Cetus Protocol Relaunches After $220M Hack, Restores Liquidity

CN
12 hours ago

Cetus Protocol, a leading decentralized exchange (DEX) and concentrated liquidity market maker (CLMM) on the Sui and Aptos blockchains, has relaunched just two weeks after a sophisticated hack severely impacted its CLMM pools. To ensure the health of the affected pools, Cetus has replenished them with $7 million in mainstream assets from its treasury funds, along with a $30 million USDC loan from the Sui Foundation.

According to a statement announcing the relaunch, liquidity for users whose LP positions were in unaffected pools remains unchanged. However, for those in affected pools, the liquidity recovery rate now ranges between 85% and 99%, depending on the specific pool’s impact. These users’ liquidity provider (LP) functions will resume as normal, and their position NFTs will serve as certificates for claiming CETUS compensation, even if the liquidity is fully withdrawn in the future.

The protocol’s relaunch follows a hack that siphoned more than $220 million in digital assets after exploiting a vulnerability in an overflow check within the protocol’s liquidity calculation function. However, as reported by Bitcoin.com News and other media platforms, $162 million of the stolen funds were frozen following a joint action by validators.

Days after the attack, Cetus Protocol announced plans to conduct an on-chain vote to authorize the recovery of the frozen assets. It also revealed plans to offer the hacker(s) a reward for returning the funds or face legal action. However, in its latest update, Cetus stated that the bounty was not claimed, prompting the protocol to pursue legal action in multiple jurisdictions.

The protocol meanwhile said it will allocate a significant portion of its native CETUS tokens for compensation.

“We are allocating 15% of CETUS supply to the compensation contract, including the entirety of the team’s remaining unvested tokens, accounting for 10% of the total supply,” Cetus stated in the update.

Five percent will be immediately claimable at relaunch, with the remaining 10% linearly unlocked monthly over the next 12 months, starting June 10, 2025. This compensation plan ensures no additional inflation to the total supply and aims to foster a more community-driven ecosystem.

Any future recovered funds will be used to offer users the option to forfeit the remaining CETUS for USDC during the compensation period, repay the Sui Foundation loan, or—if the compensation period is over—conduct extensive CETUS buybacks and store them in the community treasury.

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