Key content:

Henry: Cetus co-founder, elaborated on the complete process of the hacking incident, measures the team has taken, compensation plan for user losses, and key content regarding the project's future restart plan and security upgrades.

Amy: Head of BD (business development) at Cetus. Discussed topics such as how to restore community confidence and the future product development direction of the project, supplementing the team's viewpoints and plans.

Short-term goal: Quick restart, full compensation, and repair security shortcomings.

Long-term value: Relying on the growth of the Sui ecosystem, through product innovation (such as FQ low-fee aggregator) and DAO governance transformation, reshape into a more transparent, community-driven protocol. The growth of Sui has not yet reached its ceiling, and the future market share of Sui is likely to multiply several times.

Key information: Team 100% token compensation + Sui Foundation backstop, user assets prioritized, no exit, no abandonment.

1. Event review and key timeline

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1. Attack time and method Occurrence time: 6 PM Singapore time on May 22 (UTC 10:35:50).
Root of the vulnerability: Logic vulnerabilities in the self-developed open-source code repository intermate, business logic vulnerabilities.

Attack steps: Manipulate liquidity pool asset prices using flash loans (Flash Swap).
Construct false liquidity through add liquidity, then withdraw real assets through remove liquidity.

Response time: UTC 10:40 received alert → UTC 10:53 confirmed anomaly → suspended contract.

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2. Scale of losses and fund flow Total loss: Over $200 million (approximately $220 million).

Funds frozen: $160 million frozen on the Sui chain (achieved on-chain governance through validator voting).
Approximately $60 million transferred to Ethereum via cross-chain bridges (Wormhole, CCTP, etc.).

Tracking progress: Locking hacker IP, VPN, wallet addresses, and investigating with security companies (IncaDigital, C591).
Reported in multiple states in the US and Singapore, entering the judicial evidence collection phase.

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2. Compensation plan (100% compensation) and sources of funds


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1. Compensation ratio and scope Initial direct compensation: 85.7%–96% of user assets (can be withdrawn on the first day after restart).
Remaining portion: Gradually supplemented to 100% through recovered funds and protocol revenue.

Coverage: All LP users (calculated based on TVL snapshot).
Affected ecosystem cooperative projects

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2. Sources of funds Source description: Future protocol revenue historical monthly average income of $1.5M (annualized $18M), all used for compensation. Team cash reserves are non-token cash assets (amount not disclosed). 100% team tokens The total CETUS tokens held by the team (including unlocked portions, accounting for 20%), with a market value of approximately $20 million. Sui Foundation loans approximately $30 million (terms confidential, must be repaid). Other token compensation contracts to make up remaining losses (such as SUI/USDC mixed compensation).

3. Impact of compensation on CETUS stakers: Short-term yields sharply decrease (priority for debt repayment), long-term recovery with protocol revenue.
Token selling pressure: Due to compensation including CETUS tokens, there is a short-term risk of selling pressure (the team promises to release in stages to buffer the impact).

3. Restart plan and security upgrades

1. Restart timeline Expected within 24 hours: Restore LP pool and all functions (including mining, trading, etc.).
Prerequisites: Complete historical data restoration, liquidity injection, final security testing, expected to resume on June 7.

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2. Comprehensive upgrade of the security system Measures specific actions: External audits of new code conducted by multiple agencies, with multiple audits carried out as business develops. Strengthening simulated attack-defense drills. Early warning and monitoring upgrades to real-time monitoring systems to enhance attack defense capabilities. Community participation Core code is fully open source + establishment of white hat vulnerability reward programs. Ecosystem collaboration to share vulnerability experiences and assist in enhancing the overall security of the Sui ecosystem.

4. Future development plan

  1. Product and ecosystem reconstructionShort-term focus: Restart the aggregator (has resumed considerable trading volume), launch new features (such as stablecoin exchange pool, dynamic market maker DMM).

    Long-term direction: Expand asset issuance (Launchpad, Meme assets).
    Optimize algorithm models (reduce slippage, increase LP yields).
    Bound to the Sui ecosystem: As an infrastructure protocol, deeply benefits from the growth of the Sui ecosystem (accounted for 70% of Sui chain trading volume before the incident).

  2. Community and governanceTransparency commitment: Regularly publicizing progress, strengthening multilingual community support, and maintaining good communication with the community.

  3. Market strategyAdmit insufficient previous promotion, will increase investment in Chinese and English markets in the future, strengthening brand building.

5. Team commitments and responsibilities

  1. Core commitmentNo exit, no abandonment: Team morale has been restored, fully committed to reconstruction.
    Responsibility: Fully responsible for vulnerabilities in self-developed code, refusing to issue new assets as 'promises' for compensation.
    Long-termism: Even without token incentives, continue operating through protocol revenue, responsible to all users.

  2. Key challengesRebuilding trust: Reputation must be restored through long-term security practices.
    Debt repayment pressure: Sui Foundation loans must be repaid with protocol revenue (expected to take several years).
    Market competition: Competitors may seize shares during the suspension, but the Cetus community is strong, and the team is confident in its future combat effectiveness.

6. Controversy focus and team response

  1. Decentralization controversyDoubt: Does freezing funds through on-chain voting violate decentralization?
    Response: In extreme cases, protecting user assets is prioritized, and governance voting is a 'necessary and transparent consensus.'

  2. Sustainability of governance questionedDoubt: How to guide the DAO after the team's tokens become worthless?
    Response: Relying on community cohesion, the team participates in proposals as members and gradually relinquishes power.

  3. Reflection on security responsibilitiesSelf-criticism: Over-reliance on external audits, neglecting business logic vulnerabilities.
    Improvements: Establish an internal risk control system and deeply analyze financial logic risks.

Summary: Continue to take responsibility during the crisis.

Cetus views this hacking incident as a turning point for 'thorough reform':

  • Short-term goal: Quick restart, full compensation, and repair security shortcomings.

  • Long-term value: Relying on the growth of the Sui ecosystem, through product innovation (such as FQ low-fee aggregator) and DAO governance transformation, reshape into a more transparent, community-driven protocol. The growth of Sui has not yet reached its ceiling, and the future market share of Sui is likely to multiply several times.

  • Key information: Team 100% token compensation + Sui Foundation backstop, user assets prioritized, no exit, no abandonment.