Attackers Drain Millions From Cover Protocol, Token Holders Attack Compensation Plan

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Decentralized financial insurance project The coverage protocol suffered brief losses when an unknown attacker struck over 40 trillion coverage tokens. After the attacker successfully paid out tokens valued at around USD 5 million, he unexpectedly returned Ether tokens worth around USD 3.2 million before leaving a message for the cover team.

No longer possible to use

In the immediate aftermath of the attack, the insurance log token’s value dropped over 94% to $ 34 at the time of writing. After the incident tThe cover team immediately confirmed the attack and warned investors not to buy the token while the investigation was ongoing. The team also asked the attackers to return the rest of the stolen money.

However, in their December 28 statement, the team tries to reassure investors that the vulnerabilities exploited by attackers have been fixed. The team says:

The exploit is no longer possible. Please do not buy cover tokens and remove your liquidity from the cover / ETH pool on Sushiswap. Claim / No Claim balancer pools are not affected.

Compensation controversy

In addition, the cover team announced a compensation plan based on the snapshot that will be “added to block 11541218, one block before the first major mined coin”. Even so, the compensation plan appears to have sparked controversy for the project. Some token holders are now accusing the cover team of being dishonest.

For example, in a response to Cover’s compensation plan, a Twitter user named Phil argues:

You should take a snapshot from the moment you announced on Twitter that the contract was being used. Cover Protocol. Lots of people didn’t know what happened! They thought it was just a big jump! Binance announced earlier what happened … Unbelievable!

Another user, Kyouraku Shunsui, asks “wInvestors are accused of being late for the team. “The user requests a change to the” snapshot time “. D.Despite the complaints, the cover team seems to be proceeding as planned.

What do you think of the cover attack? Let us know what you think in the comments section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

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