Solana Co-Founder Criticizes Sui's Response to $233 Million Hack

Solana co-founder Anatoly Yakovenko has entered the ongoing debate surrounding Sui’s governance and the true essence of blockchain decentralization. His comments come at a time when the Sui network is under scrutiny following the recent hack of the CETUS decentralized exchange (DEX). The hack has raised questions about the network's security and decentralization, prompting Yakovenko to offer his perspective on what constitutes true decentralization.

Yakovenko's intervention in the debate is significant because it comes from a prominent figure in the blockchain industry. Solana, the network he co-founded, is known for its high-speed transactions and scalability, making it a competitor to other blockchain platforms like Sui. Yakovenko's comments suggest that he believes the recent events surrounding the CETUS hack highlight the importance of decentralization in blockchain networks. He argues that true decentralization means that no single entity should have control over the network, and that the network should be resilient to attacks and hacks.

Yakovenko offered his distinct opinion on how blockchain users and developers should actually understand and measure the concept of decentralization. According to Yakovenko, a decentralization test should be objective rather than subjective. The Solana co-founder outlines standards that can determine whether a blockchain protocol is decentralized. For instance, Yakovenko stated that a blockchain solution cannot be decentralized if the minority group can unilaterally block the majority from making changes or functioning. On the contrary, the renowned blockchain expert condemned the situation where the majority can block the minority from exiting or forking its chain by withholding data or initiating an emergency upgrade on the bridge contract.

The CETUS hack, which resulted in the theft of a significant amount of cryptocurrency, has raised concerns about the security of the Sui network. The hackers were able to exploit a vulnerability in the network, allowing them to steal funds from the CETUS DEX. In response to the hack, the Sui network has rolled out a new "Whitelist" function, which allows users to whitelist certain addresses and prevent them from being used in future hacks. However, some users and analysts have criticized this move, arguing that it undermines the decentralization of the network by giving too much control to a single entity.

Yakovenko’s opinion appeared to criticize the action by the Sui team, following their intervention by altering the protocol after the infamous CETUS DEX exploit, where a hacker stole about $233 million from their liquidity pool. Shortly after the attack, the Sui team informed users about moves to prevent further fund theft. The Sui team stated that it locked its contract and confirmed that it paused the transfer of $162 million of the compromised funds. The team also noted that they are working with the Sui Foundation and other ecosystem members to resolve the issue. The team’s action triggered an argument within the blockchain industry, with stakeholders stating taking strong positions on the appropriateness of the actions. Cyber Capital founder Justin Bons sided with those disagreeing with the Sui team’s actions, citing the dangers of decentralization in a supposedly decentralized environment. Bons thinks Sui’s validators are colluding to censor the hacker’s transactions, which amounts to centralization.

On the other side of the debate, Sui Foundation’s Amogh Gupta disagrees with Bons’ opinion and those who consider the Sui team’s intervention a risky precedent. According to Gupta, the Sui team embarked on a legitimate exercise of distributed governance. Gupta stated that the validators’ acts of reaching an agreement over a particular event should not be considered “colluding.”

Yakovenko's comments on decentralization come at a time when the blockchain industry is grappling with the challenges of balancing security and decentralization. While decentralization is a key feature of blockchain networks, it can also make them more vulnerable to attacks and hacks. The CETUS hack highlights the need for blockchain networks to find a balance between security and decentralization, and Yakovenko's comments suggest that he believes the Sui network has not yet achieved this balance.

The debate surrounding Sui's decentralization is likely to continue in the coming weeks and months, as the network works to address the vulnerabilities that were exploited in the CETUS hack. Yakovenko's comments are a reminder of the importance of decentralization in blockchain networks, and the need for networks to find a balance between security and decentralization. As the industry continues to evolve, it will be important for blockchain networks to prioritize decentralization and security, in order to build trust and confidence among users.