Understanding the Compensation Plan

In a bid to mend the wounds caused by a recent exploit, Cover Protocol has stepped up with a detailed compensation plan aimed at both token holders and liquidity providers. This plan hinges on a snapshot taken just before the hack, at the notable block height of 11,541,218.

Who’s Eligible for New COVER Tokens?

Liquidity providers on popular platforms like Uniswap, SushiSwap, and Balancer are in for a treat! They’ll receive newly minted COVER tokens corresponding to their liquidity share prior to the unfortunate incident. But that’s not all; those providing liquidity on Uniswap and SushiSwap will also snag a slice of the Ether returned thanks to the gracious interventions of “white hat” hackers, like those from Grap.Finance.

The Tokenholder Reimbursement Scheme

For token holders, things get a bit simpler. Cover Protocol is offering a one-to-one distribution of new COVER tokens based on the initial balance present in wallets just before the exploit. Pretty generous, right?

And What About Centralized Exchanges?

Cover Protocol isn’t leaving anyone in the dust. They’ve announced that they’re liaising with centralized exchanges to ensure users with $COVER tokens at the aforementioned block height will receive their new $COVER tokens on a 1:1 basis. Talk about tech love!

Binance’s Response: A Lifeline for Its Users

Binance isn’t just sitting back and watching the drama unfold. The exchange has announced a hefty compensation package for its users affected by the hack, pledging a cool $10 million from its SAFU Fund. This compensation will be provided in a mix of Binance USD (BUSD) and Ether, highlighting Binance’s commitment to its user base.

The Breakdown of Binance’s Compensation

• Approximately 8.17 million BUSD
• Roughly 2,581.16 ETH

This robust funding initiative comes as a result of realizing that many Binance users weren’t covered by Cover Protocol’s compensation plan. A true case of ‘better late than never’!

Reflections on Security in DeFi

The recent hacks raise red flags in the decentralized finance (DeFi) landscape. Despite an overall drop in crypto crime, the DeFi sector accounted for more than half of all thefts and hacks in the latter half of 2020. As alarming as it sounds, it’s a salient reminder for all players in the space: security measures need to be ramped up!

The Road Ahead

With the Cover Protocol team keeping a close watch on the culprits, including the first attacker who supposedly drained over $4 million, the community remains hopeful that tighter security will be paramount in the future. Transparency and vigilance must go hand in hand as we navigate this ever-evolving landscape.