Nemo Protocol Introduces NEOM Token to Compensate $2.4M Hack Losses

The post Nemo Protocol Introduces NEOM Token to Compensate $2.4M Hack Losses appeared first on Coinpedia Fintech News

The Sui-based DeFi platform, Nemo protocol, has introduced a compensation plan for the affected users in the recent $2.4 million hack. The platform is planning to issue NEOM tokens equal to the value of their losses in USD to compensate. 

Nemo Protocol Launches Debt Token NEOM

In a blog post on Sunday, Nemo explained that it adopted a debt token strategy instead of paying in USD because the company does not have sufficient funds or capital to offer all the affected users. But the company will ensure that every user gets NEOM equal to the full amount of their original losses from this security incident.

Nemo wrote, “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.” 

Moreover, Nemo is also making sure that all calculations of $2.4 million loss, token distributions, and use of funds are conducted with high transparency and fairness. 

Three Path Recovery for Compensation

It has introduced a three-path recovery method for users to claim their lost assets. 

• Migration: Users can move their remaining assets from affected pools into new secure contracts with one click. 

• Compensation: They will receive $NEOM tokens equal to the value of their losses, based on a snapshot. 

• Restoration: Users can either sell NEOM right away or hold it while waiting for fund recovery.

According to the blog, one $NEOM will be minted for every $1.00 of confirmed loss, based on the pre-hack snapshot. The company is poised to reimburse with complete transparency. It said, “To ensure full transparency, we will establish a dedicated website to track the NEOM burn progress, allowing the community to monitor real-time updates on the initiative.”

Nemo also revealed that it is planning to make a 100% deposit for recovered funds from the hacker into a new, multi-party managed “Redemption Pool.” It will allow NEOM holders to claim their share, based on how much they hold.