Cointelegraph: Cetus Protocol relaunches after $220M hack with 85-99% liquidity restoration and user compensation.

Cointelegraph: Cetus Protocol relaunches after $220M hack with 85-99% liquidity restoration and user compensation.

Cetus Protocol, a decentralized exchange, is set to relaunch following a significant security breach that resulted in the loss of approximately $220 million in assets. The protocol, which operates on the Sui blockchain, suffered a hack that exploited a vulnerability in a CLMM-dependent open source library, leading to the draining of assets from major pools and severe disruptions in pool prices and balances.

In response to the incident, the Cetus team has implemented a comprehensive recovery plan. Key steps taken include identifying and patching the vulnerability, working with Sui validators to retrieve quarantined assets, securing a dedicated recovery loan from the Sui Foundation, and conducting thorough security audits on all code fixes and contract upgrades. Additionally, the team has developed a new compensation contract to fairly address user losses.

The protocol is scheduled to be restarted at 3:00 UTC on June 8, 2025. After relaunch, users will regain access to full functionality, including swaps, managing LP positions, adding/removing liquidity, and claiming fees and rewards. The affected CLMM pools have been replenished using recovered assets, treasury funds, and a $30 million USDC loan from the Sui Foundation. The liquidity recovery rate for each pool now ranges between 85% and 99%, depending on the degree of attack.

To compensate for the liquidity loss, 15% of the CETUS supply has been allocated to a compensation contract. This includes the entirety of the team’s remaining unvested tokens, accounting for 10% of the total supply. The compensation tokens will be vested following a schedule that includes 5% immediately claimable at relaunch and 10% linearly unlocked every month over the next 12 months.

Despite the relaunch, the Cetus team remains committed to recovering the remaining unrecovered funds. Legal action has been initiated in multiple jurisdictions, and several law enforcement agencies are actively involved. The team is confident that successful arrest and recovery of the remaining assets is only a matter of time.

Looking ahead, Cetus Protocol plans to initiate additional comprehensive audits, upgrade its monitoring system, and move towards being fully open sourced. The team also intends to accelerate new product development and improve configurations for risk management.

The relaunch marks a renewal for the protocol, emphasizing a more secure, resilient, and user-friendly DeFi infrastructure for the Sui ecosystem.

References:
[1] https://medium.com/@CetusProtocol/cetus-relaunch-incoming-recovery-plan-and-the-road-ahead-9fc0f8bd5c41
[2] https://coingape.com/suis-cetus-protocol-unveils-recovery-plan-targets-june-8-relaunch/