DeFi Protocol Convergence hit by main hack, CVG token collapses

• Decentralized governance hedge fund platform Convergence exploited.
• 58M CVG tokens minted and swapped.
• CVG token worth plunged 99% from $0.12 to $0.0004 following the hack.

On Thursday, the decentralized finance (DeFi) protocol Convergence skilled a extreme breach, leading to a dramatic collapse of its CVG token.

The exploit concerned the creation of 58 million CVG tokens, which had been then exchanged for about $200,000 price of wrapped Ether (wETH) and crvFRAX stablecoin.

Hacker exploited a vulnerability in Convergence’s codebase

This malicious exercise was carried out utilizing a vulnerability inside the protocol’s codebase, in keeping with web3 safety agency QuillAudits.

The attacker leveraged this flaw to mint an enormous quantity of CVG tokens, subsequently swapping them for wETH and crvFRAX via Curve’s liquidity swimming pools. Following the token change, the attacker transformed the funds into Ether (ETH) and transferred them to Twister Money, a privateness instrument designed to obscure transaction trails.

This breach led to an estimated $210,000 in monetary losses, whereas CVG token holders confronted a catastrophic decline within the token’s worth.

Earlier than the assault, CVG had a totally diluted valuation of $17 million. Nevertheless, the token’s value plummeted by 99% within the Curve liquidity swimming pools, dropping from $0.12 to a fraction of a cent, buying and selling at $0.0004.

Frens, @Convergence_fi was simply hit by an exploit leading to a lack of round $210,000. 🚨

The attacker minted 58 million $CVG tokens & swapped them for 60 WETH & 15.9k crvFRAX.

The worth of $CVG on the time of exploit was $0.1155. It dumped 99% and is at the moment at $0.000413… pic.twitter.com/43MJGjQg2i

— QuillAudits ➡️ Web3 Safety 🥷🛡️ (@quillaudits_ai) August 1, 2024

Convergence asks customers to pause actions on the platform

In response to the incident, Convergence has suggested customers to chorus from interacting with the protocol to keep away from additional threat.

🚨 URGENT COMMUNICATION 🚨

Convergence has been hacked. Please do not work together with the protocol.

— Convergence (@Convergence_fi) August 1, 2024

The protocol’s group and safety specialists are at the moment investigating the breach to forestall future vulnerabilities and mitigate the harm attributable to the exploit.

This incident underscores the continuing dangers related to DeFi protocols and the significance of sturdy safety measures in safeguarding digital property.