Overview of the Cetus Protocol Hack
Cetus Protocol, a Sui-native decentralized exchange (DEX), suffered a $220 million exploit on May 22, 2025, due to a pricing mechanism vulnerability. The attacker drained tokens from Cetus’s primary liquidity pools, prompting immediate action:
- $162 million frozen: Protocols swiftly isolated stolen funds post-attack.
- Pre-attack traction: April and May 2025 saw $50 billion monthly trading volumes each.
Recovery Milestones
1. Relaunch and Operational Restoration
On June 7, 2025, Cetus announced its relaunch with critical upgrades:
- Code fixes: Patched the exploit-triggering software flaw.
- Pool recovery: Restored 85–99% liquidity across affected pools.
- Audits: Conducted third-party security reviews for all upgrades.
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2. Financial Recovery Measures
- Compensation plan: 15% of CETUS tokens allocated (5% immediate, 10% linearly unlocked over 12 months).
- Funding backup: $7 million cash reserves + $30 million USDC loan from Sui Foundation.
- Legal actions: Pursuing cross-jurisdictional recovery of stolen assets.
3. Transition to Open-Source
Cetus revealed plans to:
- Fully open-source its codebase.
- Launch a "white paper bounty program" to crowdsource security enhancements.
Community and Ecosystem Support
- Sui Foundation’s role: Co-managing multisig wallets for frozen funds.
- User reimbursements: SlowMist’s余弦 confirmed most users reclaimed funds post-Sui’s intervention.
Key Dates
| Event | Date (2025) | Details |
|---|---|---|
| Hack occurrence | May 22 | $220M exploit via pricing bug. |
| Funds frozen | May 22–31 | $162M isolated on-chain. |
| Multisig transition | May 31 | Custody shift to Cetus/Sui/OtterSec. |
| Relaunch | June 8–9 | Full functionality restored. |
FAQs
Q: Can users recover all lost funds?
A: Yes—via Sui’s loan and Cetus’s compensation pool, ensuring 100% reimbursement.
Q: What caused the Cetus exploit?
A: A smart contract pricing flaw allowed artificial token valuation manipulation.
Q: How does open-sourcing improve security?
A: Transparent code enables community audits and faster vulnerability detection.
Q: Are Cetus’s liquidity pools safe now?
A: Post-audit upgrades and 85–99% liquidity restoration confirm robust safeguards.
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Conclusion
Cetus exemplifies post-crisis resilience with its rapid recovery, financial safeguards, and commitment to decentralization. Its pivot to open-source marks a progressive step toward Web3 security collaboration.