Cetus Protocol Resumes Operations After $220M Exploit, Announces Security Enhancements

Cetus Protocol, a decentralized exchange native to the Sui blockchain, has resumed operations following a significant exploit that occurred in May. The exploit, which targeted a flaw in the pricing mechanism, resulted in the loss of approximately $220 million from Cetus' major liquidity pools. The protocol was able to freeze $162 million of the stolen funds shortly after the attack, but the incident has prompted a series of measures to enhance security and transparency.

In response to the exploit, Cetus Protocol has announced plans to transition to an open-source model. This move is aimed at encouraging collective technical and security contributions from the community. The protocol has also introduced a new white bounty program to incentivize users to identify and report vulnerabilities. The team has worked diligently to patch the software vulnerability, restore pool data to the correct pricing, and conduct security audits on all code fixes and contract upgrades.

To replenish the affected liquidity pools, Cetus utilized a combination of $7 million in cash reserves, a $30 million USDC loan from the Sui Foundation, and some of the recovered assets from the attacker. However, not all affected pools were fully restored, with the current recovery rate ranging from 85% to 99%, depending on the extent of the drain during the attack.

As part of a compensation plan for affected users, 15% of the protocol’s native token supply, CETUS, has been set aside. Of this, 5% is available immediately, while the remaining 10% will be linearly unlocked every month over the next year, starting from June 10. This plan aims to provide some financial relief to users who were impacted by the exploit.

Cetus Protocol has also announced plans to upgrade its protocol monitoring system and conduct additional rounds of security audits. Legal action is still being pursued, with legal proceedings launched in multiple jurisdictions and law enforcement agencies actively involved. The protocol remains confident in its ability to recover the remaining assets and bring the attacker to justice.

The exploit has had a significant impact on the Cetus token, which has seen a 12% drop in value since the protocol relaunch. Despite this setback, Cetus Protocol is taking proactive steps to enhance its security measures and rebuild trust within the community. The transition to an open-source model and the introduction of a white bounty program are positive steps towards achieving these goals.

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