Sui network-based Cetus Protocol has made a comeback! 🎉 Following a massive $223 million exploit, the decentralized exchange has relaunched with a fresh roadmap, a commitment to open-source development, and a comprehensive compensation program for affected users.
In a recent blog post on June 8, Cetus outlined its post-relaunch strategy. Key initiatives include bolstering protocol security 🛡️, upgrading monitoring systems, and transitioning towards full open-sourcing of its code. To further enhance security, a newly structured white hat bounty program has also been introduced, encouraging community-driven efforts to find and fix vulnerabilities. 💰
Compensation for the Affected 🤝
The Cetus team confirmed that all affected CLMM pools have been replenished thanks to a combination of recovered assets, treasury funds, and a significant $30 million loan from the Sui Foundation. Liquidity providers can now regain access to their previous positions, with impressive recovery rates ranging from 85% to 99%, depending on the extent of the damage to each pool.
To address any remaining unrecovered losses, Cetus has allocated a substantial 15% of its native CETUS token supply to affected users. 🎁 Of this, 5% is immediately claimable, while the remaining 10% will be unlocked monthly over the next year, starting June 10. The team emphasized that this 15% CETUS allocation introduces no new inflation, as it repurposes unvested team tokens within the existing supply cap.
Compensation claims will be tied to LP position NFTs, which will remain valid as certificates for CETUS redemption, even after liquidity is withdrawn.
Enhanced Security Measures 🔒
Cetus Protocol has also completed new security audits covering all code patches, contract upgrades, and the compensation contract. More rounds of audits and real-time threat detection upgrades are planned to further strengthen the protocol's resilience against future attacks. 💪
The Exploit and Recovery Efforts 🕵️♀️
The $223 million exploit occurred on May 22, when an attacker manipulated Cetus's liquidity pool pricing by exploiting a flaw in a third-party code library. Immediately after the attack, the Cetus team froze operations and collaborated with Sui validators to recover assets. An on-chain governance vote on May 29 approved the transfer of $162 million in frozen funds to a multisig wallet for recovery. The Sui Foundation further supported the effort with a dedicated USDC loan to backstop off-chain losses.
Legal proceedings are ongoing in multiple jurisdictions, with law enforcement agencies actively engaged. While the attacker declined a $6 million white-hat bounty and is reportedly attempting to launder assets, the team claims that most movements remain traceable. "We are highly confident that successful arrest and recovering the remaining assets is only a matter of time," Cetus stated in their latest announcement. ⏳
Should additional funds be recovered during the compensation period, users will have the option to redeem CETUS for USDC. Once that period ends, any remaining funds will be used for token buybacks and deposited into the community treasury.
Despite these positive developments, the CETUS token faced a slight dip of around 7% on the day of the announcement, extending a downtrend that began in May. 📉
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