Cover Protocol May Launch New Token Following Attack
Cover Protocol announced it’s exploring launching a new COVER token after its current one was abused in a minting attack by a “white hat” hacker on Monday morning.
Cover Protocol announced it’s exploring launching a new COVER token through a snapshot after its current one was abused in a minting attack by a “white hat” hacker on Monday morning.
The hacker, which could be an individual or a small group, claimed responsibility for an exploit in the decentralized finance (DeFi) insurance project, tricking the protocol into minting 40 quintillion COVER tokens. The hacker cashed out the tokens in other cryptocurrencies including ether, DAI and WBTC but later gave all the funds back to the protocol.
"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," according to the project's Twitter account urging its users not to buy any COVER tokens now.
Read more: Who Insures the Insurer? Cover Protocol Attack Exposes DeFi’s Promise and Peril
The development team behind Cover Protocol, which recently merged with Yearn Finance, is still investigating how exactly the hacker exploited its system. Sorawit Suriyakarn, chief technology officer at Band Protocol, said the attack appears to be related to a bug in the smart contract, where memory and storage were used incorrectly.
COVER token's price has been on a wild ride over the last day, plummeting by over 75% to $177 on news of the hack before partially rebounding to over $240 after the hacker announced they'd returned the funds.
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Digital assets posted a third consecutive quarter of losses in Q2 2026, the longest losing streak since the 2022 bear market, as institutional capital rotated into AI equities and Bitcoin ETFs recorded their largest quarterly outflow since launch. Our report examines what drove the divergence, where structural adoption continued regardless, and what Q3 signals to watch.
Digital assets posted a third consecutive quarter of losses in Q2 2026, the longest losing streak since the 2022 bear market, as institutional capital rotated into AI equities and Bitcoin ETFs recorded their largest quarterly outflow since launch. Our report examines what drove the divergence, where structural adoption continued regardless, and what Q3 signals to watch.
Why it matters:
Digital assets posted a third consecutive quarter of losses in Q2 2026, the longest losing streak since the 2022 bear market, as institutional capital rotated into AI equities and Bitcoin ETFs recorded their largest quarterly outflow since launch. Our report examines what drove the divergence, where structural adoption continued regardless, and what Q3 signals to watch.
