Abracadabra Calls On Sushi Swap As A Faulty Oracle Threatens $10 Million
SushiSwap has been asked by the community of Abracadabra, a crypto lending protocol and issuer of the MIM stablecoin, to make changes to two of its Bento vaults holding $10 million in Abacadbra users’ assets that could be at risk.
On November 26, Abracadabra posted an “Emergency Proposal” to Sushi’s governance forum, requesting that the Sushi team raise interest rates on two Bento vault “cauldrons” containing $10 million in RenCrv and ETH tokens.
“It has come to our attention that two collateral positions on Sushi’s Bentobox infrastructure are at risk,” according to the post. “A faulty oracle poses a threat to users who have open positions in the yvcrvstETH cauldrons.” For RenCrv, the recent developments regarding the deprecation of Ren Bridge v1 leave us unsure of the best way forward with this type of collateral.
Because Abracadabra’s lending infrastructure is built on Sushi‘s Bentobox protocol, any changes to interest rates must be approved by the multi-signature contract that governs Bentobox.
“The Abracadabra design has no power to forcefully close an open position for any reason,” according to the post. “However, we can raise the interest rate to incentivize users to do so, which means that these users will pay the protocol for the risk exposure their position creates.”
SushiSwap responded the next day, with head chef Jared Grey stating on the project’s Discord that Sushi will proceed with the interest rate changes. The fees generated by the two cauldrons will be split 35% between xSushi token holders.
Both tokens are not used on SushiSwap, according to Abracadabra, with RenCrv being a token wrapper designed specifically for Abracadabra and ETH being an interest-bearing token issued by yield aggregator Yearn Finance.
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