Cetus Protocol Relaunches After $220 Million Exploit, Implements Major Security Overhaul
Sui-based DEX Cetus Protocol restores operations with 85-99% liquidity recovery following sophisticated mathematical attack
Quick overview
- Cetus Protocol successfully relaunched on June 8, just 17 days after a $220 million hack, demonstrating a remarkable recovery.
- The protocol implemented a three-part funding plan to restore liquidity pools, utilizing cash reserves, a loan, and frozen assets.
- Cetus has allocated 15% of its native CETUS token supply to compensate affected users, ensuring no additional token inflation.
- The team is enhancing security measures and moving towards an open-source model to improve transparency and safety in the DeFi ecosystem.
Cetus Protocol, a top decentralized exchange that runs on the Sui and Aptos blockchains, has successfully restarted barely 17 days after one of the biggest DeFi hacks of 2025. The protocol was fully operational again on June 8, which was an amazing recovery from the $220 million attack that happened on May 22.
Navigating the Aftermath: Exploit Details and Swift Response
The advanced attack took advantage of an integer overflow flaw in Cetus’ shared math library, focusing on the checked_shlw function. SlowMist, a company that specializes in blockchain security, said that the hacker used a “extremely sophisticated mathematical attack” to make a single deposited token look like it was worth millions of dollars. This let them drain big liquidity pools. The hacker had been getting ready for two days and even tried an earlier version of the exploit that didn’t work before successfully carrying out the deadly attack.
Even though the hack was huge, Cetus was able to freeze $162 million of the stolen money thanks to quick action by Sui network validators. This swift response was highly important for the protocol’s recuperation and eventual restart.
Cetus Protocol’s Recovery and Relaunch: A Multi-pronged Approach
To restore Cetus, a full three-part funding plan was used. The procedure used all of its $7 million in cash reserves, got a $30 million USDC loan from the Sui Foundation, and used the frozen assets it had recovered to fill up the liquidity pools that had been damaged. This combination has brought liquidity pools back to between 85% and 99% of their former prices. The exact amount depends on how much each pool was affected by the attack.
For users whose positions were in pools that weren’t affected, liquidity stays the same. But those who have positions in compromised pools will see their liquidity provider services return to normal. Their position NFTs will serve as proof that they can seek compensation through the protocol’s new CETUS token mechanism.
Cetus has set aside 15% of its native CETUS token supply for customers who were affected as part of an ambitious plan to pay them back. This includes all of the team’s unvested tokens, which make up 10% of the overall supply. Five percent of these tokens are available right away, while the other ten percent will become available over the next 12 months, starting on June 10. This pay scheme does not cause any more token inflation, which is important.
Since the incident, the protocol has made a lot of improvements to its security. The team did thorough security checks on all code patches and contract upgrades, fixed the security hole that was used, and restored pool data to rectify the pricing systems. Cetus wants to do more audits, improve its real-time monitoring systems, and start a new white hat reward program to get people in the community to help with security in the future.
The protocol is also making progress toward being fully open-source. This is a big change that is meant to promote openness and make the DeFi ecosystem safer for everyone.
What’s Next for Cetus Protocol?
Legal proceedings remain ongoing across multiple jurisdictions, and law enforcement agencies are working to catch the perpetrator. Even though Cetus offered a white hat bounty of up to $6 million for the return of stolen money, the attacker didn’t take them up on it and has started trying to launder the money using services like Tornado Cash. Cetus, on the other hand, is still sure that they will eventually get their assets back and catch the attacker. They point to the fact that blockchain transactions can be traced.
Even though Cetus had over $5 billion in trade volume in April and May before the exploit, the attack had a big effect on trading right away. The protocol’s native CETUS coin has lost almost 44% of its value since the day before the attack, and CoinGecko says it is now worth about $0.11.
The successful relaunch of Cetus is more than just getting things back to normal; it shows how strong decentralized finance protocols are and how they can bounce back from big security breaches with the help of the community, new funding options, and major security overhauls. “This restart means more than just a relaunch,” Cetus said in their announcement.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
