Cover Protocol's Blacksmith contract was exploited on December 28-29, 2020, due to incorrect memory/storage reference in reward calculation logic, allowing unbounded minting of approximately 40 quintillion COVER tokens. Funds were returned by a white hat hacker.

Twitter netizens said that due to a loophole in the award contract, the coverage agreement lost $3 million. Conversion, the data on the chain shows that attackers (0xf05Ca...943DF) have used the cover contract to issue a total of about 10,000 COVER, and have replaced them with assets such as WBTC and DAI. Later, the blockchain browser showed that the attacker (address label Grap Finance: Deployer) who made a profit of 3 million US dollars by issuing additional COVER returned 4350 ETH to the address labelled YieldFarming.insure: Deployer. CoverProtocol officially tweeted announcing that it will provide a new COVER token based on the snapshot before the breakthrough was repeated. And the 4350 ETH returned by the attacker will also be returned to LP token holders through snapshot processing.