DeFi project Cover Protocol becomes the latest project to be hacked in the DeFi landscape. The attacker was able to exploit the Blacksmith Farming contract of the project to mint an infinite amount of COVER tokens. The attacker then cashed out the tokens in other cryptocurrencies including Ether, DAI, and WBTC, although later gave all the funds back to the protocol. The price of the COVER token has since crashed approximately by 98% following the news of the attack. The team at Cover Protocol is now looking towards <a href="https://twitter.com/CoverProtocol/status/1343581331448586245" target="_blank" rel="nofollow noopener">launching</a> a new COVER token.
<h2>Cover Protocol Might Launch New Token</h2>
The hackers were able to exploit the DeFi insurance project, tricking the protocol into minting 40 quintillion COVER tokens (currently worth $11,826 quintillion). The development team behind Cover Protocol is still investigating how exactly the hacker exploited its system. Experts are suggesting that the attack appears to be related to a bug in the smart contract due to the incorrect usage of memory and storage.

Following the attack, COVER token’s price plummeted by over 75% to $177 before rebounding to over $240 after the hacker announced on returning the funds.

In recent months, the crypto community has seen several <a href="https://www.cryptoknowmics.com/news/defi-protocol-akropolis-hacked-for-2-million-in-dai-stablecoins/" target="_blank" rel="noopener">hacking attempts</a> within the DeFi landscape. Attackers are usually targeting Defi projects by exploiting vulnerabilities in the technical structure. There also has been a surge in the use of <a href="https://www.cryptoknowmics.com/news/privacy-focused-wasabi-wallet-announces-version-20/" target="_blank" rel="noopener">privacy wallets</a> by hackers to hide stolen crypto assets like <a href="https://www.cryptoknowmics.com/news/bitcoin-sneaks-up-to-30000/" target="_blank" rel="noopener">Bitcoin</a>.
<h2>One of the Attackers Returned All the Liquidated Funds</h2>
One of the attackers was able to mint 40 quintillion COVER tokens (worth about $11,826 quintillion) due to a bug in the protocol’s smart contracts. Hours after the exploit, the attacker returned all the liquidated funds, i.e., about $3 million, back to the protocol.

The hacker first converted the COVER tokens to ETH to return the funds. The attacker then burned the remaining minted COVER tokens, i.e., more than 40 quintillions. To put it simply, the hacker only sold 72,900 COVER tokens using Uniswap and Sushiswap while burned the remaining ones.

One can only speculate now whether the other attackers will also return the liquidated funds and burn the remaining minted tokens.

Hacked DeFi Project Cover Protocol Might Launch New Token

The team at Cover Protocol is now looking towards launching a new COVER token following the hacking attack to mint an infinite amount of COVER tokens.

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

Hacked DeFi Project Cover Protocol Might Launch New Token

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