Sui Ecology Decentralized Trading and Liquidity Protocol Cetus Protocol Restarts Operations After $220 Million Hack, Plans for Open Source Development
Sui Ecology Decentralized Trading and Liquidity Protocol Cetus Protocol, which suffered a hacker attack of approximately $220 million in May this year, has now restarted its platform operations and plans to move towards open-source development.
On May 22, hackers exploited a pricing mechanism vulnerability to steal a large number of tokens from Cetus’s main liquidity pool. Shortly thereafter, the protocol successfully froze $162 million of the stolen funds. Before the attack, Cetus had seen a rising trend in trading volume, with total trades exceeding $5 billion in both April and May.
Related report: Decentralized Exchange Cetus Reportedly Hacked, Losses Exceeding $200 Million
In an article published on June 7, the day before the platform’s restart, the Cetus team stated that they are moving towards complete open-source development and simultaneously launching a new white-hat reward program to encourage community contributions in technology and security.
Part of the Restart
As part of the restart, the team stated they have been “working day and night” to patch the software vulnerabilities that led to the attack, restore the liquidity pool data to correct prices, and conduct security audits on all code patches and contract upgrades. Additionally, Cetus plans to upgrade the protocol’s monitoring system and conduct further rounds of security audits.
Cetus Compensation Plan
The affected liquidity pools will be compensated through a $7 million cash reserve, a $30 million USDC loan provided by the Sui Foundation, and some assets recovered from the attackers. However, not all affected pools will be able to fully recover. According to the Cetus team, the current recovery rate is between 85% and 99%, depending on the extent of damage to each pool.
As part of the user compensation plan, Cetus stated that it will use its native token CETUS to compensate for the losses in liquidity, with 15% of the token supply allocated to the compensation contract (including all unvested tokens remaining with the team, accounting for 10% of the total supply), of which 5% will be available for immediate withdrawal after the platform restarts, while 10% will be unlocked linearly on a monthly basis over the next year starting from June 10.
According to data from CoinGecko, the CETUS token has fallen by more than 50% since the hacking incident, with a trading price of approximately $0.113 at the time of writing.
Continuing to Trace Hacked Funds
Cetus stated that it is still taking legal action and has initiated legal proceedings in “multiple jurisdictions,” with law enforcement agencies “actively involved.” The team stated: Data source
