Nemo Protocol Announces Compensation Plan After $2.6 Million Hack
Nemo Protocol, a decentralized finance platform on the Sui blockchain, revealed a compensation plan for users affected by a $2.6 million exploit earlier this month. The plan uses debt tokens called NEOM to represent users’ losses in USD.
NEOM Debt Tokens to Cover User Losses
The compensation plan issues NEOM debt tokens, each worth $1. Nemo aims to restore users fully by matching tokens to their losses. The tokens’ value may fluctuate with market conditions and fund recovery progress.
- Users can transfer remaining assets from compromised pools to new, secure smart contracts with one click.
- When claiming migrated assets, users receive NEOM tokens equal to their USD loss.
Users may choose to exit immediately via an automated market maker (AMM) or hold NEOM tokens while waiting for fund recovery. Nemo will launch a dedicated portal for affected users to check eligibility and claim tokens. NEOM tokens will be airdropped directly into users’ wallets.
Details of the $2.6 Million Exploit
On September 7, Nemo Protocol suffered a $2.6 million hack that drained its liquidity pools. The platform paused operations and took an on-chain snapshot to assess losses accurately.
The breach stemmed from two main issues:
- A new feature was deployed without proper audits. This included a public flash loan and a query function that could alter contract data. Both were exploited by the attacker.
- Governance allowed a developer to deploy unaudited code despite auditor warnings.
Nemo plans to create a website to track NEOM token burns and provide real-time updates on the compensation process.
