To repay the victims of the hack, Nemo Protocol issues $NEMO debt tokens to pay off 2.6M. Users are provided with 1.1 tokens pegged to losses; recovery will be based on the recovery rate of the fund.
Nemo Protocol has also announced an ambitious debt token issuance to compensate customers who were caught up in a recent 2.6 million dollar exploit of its Sui-based DeFi infrastructure.
The essence of the recovery plan is the new $NEOM token, which is pegged 1:1 and the losses of the users at the point when the protocol was discontinued.
The affected users who experienced the security breach will be compensated with an equivalent amount of tokens of the dollar value that they have lost with the NEOM.
This strategy would take the place of a direct USD reimbursement that this protocol cannot afford at the moment and would provide the victims with a flexible avenue of recovering losses in the long run.
The program begins with a one-click migration that enables users to migrate the values of their remaining assets in the compromised pools to new and safer smart contracts managed by Nemo and partners.
At the same time, users get the $NEOM tokens that reflect the losses of users on the basis of an on-chain snapshot taken at the moment of the break in the hack.
Upon token possession, users have the choice of selling at once on one of the special-purpose liquidity pools released on the main DEX of Sui or of retaining $NEOM until the protocol recovers stolen funds.
Recovery of hacker assets, external liquidity injections, and strategic investments will finance the redemption pool.
This redemption model is transparent and fair, and also involves repayment that is directly proportional to recovering real funds, as well as offers real-time monitoring on a publicly visible dashboard.
The name of $NEOM, which means New Future in Arabic, is what Nemo promises to make a user whole.
The token issuance ratio is simple: one $NEOM token to every dollar lost, which will result in simplicity in compensation calculations.
It was identified to have been breached by unaudited code that was dispatched by an internal developer and made the protocol manipulable due to exposed smart contract functions.
This misappropriation of funds led to the loss of 2.6 million dollars, which reduced protocol TVL by 63 million down to approximately 1.5 million in the immediate aftermath of the exploit.
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