Cover Protocol: a peer-to-peer coverage market

The total value locked (TVL) on Ethereum-based DeFi protocols has skyrocketed from 2020, reaching an all-time high at $48.76 billion this month. This rapid growth caught the attention of bad actors who try to profit from exploiting vulnerabilities in smart contracts. The Block Research estimated more than $120 million was exploited from DeFi smart contracts in 2020 alone. 

The composability among protocols makes it harder for auditors to spot bugs in smart contracts. Alpha Homora was one of the most recent victims of a $37.5 million exploit, where it involved the use of CREAM Finance's Iron Bank service, which gave out uncollateralized loans to trusted protocols like Alpha Homora. The exploit was very complex and only a few professionals could dissect the transaction. The severity and complexity of these exploits cannot be ignored, as DeFi needs to be resilient against exploits for mass adoption.