Attacker mints more than 1 quintillion tokens in DeFi Cover Protocol hack
Another day another DeFi project hacked. Cover Protocol, a DeFi insurance project was hacked on Monday in an infinite printing scheme attack, prompting the price of the Cover token to take a huge nosedive.
The attacker cashed out more than $4 million consisting of 1,400 ETH, 1 million DAI, and 90 WBTC. After minting 40 quintillion Cover tokens, the exploiter sold tokens worth $5 million.
Cover protocol claim that it is still investigating the hack. No further details were provided except that people should not buy COVER tokens and remove “liquidity from the COVER/ETH pool on sushiswap.”
The team is still investigating the current incident. The exploit is no longer possible.
The exploit is no longer possible. Please do NOT buy $COVER tokens, and remove your liquidity from the COVER/ETH pool on sushiswap.CLAIM/NOCLAIM balancer pools are unaffected
— Cover Protocol (@CoverProtocol) December 28, 2020
The protocol is also working with individuals and teams within the Yearn Ecosystem to get to the bottom of the hack.
While the details of the hack are still sketchy, Band Protocol CTO Sorawit Suriyakarn studied the exploit and came to the conclusion that the attack involves using storage and memory incorrectly.
“The attack does 4 things: 1. Deposit LP tokens to Blacksmith contract 2. Withdraw *almost* all LP tokens to inflate accRewardsPerToken 3. Deposit LP tokens again (this is the interesting bit) 4. Claim COVER rewards and trick the contract to mint quintillion of $COVER tokens,” explained Suriyakarn.
Attacker returns stolen funds
In an unexpected turn of events, the attacker returned the stoken funds. The hacker, only identified as Grap Finance, returned 4,350 ETH worth over $3.2 million to Cover Protocol.After claiming responsibility for the hack, the attacker sent a message telling Cover Protocol to “take care of your own shit.”
The attacker further added that there was no gain.
Next time, take care of your own shit.@CoverProtocol @chefcoverage https://t.co/ks94ucdoRQ
1. No gains. 2. The Obtained Funds from LP has been returned to COVER.— Grap.finance (@GrapFinance) December 28, 2020
Cryptocurrency exchange Binance suspended Cover trading and deposits to protect its users. The news of the hack saw the Cover token plunge more than 90%.
The Cover token is currently trading at $23.76, down from $879 in the last 24 hours.
[caption id="attachment_21407" align="aligncenter" width="1286"]
The Cover token is down more than 96% in the last 24 hours following an exploit that saw the hacker mint a quintillion Cover tokens | Credit / TradingView[/caption]
A Cover investor claims to have lost $20,000 due to the hack and requested compensation.
Cover Protocol is exploring providing new Cover tokens and is planning to use the 4350 ETH returned by the hacker to compensate LP token holders who fell victim to the security breach.
Hello everyone, we are exploring providing a NEW $COVER token through a snapshot before the minting exploit was abused. The 4350 ETH that has been returned by the attacker will also be handled through a snapshot to the LP token holders.We are still investigating. Do NOT buy COVER
— Cover Protocol (@CoverProtocol) December 28, 2020
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