Sui Eco Decentralized Trading and Liquidity Protocol Cetus Protocol Resumes Operations Following $220 Million Hack
Cetus Protocol, which suffered a hack amounting to approximately $220 million in May this year, has now resumed 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 after, the protocol successfully froze $162 million of the stolen funds. Prior to the attack, Cetus had been experiencing an upward trend in trading volume, with total trading exceeding $5 billion in both April and May.
Related Report: “Decentralized Exchange Cetus Allegedly Hacked, Loss Exceeds $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 while simultaneously launching a new white-hat bounty program to encourage community contributions in technology and security.
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 the 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 fully restored. 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 program, Cetus stated it will use its native token CETUS to compensate for liquidity losses. 15% of the token supply will be allocated to the compensation contract (including all unvested tokens remaining with the team, which account for 10% of the total supply), of which 5% will be available for immediate withdrawal post-restart, and 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 over 50% since the hacking incident, with a trading price of approximately $0.113 as of the time of writing.
Continued Pursuit of 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 commented: Source of data