The Nemo protocol has fallen victim to an attack that resulted in user funds being stolen. To compensate for the losses, the team announced the issuance of debt tokens NEOM.
How NEOM Tokens Work
Instead of direct dollar compensation, Nemo will issue NEOM tokens tied to user losses. Token holders will have the option to sell immediately through a liquidity pool paired with USDC or to hold NEOM and wait for future redemptions as funds are recovered.
Migration to Audited Contracts
To ensure users are not left with empty promises, Nemo has outlined a migration process allowing affected accounts to move residual assets from compromised pools into new, audited contracts with multi-party oversight. This shift aims to provide a safer environment during the term of the debt token model.
Tracing the Stolen Funds
In its post-mortem, Nemo disclosed that the stolen assets were funneled from Sui to Ethereum through Wormhole’s CCTP bridge. The team is coordinating with security experts and exploring white-hat negotiation frameworks to maximize recovery chances.
The situation surrounding the NEOM debt tokens represents a crucial test for both the Nemo community and the broader Sui ecosystem. The success of this initiative will depend on the speed of filling the redemption pool.
