After millions of funds were lost in crypto in the month of July, the start of a new month brought a new hack to the crypto community. In a shocking event, decentralized finance protocol- Convergence got exploited out of $210,000. This has seriously rattled the crypto community.
Let’s explore how this attack happened and what impact it created.

The Exploit Uncovered

An unknown attacker found a big vulnerability in Convergence’s CvxRewardDistributor contract. The hacker minted 58 million $CVG tokens, then swapped them for 60 wrapped ether (WETH) and 15,900 crvFRAX stablecoins on Curve. At the time, CVG was trading at $0.1155. After the hack, it crashed to a shocking $0.000413.

QuillAudits, a top web3 security firm, said blockchain data on Etherscan shows the hacker converted the stolen funds to ether (ETH) and sent them to Tornado Cash, which is used to hide transaction details.

Financial Repercussions

The direct financial loss from the hack is about $210,000. But for CVG holders, it’s even worse. The token’s fully diluted value (FDV) was $17 million before the hack. That value disappeared almost instantly. The price of CVG just nosedived, causing panic among investors and shaking trust in the protocol.

Convergence quickly took the situation on their hand and warned users on X, telling them not to interact with the protocol until further notice.

Root Cause and Security Implications

The root cause was a vulnerability in the CvxRewardDistributor contract. This allowed the attacker to bypass input validation and mint tons of CVG tokens. This really shows why we need thorough smart contract audits and constant security checks in the DeFi space.

QuillAudits has been crucial in figuring out the details of the exploit. They’re working hard to give the community constant insights and recommendations.

This exploit is another reminder of the risks in decentralized finance protocols. Everyone needs to stay vigilant, keep up with security news and only use well audited projects. As DeFi keeps growing, the complexity and frequency of attacks grow too, making robust security practices super important for all of us.

Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0

PRC Comment Policy

Your comments MUST BE constructive with vivid and clear suggestion relating to the post.

Your comments MUST NOT be less than 5 words.

Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.

Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.

Constructive REPLY to comments is allowed