CETUS PLANS FULL COMPENSATION TO AFFECTED USERS AFTER $223M HACK

- Cetus Protocol, built on the Sui blockchain, plans to fully reimburse users impacted by its recent exploit.

- The company will fund the compensation using its own reserves, token treasury, and a vital loan from the Sui Foundation.

- While the final reimbursement depends on this governance decision, Cetus confirmed it will start recovery efforts immediately after the vote results.

- The team promises a detailed plan to be published soon.

The Cetus Protocol Hack:

- The hack which took place on May 22 targeted vulnerabilities in Cetus’ concentrated liquidity market maker contracts.

- Multiple pools were drained by faking liquidity deposits and withdrawing real tokens using unchecked math in third-party code.

- The incident caused the CETUS token to drop 40% initially and remains down 20% over the past week.

- Although the bug originated in Cetus’ code, the Sui Foundation stepped in, offering a critical loan and committing an additional $10 million to strengthen ecosystem security.

- This funding will support audits, bug bounties, and formal verification tools.

- The foundation also plans to expand its bug bounty program to include high-value protocols like Cetus, aiming to prevent future exploits.

Validators Into Action:

- Swift action of validators helped contain the breach, but the community remains divided.

- Some criticize wallet freezes as contrary to blockchain’s decentralization ideals. Others commend the transparent response and recovery focus.

- Cetus’ compensation will proceed regardless of the vote, but unlocking frozen funds is essential for full restitution.

- The community’s decision in the coming days will determine the extent of recovery for those affected.

Image: Cetus X platform