DeFi Cover insurance project protocol closes shop

The main contributor published a blog post explaining that the decision was difficult to make, but that it was the only possible solution.

Cover Protocol is shutting down its service after struggling to adapt to current conditions. In a blog post, DeFi Ted, one of the project’s main contributors, confirmed yesterday that the decision was made after the project’s developers suddenly decided to abandon the project. The remaining members, unable to maintain the protocol’s user interface, decided that a dissolution would be the best solution.

“The decision to do this was not an easy one and it was a final decision the remaining team made after considering the path forward after the core developers suddenly left the projects,” the post reads.

DeFi Ted advised customers to withdraw their assets from the project as soon as possible, adding that the closure was effectively a creditor payment. He explained that the Cover token and its associated contracts would effectively be shut down, with any remaining cash funds distributed equally among token holders. Ted clarified that the project development team would not be among the beneficiaries.

“The compensation will be from block number 13162680, this will be used as the snapshot to distribute the funds to holders from the treasury. The founders, of which I am one, will not be part of this transaction.”

The senior contributor said he was disappointed with the developers’ decision to abandon the project, considering that the firm had been working to improve its structure. According to him, the project was on the road to revival, after suffering some setbacks in recent months.

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“I want to personally say that I was extremely disappointed to hear that the development team was leaving so suddenly, especially considering the time we had spent together developing the protocols and following the vision they had,” Ted said.

All was going well for the decentralized finance system (DeFi) until December 2020, when it suffered an attack from a white hat hacker. The event shook the protocol’s confidence in DeFi, as 40 quintillion COVER tokens were stolen and then returned. The consequence was a massive plunge in the value of the COVER token.

At the time of the incident, the protocol was in the process of merging with Andre Cronje’s Yearn Finance. In March of this year, the developer of the DeFi project cut ties with Cover, further damaging the protocol’s reputation. Cronje expressed his frustrations in a rather cryptic tweet, since deleted, saying he regretted placing his trust and faith in the protocol.