DeFi Protocol Convergence Hit by Major Hack
- 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.
Hackers exploited 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 asks 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.
Importance of Strong Security Measures in DeFi Protocols
This incident highlights the ongoing risks associated with DeFi protocols and emphasizes the importance of implementing strong security measures to protect digital assets.
As the DeFi space continues to evolve, it is crucial for platforms to prioritize security and regularly audit their code to prevent vulnerabilities that can be exploited by malicious actors.
By learning from incidents like the hack on Convergence, the DeFi community can work towards creating a more secure and resilient ecosystem for decentralized finance.
