The Sui-based platform Nemo Protocol has announced a compensation plan for the victims of a recent $2.4 million hack. A new debt token, NEOM, will be introduced as part of this initiative.
Compensation through NEOM Tokens
According to a recent blog post from Nemo Protocol, one NEOM token will be minted for each dollar of confirmed loss. This will be calculated based on a pre-hack snapshot of user balances. The team opted for a debt token strategy instead of distributing USD, citing insufficient capital reserves. Nemo stated, "Our goal is to make every user whole by issuing a debt token equal to their loss in USD, with the understanding that its value may change over time depending on market conditions and the progress of fund recovery."
Three-path Recovery Strategy
With the help of a three-pronged recovery framework, Nemo Protocol aims to assist the users:
1. **Migration:** Users can migrate any remaining assets from the compromised pools into the newly secured contracts via a one-click operation.
2. **Compensation:** Compensation will be made through transparent distribution of NEOM tokens corresponding to the amounts in confirmed losses.
3. **Restoration:** Users may sell NEOM tokens immediately or retain them while waiting for the recovery of stolen funds.
Nemo assured the community that all calculations and token distributions will be managed with transparency.
Redemption Pool for Recovered Funds
In addition to the NEOM issuance, the Nemo Protocol revealed plans to create a 'Redemption Pool' managed by multiple parties. Any funds successfully recovered from the hacker will be deposited fully into this pool. NEOM holders will be able to claim their share of recovered assets proportionally to their token holdings. This action is consistent with Nemo’s publicly declared mission of fairness and accountability, to ensure that damaged users receive as much value back as can be restored.
The hack underscores the vulnerabilities that open platforms face in the DeFi security space. The issuance of NEOM provides immediate relief for the community while promoting a culture of transparent crisis management. Although challenges regarding the long-term value of NEOM remain, it stands as a proactive initiative to restore user confidence.
