- Leveraging decentralized governance hedge fund platform Convergence.
- 58M CVG tokens were minted and exchanged.
- Following the hack, the value of the CVG token plummeted 99% from $0.12 to $0.0004.
On Thursday, decentralized finance (DeFi) protocol Convergence suffered a serious vulnerability, causing its CVG token to collapse significantly.
The breach involved the creation of 58 million CVG tokens, which were then exchanged for approximately $200,000 worth of wrapped ether (wETH) and the crvFRAX stablecoin.
Hackers exploit vulnerability in Convergence code library
According to web3 security company QuillAudits, this malicious activity is carried out by exploiting vulnerabilities in the protocol’s code base.
The attacker exploited this flaw to mint a large amount of CVG tokens, which were then exchanged for wETH and crvFRAX through Curve’s liquidity pool.
After the token swap, the attackers converted the funds into ether (ETH) and transferred them to Tornado Cash, a privacy tool designed to obscure the transaction’s tracks.
The breach resulted in an estimated $210,000 in financial losses, while CVG token holders faced a catastrophic drop in the value of their tokens.
Convergence advises users to pause activity on the platform
In response to this incident, Convergence advises users not to interact with the protocol to avoid further risks.
The protocol’s team and security experts are currently investigating the vulnerability to prevent future breaches and mitigate the damage caused by it.
This incident highlights the ongoing risks associated with DeFi protocols and the importance of strong security measures in protecting digital assets.
Understanding the Vulnerability Exploited in DeFi Protocol Convergence
The recent hacking attack on the DeFi protocol Convergence has sparked concerns within the crypto community. The exploit involved the minting of 58 million CVG tokens, leading to significant financial losses and a drastic drop in the token’s value.
Exploiting Vulnerabilities for Financial Gain
The hackers targeted vulnerabilities in Convergence’s code base to create and exchange a large number of CVG tokens for wETH and crvFRAX. This unauthorized activity resulted in the loss of approximately $210,000 and a sharp decline in the token’s market value.
Immediate Response and Investigation
In response to the breach, Convergence has urged users to halt all activities on the platform to mitigate further risks. The protocol’s team and security experts are actively investigating the vulnerability to prevent future breaches and safeguard user assets.
Ensuring Security in DeFi Protocols
This incident serves as a stark reminder of the risks associated with DeFi protocols and the critical need for robust security measures. As the crypto space continues to evolve, implementing stringent security protocols is paramount to safeguarding digital assets and protecting users from malicious attacks.
