Following the announcement by core contributor “DeFi Ted,” COVER price plummeted 16% as trading volumes soared. Cover Protocol, a DeFi insurance cryptocurrency minted on Ethereum, will no longer receive support and development after engineers in the core team left suddenly.
The insurance coin’s core contributor, “DeFi Ted” announced the project would be shutting down early Sunday morning. COVER had a market cap of around $21 million at the time he made the announcement. Within hours, the price fell over 16%, from $269 to the low $220s as of writing these lines.
24-hour trading volumes surged from below $4 million to nearly $20 million as COVER holders scrambled to exit. DeFi Ted advised coin holders to “withdraw any funds from both protocols asap, as we can no longer maintain the UI.”
At the time of publication, COVER is traded against ETH, USDT, and BUSD on Binance, Gate-io, OKEx, and CoinEx.
The Irony: COVER Is Not Covered
The DeFi insurance project’s leader also wrote:
“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.
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.”
DeFi Ted added that he “was extremely disappointed to learn that the development team was leaving so suddenly, especially given the time we had spent together building out the protocols and following the vision they had.”
Ironically, the vision they had was DeFi insurance coins that would cover investors from losses in projects that end in calamity, as Cover Protocol just did.
The Cover Protocol allowed users to stake COVER coin to put it up as collateral, and receive smart contract tokens that would execute claims to insure the holder against losses from hacks, exploits, and rug pulls in Ethereum DeFi projects gone awry.
Cover Coin Has Shown Signs of Buckling
The Cover token suffered a big blow in March from a highly publicized split with Andre Cronje’s Yearn Finance (YFI).
Launched in July last year, the YFI platform is designed for developers to experiment with creating autonomous yield maximizing apps that automatically disburse user’s funds to the highest yield generating projects in the DeFi ecosystem.
After partnering with Cover Protocol last November, the two projects parted ways in March without Yearn Finance or Cover disclosing why. Though many speculated it might have been prompted by the Dec 2020 “infinite mining” hack that crashed the crypto’s price by 80%.
The white-hat hacker returned the funds, 4,350 ETH, at block 11542777. They included a note with the returned crypto that read, “Next time, take care of your own s**t.”