TLDR
- Nemo launches NEOM token to recover $2.59M exploit losses.
- NEOM token aids Nemo users after $2.59M DeFi exploit
- Exploit hits Nemo; NEOM tokens compensate $2.59M losses.
- Nemo issues NEOM tokens post $2.59M exploit breach.
- $2.59M exploit sparks Nemo’s NEOM recovery token launch.
Sui-based DeFi platform Nemo Protocol launched its NEOM debt token program to address a $2.59 million exploit on September 7. The protocol will issue one NEOM token per dollar lost, aiming to restore value to impacted users. This move follows a major collapse in Nemo’s total value locked and broad community concern.
NEOM Token Launch Responds to $2.59M Exploit
Nemo Protocol activated a three-phase NEOM token recovery program after an exploit drained $2.59 million across multiple asset pools. A rogue developer deployed unaudited smart contracts, bypassing review by using single-signature access. The attacker exploited flash loan and query functions, triggering systemic vulnerabilities.
The NEOM token initiative compensates affected users based on pre-attack on-chain snapshots. Each NEOM token is pegged 1:1 to the user’s USD losses from the compromised pools. Users can either hold NEOM tokens or exit via active trading pairs on decentralized exchanges.
Nemo created immediate NEOM/USDC liquidity pools to allow real-time exits for users seeking faster capital access. These pools offer depth and market-based pricing tied to expected protocol recovery and user sentiment. The redemption waterfall will prioritize recovered hacker funds and external investments.
Developer Actions Led to Critical Smart Contract Breach
The breach originated from code introduced in January containing a function called “get_sy_amount_in_for_exact_py_out.” The developer inserted it without disclosing it to auditors or security partners during protocol reviews. MoveBit auditors approved contracts based on incomplete data, which masked the vulnerable code.
In August, Asymptotic security experts discovered the “C-2” vulnerability and raised critical alerts. However, the developer dismissed concerns and skipped remediation, allowing the issue to persist. On September 7, the attacker initiated flash loan-based exploits and began laundering stolen assets across chains.
The team traced the loss to multiple pools including sUSDC, sbUSDT, and sSUI. The hacker used Wormhole CCTP for rapid cross-chain transfers, eventually aggregating funds on Ethereum. Centralized exchanges were alerted to freeze any identifiable stolen funds.
Recovery Path Empowers Users With On-Chain Portal
Nemo introduced a portal to assist affected users with tracking, claiming, and migrating their assets. Once users connect their wallets, the interface calculates total loss, residual value, and NEOM token allocation. A one-click migration tool simplifies transferring assets into new, audited contracts.
After migration, users instantly receive NEOM tokens equivalent to their losses. The platform provides detailed loss reports per user to maintain transparency and rebuild community trust. A third module enables claiming NEOM tokens directly into wallets, supporting flexible recovery options.
Nemo initiated emergency audits and plans additional external reviews. The NEOM token forms the centerpiece of Nemo’s strategy to return lost value while restoring ecosystem credibility. The protocol aims to prevent similar security lapses through stronger governance and multi-signature controls.
