Cover, a decentralized financial insurance system, has shut down, as its main contributor stated on September 5. The team evaluated the protocol’s future and decided to end it a year after its debut.
For investors, Cover Protocol enabled collateralization. In return, customers might earn tokens as insurance payouts if their DeFi protocols were compromised.
A few months after its debut, Cover suffered a minting hack that left consumers uninsured. The hacker returned the stolen 4,350 ETH to the protocol, including a warning letter advising the company to take care of its business. The DeFi insurance company reallocated money to customers but saw its token value plummet 96%.
Yearn.Finance cut relations with Cover earlier this year, further complicating the insurance project’s situation.
The official statement reads:
“It is with conflicted emotions that I announce the end of RULER & COVER Protocol. The decision to do this did not come easy and is a final decision the remaining team made after reviewing the path forward, after the core developers suddenly left the projects.”
DeFi Ted, a pivotal contributor to Cover Protocol, announced its closure on September 5. The team will distribute the remaining treasury money to token holders starting with block 1,316,680. He also recommended customers remove money from Cover protocols soon once the leading developers departed the project.
Users Advised to Withdraw Money
After the news, COVER dropped almost 25%, hitting a swing low of $203. According to the statement, the remaining treasury money should be distributed equally among token holders following discussions with the remaining team.
The price of COVER looks doomed. Moreover, it has been trading around the lower range of the governing technical pattern for almost a month. DeFi Ted advised users to withdraw money from the protocols as soon as feasible.
