Nemo Protocol Exploited for $2.4M on Sui Blockchain, Highlighting DeFi Vulnerabilities

Nemo, a yield optimization protocol built on the Sui blockchain, lost $2.4 million in a hack on Monday. The attacker exploited vulnerabilities in Nemo's smart contracts to siphon USDC, Circle's dollar-pegged stablecoin, moving funds from Arbitrum to Ethereum. Blockchain security firm Peckshield confirmed the breach.

The incident underscores the persistent risks in decentralized finance, even as institutional adoption of digital assets grows. Nemo had distinguished itself by allowing users to tokenize yield, offering trading and hedging opportunities on future yield streams. Before the exploit, the protocol held over $6 million in total value locked (TVL), which plummeted to $1.53 million afterward.

Nemo's model splits staked assets into Principal Tokens (PT) and Yield Tokens (YT), providing flexibility for yield-seeking investors. The hack raises questions about the security of even sophisticated DeFi platforms as the sector evolves.