Despite its turbulent beginnings, COVER has gained some serious hype in recent months. What began as “SAFE” eventually became COVER after some controversial fights between the early developers.
COVER was eventually adopted by the Yearn.finance ecosystem and grew under the guidance of Yearn founder Andre Cronje. It secured a coveted Binance listing early on and saw a massive upward trend.
However, the promising growth dissipated overnight, and a deadly coin function caused the price of the cryptocurrency to fall towards zero and liquidity all but dissolved.
The lack of liquidity and the fact that several different parties took advantage of this feature drove the price towards zero. Although it has bounced back from its lows, its limited liquidity at Uniswap and other AMMs makes it nearly non-tradable for those looking to buy or sell with size.
The biggest exploiter was able to cash out around $ 3.2 million before liquidity ran out, causing it to burn the remaining tokens it won overnight.
Another exploiter returned the tokens it had taken, but the damage done to the token was catastrophic and the COVER team warned users against buying the tokens.
COVER price collapses after exploiting deadly coin function
Overnight, while the COVER development team slept, some malicious hackers discovered a way to mint essentially infinite tokens so they could clear the pools of liquidity and put endless selling pressure on the token.
This caused the price to drop from weekly highs before exploiting over $ 1,000 to lows of nearly $ 40 at Uniswap before finding some pressure on the buy side.
At the time of writing, it is currently 75% off its current price of $ 217. Although it has bounced back from its lows, the lack of liquidity and uncertainty about the token’s future make it a highly speculative game for traders.
Hackers who got away with millions via the exploit
Several parties were involved in the COVER exploit overnight, with one group of white hat hackers returning the funds they had taken while others cleaned up the liquidity pools before burning the rest of the tokens.
Speaking about this exploit, an analyst stated that nefarious users could stake, stake and claim their tokens and continue to do so on retries.
“COVER used: tl; dr infinite coin error on their incentive contract. Stake> Stake + Claim> Re-Stake> Repeat. “
The same analyst added that this exploit did not affect the COVER protocol, only the price of the token.
“Just to be clear, this doesn’t affect the protocol (which works perfectly), the exploit only affects the COVER price.”
The future of the token is currently unclear, but the COVER team has since patched the exploit.
Featured image from Unsplash.
