cetusprotocol

In the early hours of 28/05/2025, Cetus Protocol, the leading AMM DEX platform in the Sui ecosystem, announced a plan to borrow funds from the Sui Foundation to compensate 100% of the losses to users after the hack causing a loss of 223 million USD on 22/05/2025. While awaiting the community vote to unlock 160 million USD of frozen assets, this move has helped the CETUS price increase by 30%, reaching 0.12 USD (CoinMarketCap). The article summarizes the details of the hack, remediation plans, impact on the DeFi market, and lessons for investors.

The $SUI Network is implementing significant security measures after a major vulnerability in the Cetus Protocol exposed $260 million in assets. The breach, which exploited a flaw in Cetus’s mathematical functions, has prompted the network to freeze $162 million in at-risk assets and dedicate $10 million to improving its security infrastructure.

Details of the #CetusProtocol Breach

An investigation into the incident revealed that the vulnerability stemmed from the Cetus protocol’s software design, not from the Sui network infrastructure or its Move programming language. The flaw within Cetus’s mathematical calculations left approximately $223 million in assets exposed.

Prompt action by Sui’s team mitigated further damage, freezing $162 million of the compromised funds. The Cetus team promptly notified users, providing ongoing updates regarding the breach, response measures, and future plans to address the issue. Their transparency helped maintain a degree of user confidence during a challenging period.

Strengthening Security Across the Sui Ecosystem

In response to the breach, the Sui Network has announced a comprehensive security enhancement plan. Key initiatives include the development of advanced analytical tools for early detection of vulnerabilities, as well as increased monitoring of high-risk protocol components.

Sui has committed $10 million toward user protection and security improvements. This investment will fund more rigorous audits—particularly targeting mathematical and software weaknesses in DeFi protocols—and facilitate partnerships with third-party security firms to bolster ecosystem defenses.

Commitment to Transparency and User Support

Sui’s leadership has emphasized the importance of transparency and open communication with its community. The network continues to provide regular updates across various channels to ensure users remain informed about security progress and developments.

The team is also exploring options for compensating affected users, although specifics have yet to be finalized. These steps aim to mitigate financial losses for those impacted and demonstrate the network’s commitment to user protection.

A Call for Industry-Wide Vigilance

The Cetus incident underscores the critical need for robust, proactive security measures in decentralized finance (DeFi). It serves as a reminder that rigorous mathematical and code audits are essential in safeguarding user assets across DeFi ecosystems.

Sui’s swift response—including technical upgrades, enhanced monitoring, and clear communication—reflects a proactive approach to security. As the network continues its recovery, its efforts may set new industry standards for protocol security and user protection in decentralized ecosystems.

In a dramatic comeback, Cetus Protocol, the leading decentralized exchange (DEX) on the Sui blockchain, has officially restarted operations and is making a bold pivot to an open-source model. This move follows one of the largest exploits in DeFi history, where attackers siphoned off over $220 million from its liquidity pools.

💥 The Exploit That Shocked Sui

On May 22, Cetus was hit by a sophisticated attack targeting a vulnerability in its CLMM (concentrated liquidity market maker) smart contracts. The flaw involved an integer overflow that allowed the attacker to manipulate pricing mechanisms.

📉 Estimated damage: $220M – $223M

⛓️ Frozen funds: $162M recovered on-chain

⏱️ Response time: Sui validators froze attacker wallets within 1 hour 20 minutes

🔁 A Swift and Strategic Relaunch

The Cetus team acted fast. Here's how they rebooted the platform:

💸 $7M from protocol reserves

🤝 $30M USDC loan from the Sui Foundation

🔁 Recovered assets from frozen funds

💡 Recovery rates per pool now range between 85%–99%

🔐 Security Overhaul + Going Open-Source 🌐

Cetus isn't just patching holes—it’s transforming its foundation:

✅ All vulnerable contracts audited and patched

📂 Codebase to be open-sourced for community audits

🧑‍💻 Launch of a white-hat bounty program

🛡️ Long-term roadmap includes continuous third-party audits and on-chain monitoring

💰 User Compensation Plan

The protocol has announced a compensation program for affected users:

🎁 15% of total CETUS token supply allocated to victims

5% unlocked immediately

10% released monthly over the next year, starting June 10

📉 CETUS token has seen a ~12% dip, now hovering around $0.11

⚖️ Legal Action & Community Support

⚖️ Cetus is pursuing multi-jurisdictional legal action and working with law enforcement

🧠 A $6M white-hat bounty is up for grabs for returning the remaining ETH and USDC

🫱🏼‍🫲🏽 Coordinated response by Cetus, Sui validators, and the Foundation shows strong DeFi governance

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🚀 What This Means for DeFi

This event underscores key lessons:

🔎 Focus 📌 Insight

Security First Open-sourcing the code invites transparency and faster bug discovery.
Resilience Fast recovery and pooled support from the ecosystem proved vital.
User Protection A well-structured compensation plan shows maturity in DeFi governance.
Community Trust Involving the community and being transparent is critical post-crisis.

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📅 What to Watch Next

⏳ June 10: CETUS token unlocks begin for victims

👨‍💻 Open-source code release and bounty details

🔍 Ongoing legal updates and fund recovery progress

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💬 Cetus has turned a historic crisis into an opportunity for growth, transparency, and evolution. The road ahead may still be challenging, but the DEX
has reemerged stronger and smarter—proving once again that the DeFi world doesn’t back down. #CetusProtocol #SuiBlockchain #DeFiSecurity #OpenSourceFinance #CryptoRecovery $SUI