- Binance issued a compensation plan for COVER users.
- The cryptocurrency exchange will spend $10 million from SAFU fund.
Binance, one of the largest cryptocurrency exchanges, announced the decision to compensate the losses incurred by users of the Cover protocol. The company will pay $10 million to affected eligible Binance users from its SAFU fund.
#Binance will utilize the Binance— CZ Binance (@cz_binance) December 31, 2020
to recompense a total of $10,107,505 USD (distributed in 8,171,634.10 BUSD and 2,581.16 ETH) to affected and eligible users.
Short thread... https://t.co/gBc9Z4KC6d
The team explained that they studied the compensation plan offered by Cover protocol and realized that a lot of Binance users who bought COVER on the trading platform after COVER's proposed snapshot time (December 28, at 8:11:06 AM UTC) would have their tokens become worthless.
Thus, the company came up with a plan to distribute $10 million from the SAFU fund to protect its users from losses.
Notably, the compensation is due only to those who held or traded COVER tokens during the specified timeframe.
Binance will not make any additional compensation for users that only deposited tokens between the ETH Snapshot Time and the Trading Stop Time.
What happened to COVER
On December 28, a hacker used a bug in the Cover protocol to mint an unlimited number of COVER tokens. Even though the protocol itself is safe, the COVER price crashed by 80% since the exploit as the attacker inflated the total amount of tokens in circulation by about 12 quintillions.
Since that time, the project team developed a compensation plan to cover the losses incurred by the protocol users. However, the proposed scheme covered only decentralized exchanges, like Balancer, SushiSwap, Uniswap, among others.
Meanwhile, centralized exchanges are supposed to reward their users by themselves.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.