How much was lost in the Cover protocol hack?

The Cover protocol hack resulted in $183K in losses on November 27, 2020.

What attack technique was used in the Cover protocol exploit?

The Cover protocol exploit utilized Rugpull. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

Cover protocol Hack

TOTAL LOST $183K

Low Nov 27, 2020 Rugpull ethereum

Affected Chain ethereum Incident surface

Recovered - No recovery reported

All-Time Rank #1333 By amount stolen

Auditors 1 Prior security audit

Incident Overview

The contract deployer added initial liquidity at:

https://etherscan.io/tx/0x35695ae8…cfb872

The liquidity was removed by the contract deployer at:

https://etherscan.io/tx/0x259a237b…a86c07

27.11.2020

The contract deployer added initial liquidity a second time at:

https://etherscan.io/tx/0xb288e374…35517e

The liquidity was removed by the contract deployer at:

https://etherscan.io/tx/0xa91ddff3…584847

30.12.2020

Incident Report

Protocol / Project Cover protocol

Date of Incident November 27, 2020

Affected Chain(s) ethereum

Attack Technique Rugpull

Classification Other

Protocol Information

Protocol Type Insurance

Affected Token COVER

Official Website over.network/

Protocol Twitter/X @CoverProtocol

Market Context at Time of Hack

Token Categories

Wallet Layer 1

Protocol Links

GitHub Discord

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of rugpull and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with ethereum smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in Cover protocol's contract logic - root cause: other

Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block

Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Hard to catch — private key / OpSec failures are outside smart contract audit scope

Audited by Audit Report 1 — still lost $183K. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Cover protocol, these are the critical security checks that could have prevented this incident (November 2020).

Verify all logic paths related to Rugpull are guarded by proper access controls and input validation
Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

Audit Report 1 Report

Threat Assessment

Severity Level

LOW

Attack Vector Rugpull
Root Cause Other
Year 2020

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