Yet another DeFi protocol fell victim to hackers. Cover Protocol has been exploited while its native token plunged 80% in minutes.
There has reportedly been yet another DeFi exploit, which resulted in massive declines for its native token. This time, the victim was Cover protocol, and its COVER token crashed by almost 80% on Binance within minutes.
COVER has tanked by almost 80% before recovering to its current trading price. Regardless, the cryptocurrency is still down more than 50% from today’s high.
COVER/BUSD. Source: TradingView
The team behind the protocol has so far failed to provide any explanation for the crash, which seems untypical, to say the least.
However, members of the cryptocurrency community, including influencer Ivan on Tech, have revealed that the protocol has been exploited.
According to another user, what transpired was the following. Someone minted fake tokens, provided liquidity through Balancer, staked the resulting BPT token, and unstaked real COVER tokens. In essence, the hacker has managed to exploit an infinite minting bug on the incentives contract.
This is far from the first exploit in recent months as more and more DeFi projects continue to fall victim to hackers.
As CryptoPotato reported earlier this month, Warp Finance also got exploited through a flash loan attack where the perpetrator made away with $7.7 million.
Additionally, Binance has announced that it will suspend COVER trading following the exploit.
Georgi Georgiev is CryptoPotato's editor-in-chief and seasoned writer with over four years of experience writing about blockchain and cryptocurrencies. Georgi's passion for Bitcoin and cryptocurrencies bloomed in late 2016 and he hasn't looked back since. Crypto’s technological and economic implications are what interest him most, and he has one eye turned to the market whenever he’s not sleeping. Contact George: LinkedIn
