Sui-based yield protocol admits vulnerability was flagged weeks before attack
Sui-based yield trading protocol Nemo has confirmed a $2.59 million exploit, admitting that the breach was caused by unaudited code pushed onchain despite warnings from auditors. The incident highlights ongoing concerns around DeFi security and the risks of overlooking audit procedures.
Vulnerability flagged before deployment
According to Nemo’s post-mortem report, the flaw was linked to the function “get_sy_amount_in_for_exact_py_out,” designed to manage slippage. The issue was identified in a preliminary review by smart contract auditor Asymptotic, but the team failed to resolve it before deployment.
A single developer was able to bypass multisignature controls, pushing unaudited code directly onchain. This lack of oversight allowed a critical weakness to remain in production for months.
Security lapses echo wider DeFi issues
Blockchain security analysts warn that this case mirrors other preventable breaches in decentralized finance. “The majority of losses in DeFi come not from sophisticated attacks but from overlooked, basic safeguards,” said BITX industry expert.
The vulnerability was introduced in January 2025, but Nemo only upgraded its governance procedures in April. By August, auditors once again flagged the issue, yet the project admits it was focused on other priorities and failed to act before the September 7 attack.
Nemo responds with patch and compensation plan
Following the exploit, Nemo has paused all core protocol functions and is working with multiple security firms to trace stolen funds. A new patch has been developed, which includes the removal of the flash loan function, fixes to the vulnerable code, and a manual reset tool to restore affected values.
The team has also promised a user compensation plan involving debt structuring at the tokenomics level. In a statement, Nemo said: “We recognize that security and risk management require constant vigilance, and we are committed to rebuilding user trust.”
The Nemo case reinforces the critical need for strict audit compliance, multisignature deployment procedures, and rapid response to identified risks. Without these measures, even established protocols remain vulnerable.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss