Sui-based Nemo Protocol has launched NEOM debt tokens to compensate users after a $2.6M exploit. Victims can redeem NEOM via liquidity pools or hold for recovery, with all recovered funds and external loans directed to a redemption pool.

Sui-based decentralized finance platform Nemo Protocol has launched a compensation program built around a new debt token called NEOM following a roughly $2.6 million exploit of its liquidity pools on September 8, 2024. The hack was traced to unaudited code that introduced a vulnerable pricing mechanism and a public flash-loan function, allowing an attacker to manipulate pool balances and drain funds. Because the team lacks sufficient reserves for immediate direct reimbursement in stablecoins, it is using NEOM to formally recognize user losses and structure repayment over time. Under the plan, one NEOM token is minted for each dollar of confirmed loss per user, based on an on-chain snapshot taken when the protocol was paused. Affected users first migrate remaining assets into new, audited smart contracts and simultaneously claim their NEOM allocation. They can then either exit early by selling NEOM through a Sui-based liquidity pool (for example, a NEOM/USDC pair) or hold the token to gain a proportional claim on a redemption pool funded by any assets recovered from the attacker plus external capital or loans raised by the team. All recovered funds are directed into this pool, with redemptions and token burns to be tracked via a public dashboard and regular progress updates, positioning NEOM as the central mechanism for phased restitution and transparency after the exploit.

✨ AI-generated background, compiled from web sources — not editorial content.

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