Abracadabra Spell

Abracadabra Spell remains rejected because it is below the size floor. It tracks collateral locked in isolated Cauldrons across seven nonzero chains, not a MIM liquidity-pool position. Users deposit a market-specific collateral asset and may borrow MIM or add leverage by swapping borrowed MIM into more collateral. Oracles, market parameters, interest, and liquidations govern each claim. DefiLlama measured about $3.92M on 2026-08-16, including $2.05M on Ethereum and $1.71M on Arbitrum. No single passive yield claim spans the total. At 3.92% of the size floor, we will not open an individual review until the protocol clears it, so the version-1 rejection on size applies to all markets.

Review triggers: events that reopen the verdict
• Collateral TVL sustained above the retired TVL threshold for 30 days
• Selects one exact Cauldron and supplies verified version, authority, oracle, debt, liquidation, incident and $1M repay-and-withdraw evidence

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

The research file

Mechanism and scope correction

Abracadabra describes Cauldrons as isolated lending markets where a user locks collateral to borrow MIM. Leverage is optional and separate: the user swaps borrowed MIM into more collateral and deposits it again. The adapter lists collateral tokens and BentoBox or DegenBox balances for each Cauldron. It does not read AMM reserves or LP tokens. The former amm-lp basis and Ethereum-only boundary were therefore wrong for this surveyed record.

Current accounting and chain perimeter

The 2026-08-16 API showed $3.92M of collateral across Avalanche, Blast, BSC, Ethereum, Fantom, Arbitrum, and Kava. Optimism was configured but had zero collateral, so it is excluded from the current nonzero boundary. TVL is locked collateral, not available MIM, borrowed MIM, or cash available for withdrawal. An advised position would have to name one exact Cauldron, collateral, and debt state instead of treating the total protocol balance as usable liquidity.

Control, loss and lifecycle applicability

Cauldron owners or authorized operators can change borrow limits and interest, retire markets, reduce MIM supply, and set fee or blacklist controls, depending on the version. Each market depends on its collateral oracle, minimum collateral ratio, and liquidation path. The adapter records UST, 0xSifu, and FTX-related hallmarks. Current documentation and the multi-chain adapter show an active protocol with varied markets, not one historic LP pool.

Comparison and measurable reopening test

Unlike supplying USDC to a named Aave reserve, depositing collateral in a Cauldron does not itself create a passive lender claim. The client keeps the collateral risk and may add MIM debt or recursive leverage. The protocol is below the size floor, no stronger shared class accurately describes every Cauldron, and only $3.92M is observed. We will not open an individual review until supplied collateral clears the size floor for 30 days. We will then select one market and verify the contract version, roles, oracle, debt, liquidation, incidents, and a $1M repay-and-withdraw simulation.

Research status

This is a capacity-unproven record for Abracadabra Spell, not a quality rejection or approval. Reported TVL says how big the venue is, not what the client owns, who can change the rules, or how a position exits at a proposed size. The individual review opens when the protocol clears the size floor.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Abracadabra Docs — Cauldron lending and leverage · primary · accessed 2026-08-16
  Supports: isolated market, collateral, MIM borrowing, optional leverage, liquidation
• Abracadabra Docs — borrow, repay and close flow · primary · accessed 2026-08-16
  Supports: market selection, LTV and MCR, MIM debt, repay, collateral withdrawal
• Abracadabra Developer Docs — architecture and authorities · primary · accessed 2026-08-16
  Supports: DegenBox, Cauldron clones, oracles, CauldronOwner operators, multi-chain fees
• Abracadabra Developer Docs — Cauldron V4 controls · primary · accessed 2026-08-16
  Supports: liquidation, owner fee controls, blacklisted callees, supply reduction
• DefiLlama adapter — Abracadabra collateral accounting · secondary · accessed 2026-08-16
  Supports: Cauldron collateral, BentoBox balances, configured chains, hallmarks, not LP accounting
• DefiLlama — Abracadabra Spell survey record · secondary · accessed 2026-08-16
  Supports: $3.92M TVL, seven nonzero chains, CDP category, current lifecycle

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.