Yearn Finance and Cover Protocol’s merger process to be suspended

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Yearn Finance and Cover Protocol have parted ways, according to an announcement made earlier today.

Yearn Finance announced the conclusion of the integration process between the two companies, clarifying that YVault depositors who have already bought Cover Security will not be affected by this.

The above acquisition was originally revealed in November 2020, with Cover becoming the backstop service provider for the Yearn product suite. From its conception, the developers of the two protocols have been working closely with Yearn Finance at the time, saying that the relationship between the two parties has inevitably taken place between both parties.

While many anticipated that the synergies of this merger would be beneficial to users of both protocols and the DeFi ecosystem at large, the Cover hack brought an end to most of this optimism.The Cover Protocol was hacked on 28 December, with the infinite printing scheme adding greatly to the price of COVER crashing on the charts. Later, a white hat hacker named Grap.Finance took responsibility for the exploit and recovered all the confiscated money, which at the time amounted to more than $3 million.

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Since the incident, however, many consumers have lost confidence in the Cover Protocol, and Yearn Finance has been rumoured to be one of them. In reality, while the project did not specifically state what the explanation for the de-merger was, the creator of Ann, Andre Cronje, took Twitter to make the following remark,

“Personally, this was very sad to see. I had very high regard, trust, and faith in the Cover team. Lesson learned. Won’t trust them again.”

Source: Coingecko

Cover protocol’s native token $COVER dropped in value by over 28% in the 30 minutes that followed the announcement. At press time, $COVER was trading at $587.49.

 

It is also worth noting that most users in the community have backed Yearn Finance’s decision.

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