries as loans. They are far too small to change any figure in it, and we now leave them out. Old Abracadabra markets also turn up in our piece on price feeds that stopped tracking the market.

08 · How we measuredWhat we counted, and what we left out

We replayed every loan, payment and deposit on them from their on-chain events, and checked each market's debt against its contract as of September 22, 2026. They matched in every case. We valued the backing at each market's own last price, and traced the 2024 move through the vault's records and the token moves in those calls.

MIM prices come from trades on Ethereum. We measured Ethereum only. The lender also lends on other chains, and we did not count those.

09 · The recordThe contracts behind the numbers