Peer-to-Peer Cover Market Cover Protocol has released a compensation plan for token holders and liquidity providers affected by the recent hack. As part of the process, the Cover Protocol team took a snapshot at block height 11,541,218, the last block of transactions before the exploit began.
Eligible liquidity providers for Uniswap, SushiSwap and Balancer will receive new COVER tokens based on their share of the liquidity pool on these platforms. Liquidity providers on the first two platforms also receive a portion of the Ether (ETH) returned by “white hat” criminals like Grap.Finance.
The compensation plan also revealed that prior to the hack, token holders would receive new COVER coins on a one-to-one basis with their initial wallet balance. Regarding the reimbursement of coins held on central exchanges, the coverage record stated:
“We are working with centralized exchanges to reward users who had $ COVER on their balance on the above block number with the new $ COVER token (1: 1).”
In the meantime, Binance will reward customers whose COVER tokens have become worthless after the exploit on Monday. When announcing the plan on Thursday, Binance announced that the $ 10 million compensation will come from the platform’s SAFU fund, which is split between Binance USD (BUSD) and Ether.
According to the exchange, the decision was made based on the fact that the majority of the Binance users affected by the hack were not included in the coverage compensation plan. Binance promised to reimburse around 8.17 million BUSD and 2,581.16 ETH for a total of around 10.1 million USD.
As previously reported by Cointelegraph, the Cover Protocol suffered an infinite coin attack that triggered a drop in prices. Several companies exploited the vulnerability, with the first attacker reportedly consuming more than $ 4 million from the log.
In their report on the hack, the Cover Protocol team revealed that they were monitoring the address of the first attacker as well as other participants in the exploit.
The spate of successful attacks on decentralized finance projects in 2020 remains a cause for concern. While cryptocurrency decreased during the year, the DeFi room contributed to more than half of all thefts and hacks in the second half of the year.