tl;dr
Cetus Protocol, a leading decentralized exchange on the Sui blockchain, has resumed operations after a $233 million exploit in May caused by a malicious oracle attack that manipulated prices and drained liquidity. The platform recovered approximately $162 million through community governance, obtain...
Cetus Protocol, a leading decentralized exchange on the Sui blockchain, has resumed operations after suffering a $233 million oracle attack in May that manipulated prices and drained liquidity. The attacker exploited a vulnerability in an open source library connected to the constant function market maker, allowing massive on-chain swaps that severely disrupted pool prices and removed assets from liquidity pools.
Following the attack, the protocol executed a comprehensive recovery plan. Through community governance, approximately $162 million in frozen funds were retrieved, complemented by a $30 million bridge loan from the Sui Foundation. The team patched vulnerabilities and restored affected liquidity pools to 85-99% health.
To compensate users for losses, Cetus Protocol is allocating 15% of CETUS token supply to a compensation contract. Eligible users can claim their tokens starting Tuesday, with a 5% immediate unlock and the remaining 10% vesting over 12 months. Additional recovered funds will be distributed to users instead of tokens. This compensation plan aims to foster a more community-driven ecosystem moving forward.
The protocol is collaborating with law enforcement across jurisdictions, expressing confidence that an arrest and further recovery are imminent. While some critics voiced concerns about centralization in the response, leadership emphasized that coordinated, decisive action among independent parties is essential for true decentralization and effective crisis management.
Market reactions have been mixed: the SUI native token has partially rebounded, rising 5% to $3.44 but still down nearly 36% from its January all-time high. Meanwhile, CETUS tokens remain significantly depressed, trading around $0.12—a decline of over 75% since their November peak, and down 30% since the exploit.
Despite the setback, Cetus Protocol is rebuilding with a renewed focus on security, resilience, and community governance to provide robust DeFi infrastructure within the Sui ecosystem.