COVER Hack: Cover Protocol and Binance Announce Compensation Plan for Hack Victims

Cover Protocol, a Defi insurance protocol was recently exploited by a white hat hacker minting an infinite amount of the COVER protocol token owing to an infinite minting bug. The hacker later sold a portion of the Cover protocol token for 4350 ETH worth $3 million and burnt the rest of the tokens, he also returned the funds generated via the sale of the token back to the deployer.

COVER Protocol to Distribute ETH Among Affected Traders

The Cover protocol has now come up with a compensation plan to refurbish those who were impacted by the exploit a couple of days ago. The team behind the defi insurance protocol released a medium post informing traders that the refurbishment plans would be based on the snapshot of block 11541218 which is the block before the first exploit took place.

The traders who would be eligible for the new COVER token include,

• COVER-ETH liquidity providers on Uniswap
• COVER-ETH liquidity providers on SushiSwap
• COVER-ETH liquidity providers on Balancer
• All $COVER token holders (holding in wallet + CEXs)
• All $YETI token holders
• All $YPIE token holders
• All unmigrated SAFE2
• All unmigrated SAFE

The firm in its official compensation plan said,

We will use the snapshot to calculate each user’s ownership percentage of all outstanding COVER-ETH LP tokens and distribute the ETH proportionally. We have received a total of 4,441.8 (4,350 + 1 + 90.8) ETH. The final distribution will be the total amount of ETH returned by exploiters to the dev multi-sig.

Binance Announces $10 Million Cover Token Compensation Plan

Binance, one of the leading crypto exchanges in the current market has decided to compensate affected COVER token holders from its SAFU Funds. The CEO of the exchange Changpeng Zhao took to Twitter to inform the customers that they would initiate a $10 million compensation plan powering to the Cover exploit.

#Binance will utilize the Binance
#SAFU Fund

to recompense a total of $10,107,505 USD (distributed in 8,171,634.10 BUSD and 2,581.16 ETH) to affected and eligible users.

Short thread… https://t.co/gBc9Z4KC6d

— CZ Binance (@cz_binance) December 31, 2020

CZ also noted that the decision was purely community-centered as the project creators informed them that they would not be able to compensate everyone. CZ wrote.

“The COVER smart contract got hacked. A lot of users lost A LOT of money. The project team says they can’t cover the losses. We made a simple decision, we use our funds to cover the losses of our users. $10 million bucks. Stay #SAFU.”

The post COVER Hack: Cover Protocol and Binance Announce Compensation Plan for Hack Victims appeared first on Coingape.