In a heartfelt open letter, “DeFi Ted”, the lead contributor of Cover and Ruler Protocol, announced that virtual protocol will be disabled shortly, with the main reason being the developer’s exit for the conclusion of the project.
The Ethereum-based decentralized finance insurance marketplace that was launched at the beginning of this year allows users to hedge Cover tokens as collateral and receive insurance payments if their assets are hacked in any other DeFi protocol. In December last year, the Cover protocol was disastrously exploited when a hacker minted 40 quintillion tokens, significantly increasing the supply of tokens and rendering the project useless. This was a hypothetical theory that was confirmed, as a result of which the price dropped by 97%.
In a sudden turn of events that is becoming more common in the market, the hacker deliberately returned the money and attached a harsh message saying: “Next time, take care of your own shit”. Despite the refund, the protocol suffered serious damage both in terms of its cryptographic value and in terms of cultural reputation. Last year, the protocol was heralded as one of seven protocols acquired by Yearn.finance, the leading DeFi aggregator.
After that, just four months later, joined by the likes of SushiSwap and Cream Finance, it announced an unfortunate divorce to the merger after a serious conflict of interest with the new Cover protocol, Ruler. During its recent launch, Ted reassured investors of the availability of a token compensation package by writing:
“After discussing with the remaining team and finalizing plans moving forward it made sense that the remaining treasury funds be evenly dispersed to token holders.”
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Block 13,162,680 is defined as a point in time for calculating treasury funds for an even distribution among holders of protocol tokens. Furthermore, Ted also urges all token holders to withdraw their assets as soon as possible. This is because the protocol will no longer be able to support the platform’s user interface. The token of Cover has dropped 8.6% since this announcement. It went from $233 to $213, while trading volume kept increasing as all the investors tried to withdraw their funds.
Decentralized finance alternatives like Nexus Mutual will naturally seek to capitalize on the decline of their competitors. The protocol currently proposes an evolution of the existing entity by removing the strict Know Your Customer requirements for interacting with the platform.
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