Convergence, a decentralized finance (DeFi) protocol, got hammered by hackers. The attack happened in the wee hours of August 1. It cost the protocol a whopping $212,000.
The hack sent Convergence's native token, CVG, into a nosedive. Its value plummeted by over 99%. Talk about a rough day at the office.
Wireshark, the pseudonymous founder of Convergence, spilled the beans in a post-mortem. The hacker exploited a smart contract vulnerability. They minted and sold 58 million CVG tokens for about $210,000.
But that's not all, folks. The hacker also nabbed $2,000 in unclaimed rewards from Convex. Convex is another DeFi protocol that boosts rewards for Curve liquidity providers.
PeckShield, a blockchain security firm, tracked the hacker's moves. After minting the CVG tokens, they quickly swapped them for 60 wrapped-Ether and 15,900 Curve.fi FRAX.
The CVG token is now trading at a measly $0.0004. Its market cap has shrunk to just $57,000. That's according to CoinMarketCap data.
Convergence admitted they goofed up. They accidentally removed a crucial line of code from their smart contract. This contract distributes CVG staking rewards.
"The modification led us to remove the line of code that was checking the input given to the function," Convergence explained. This slip-up allowed the hacker to exploit the contract.
Convergence claims user funds are safe. However, they've advised users to withdraw assets from the platform. They're working on fixing the rewards contract for the Stake DAO integration.
The hack has put a dent in Convergence's total value locked. It dropped from $5.79 million to $3.69 million, according to DefiLlama data.
This incident is part of a larger trend. The crypto ecosystem lost around $266 million to hacks in July alone. Most of this came from the $230 million hack of Indian trading platform WazirX on July 18.
Convergence is now left picking up the pieces. "We apologize to our community and investors, and we take full responsibility for what happened," they said. They're currently mulling over the future of the protocol.
This hack serves as a stark reminder. Even in the world of cutting-edge finance, a single line of code can make or break a protocol. It's a tough lesson for Convergence, and a wake-up call for the entire DeFi space.