Nemo Protocol Launches Debt Token Program to Provide Funds to $2.6 Million Vulnerability Victims

PANews reported on September 15th that according to The Block, Nemo Protocol, a yield trading platform based on Sui, recently launched a debt token compensation plan following an exploit. The plan centers on issuing NEOM tokens equivalent to users' dollar losses. Nemo stated that while it would like to compensate directly in USD, it lacks sufficient funds, hence the debt token strategy. Its goal is to ultimately recoup users' principal losses, based on an on-chain snapshot taken at the time of the protocol's suspension. The protocol has a three-step recovery plan: first, users will be allowed access to a dedicated portal to migrate the remaining value of the compromised pool to a new contract, with users receiving an equivalent value in NEOM tokens during the migration. Token holders can choose to exit through an automated market maker (AMM) pool or retain their tokens and other funds for recovery. Nemo also plans to launch a liquidity pool on Sui's main DEX to facilitate user exits. All recovered funds will be deposited into a redemption pool for claiming, with some external funding allocated to the pool for support.

On September 7, Paidun first disclosed that the Nemo Protocol fund pool had $2.6 million stolen by attackers. The attackers exploited a vulnerability in the code introduced by developers and deployed the code without proper auditing.