Abracadabra, the DeFi project behind the long-depegged Magic Internet Money stablecoin, has approved a plan to wind down the protocol after a second governance vote succeeded with a sharply reduced quorum requirement.

The proposal passed after the effective threshold was cut from 3 billion SPELL to 300 million SPELL, a level the source article says was worth about $26,000. The final vote drew 396 million SPELL in support.

Second shutdown vote succeeds

The approved measure sets out an “orderly wind down” for Abracadabra. It follows an earlier late-September attempt to shut down the protocol that became contentious and did not go through under the original governance requirements.

The second vote cleared only after the quorum bar was lowered by 90%, from 3 billion to 300 million SPELL. With 396 million votes, the proposal was able to pass on its second try.

A fast reversal from prior plans

The decision marks a sharp shift from the DAO’s direction just a few months earlier. Less than four months before the shutdown vote, Abracadabra’s DAO had approved what it called a “strategic transition of stewardship.”

That earlier move said it would “revitalize Abracadabra” and create a roadmap for the long-term success of SPELL and the broader platform. The source article says the stewardship team later claimed it had “worked effortlessly” to improve the project before the shutdown proposal emerged.

MIM backing and proposed recovery

The wind-down proposal valued the “actionable backing” behind MIM at around $900,000 against a supply of 22 million tokens. On that basis, it proposed that MIM holders recover about four cents on the dollar.

Abracadabra’s MIM has been long depegged, and the proposal framed an organized shutdown as preferable to a more disorderly outcome. It specifically warned of the “risk of facing users enforcing a liquidation via legal actions,” arguing that such a route would be more costly for stakeholders.

Criticism over missing disclosures

According to the source article, the proposal did not address unexplained outflows of almost $9 million in June and July. That omission became part of the controversy surrounding the effort to close the protocol.

The first shutdown attempt had already drawn criticism, including accusations of “treasury looting,” before the second vote was held under the lower quorum requirement. The article does not report any further explanation for the outflows beyond noting they were not mentioned in the proposal.

What comes next

With the DAO now having approved the wind-down, the next confirmed step is the protocol’s planned orderly closure under the terms of the passed proposal.

Based on the approved framework described in the source article, the key figures guiding that process are the estimated $900,000 in actionable backing, MIM’s 22 million supply, and the proposed recovery value of four cents on the dollar for holders.

Source: protos.com