- Nemo Protocol is compensating $2.4M hack victims by issuing NEOM debt tokens, one per lost dollar.
- A three-path recovery plan—migration, compensation, and restoration—ensures users have multiple recovery options.
- A Redemption Pool will manage recovered funds, with NEOM holders entitled to proportional claims.
The Sui-based DeFi platform Nemo Protocol has said that the compensation plan would be made available for the recent $2.4 million hack victims. To recover their losses, the platform is launching a debt token called NEOM that will pay the victims so that the community can gain back trust.
NEOM Token to Compensate Losses
Per Nemo Protocol’s blog post recently, one NEOM token will be minted for each dollar of loss confirmed. This will be calculated based on a pre-hack snapshot of user balances. Instead of distributing USD, the team opted for a debt token strategy, 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.”
The platform emphasised that this approach ensures full recognition of user losses while creating a pathway for eventual restoration as funds are recovered.
Three-Path Recovery Framework
With the help of a three-pronged recovery framework, Nemo Protocol aims to assist the users:
- Migration: Users can migrate any remaining assets from the compromised pools into the newly secured contracts via a one-click operation.
- Compensation: Compensation will be made through transparent distribution of NEOM tokens corresponding to the amounts in confirmed losses.
- 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, token distributions, and fund usage will be handled with transparency. To reinforce trust, a dedicated website will be launched, allowing users to monitor the NEOM burn progress in real time.
Redemption Pool for Recovered Funds
In addition to the NEOM issuance, the Nemo Protocol revealed plans to create a “Redemption Pool” that is 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 make sure that damaged users receive as much value back as can be restored.
Reminiscent of breaches in DeFi security witnessed before with Thorchain, the hack spells out the vulnerabilities open platforms bear. By instituting NEOM, Nemo Protocol is setting aside immediate relief for its community while actively espousing the culture of transparent crisis management.
There are still some challenges to address, mainly the long-term value of NEOM, but whatever that may be, it stands as a clear declaration that the project presents the initiative proactively to foster user confidence to survive cyber threats.
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Source: https://thenewscrypto.com/nemo-protocol-launches-neom-token-after-2-4m-hack/
