COVER has gotten some serious hype in recent months, despite its turbulent beginnings. What started as “SAFE” eventually became COVER after some controversial battles between the early developers.
COVER was eventually acquired by the Yearn.finance ecosystem and grew under the guidance of Yearn founder Andre Cronje. It achieved a coveted Binance listing early on and saw a huge advantage.
However, the promising growth resolved overnight, with a deadly coin feature causing the cryptocurrency’s price to plummet to zero, nearly removing liquidity.
The lack of liquidity and the fact that several different parties are exploiting this function drove the price to zero. While it has rebounded from its lows, the limited liquidity on Uniswap and other SMPs makes it almost unmanageable for those looking to buy or sell at a large size.
The biggest exploiter was able to cash out about $ 3.2 million before the liquidity dried up, burning the remaining tokens they earned overnight.
Another exploiter returned the tokens they took, but the damage to the token has been disastrous, and the COVER team has warned users not to buy tokens.
COVER Price collapses after lethal exploitation of coin function
Overnight while the COVER development team slept, a few malicious hackers discovered a way to strike essentially infinite tokens, allowing them to clean up the liquidity pools and put endless selling pressure on the token.
This caused the price to plummet from pre-exploit weekly highs of over $ 1,000 to lows of nearly $ 40 on Uniswap before it found any pressure on the buy side.
At the time of writing, it is currently trading 75% down at the current price of $ 217. While it has rebounded from its lows, the lack of liquidity and uncertainty about the token’s future makes it a highly speculative game for traders.
Hackers won by the millions through the exploit
Multiple parties were involved in the overnight COVER exploit, with one group of white hat hackers returning the money they had taken, while others cleaned up the liquidity pools before burning the rest of the tokens.
An analyst talked about this exploit, which explains that nefarious users could wager, undo, and claim their tokens, and continue to do so over and over.
COVER exploited: tl; dr infinite minting bug on their incentives contract. Stake> unstake + claim> re-stake> repeat. “
The same analyst added that this exploit did not affect the COVER protocol, only the price of the token.
“To be clear, this does not affect the protocol (which works perfectly), the exploit only affects the COVER price.”
The future of the token remains unclear at this point, but the COVER team has since patched the exploit.
Featured image from Unsplash.