Key Points
- •Abracadabra Money loses $1.8 million in third exploit of 2025, highlighting smart contract vulnerabilities.
- •DAO Treasury initiates buybacks of stolen Magic Internet Money.
- •Total Value Locked remains at $154 million post-incident.
Abracadabra Money, a decentralized finance protocol, lost $1.8 million on October 4, 2025, due to a smart contract vulnerability, marking its third major exploit.
The incident underscores ongoing security concerns within DeFi, impacting Abracadabra's Magic Internet Money and highlighting systemic risks that may affect market confidence and governance.
Abracadabra Money, a major DeFi lending protocol, experienced its third exploit since 2024, with attackers siphoning off $1.8 million. The breach occurred on October 4, 2025, and involved vulnerabilities in the smart contract's solvency checks, further testing DeFi security.
“The exploit in the 'Cook function' allowed an attacker to bypass solvency validations and drain funds.” – Daniele Sesta, Founder, Abracadabra Money (source)
The hackers exploited Magic Internet Money (MIM), impacting liquidity and revealing systemic risks within the decentralized finance sector. Despite no public statements from founder Daniele Sesta, DAO Treasury is actively repurchasing affected tokens, aiming for market stability.
Amid the exploit, on-chain data indicates Abracadabra maintains a Total Value Locked of $154 million, reflecting a modest decrease. While MIM market volume declined by 16.98%, there were no major outflows from staked positions in the protocol. This underscores the significance of robust DeFi governance. Despite three significant hacks, no mass staking withdrawals occurred, and affected tokens were processed using Tornado Cash mixers, indicating laundering efforts.
The exploit underscores the importance of enhanced security audits and checks to safeguard against recurrent breaches. Lessons from similar incidents in January 2024 and March 2025 call for improvements in smart contract integrity. In light of the breach, Abracadabra's experience brings to focus the ongoing necessity for efficient governance and technology-driven solutions within DeFi. Stakeholders prioritize buybacks to restore confidence in the stability of the protocol's ecosystem.