Nemo Protocol, a platform built on the Sui blockchain, is planning to compensate users affected by a recent $2.6 million hack through the issuance of NEOM debt tokens.
Compensation for Affected Users
In a new blog post, the team at Nemo Protocol announced that users impacted by the hack will receive compensation not in stablecoins, but in the form of new debt tokens named NEOM. Each NEOM token will be equal to the dollar value of a user's losses, as determined by an on-chain snapshot taken when the protocol was halted following the attack. The representatives noted that direct repayment in USD would have been the best option, but due to insufficient liquidity and capital, debt tokens are the best available choice.
Path to Recovery
Nemo's plan for recovery is structured in three steps. First, users will be provided access to a migration portal to transfer remaining assets from compromised pools into new, audited contracts managed by multiple parties. In this process, they will be given NEOM tokens according to their recorded losses. Token holders will then have the option to either sell them instantly in an automated market maker pool or hold onto them for future recoupment.
Uncertainty and Risks
The protocol assures that any assets recovered by the attacker will be deposited into a multi-party redemption pool, where NEOM holders can receive their share proportionately. The team will also create a public dashboard to monitor NEOM burn and redemption activities in real time. Despite efforts to restore trust, the final price of NEOM tokens will depend significantly on recovery activities and external assistance, raising concerns about whether the tokens will provide genuine restitution or merely represent another layer of risk.
Nemo Protocol's plan to issue NEOM debt tokens serves as a response to the hack, aiming to prevent further financial losses for users while gradually restoring trust in the platform.
