Sui Foundation Loans Funds to Cetus Protocol After 40% Token Drop

The Sui ecosystem has recently experienced a significant shift in momentum following the Sui Foundation's decision to loan funds to Cetus Protocol. This move comes after Cetus Protocol suffered a substantial oracle manipulation attack, which resulted in a sharp drop in token prices and significant outflows from the platform. The incident, which involved exploiters deploying spoof tokens to distort price data, led to a 40% decrease in the value of CETUS tokens and prompted at least $63 million to be bridged to Ethereum.

In response to the attack, Cetus Protocol announced that it would use its treasury reserves to fully cover user losses. The Sui Foundation has backed this effort by providing a secured loan to expedite the compensation process. This financial support from the Sui Foundation has been instrumental in stabilizing the ecosystem and restoring investor confidence.

The bullish momentum in the Sui ecosystem is further evidenced by the consolidation of SUI prices in a bullish pattern. This pattern, which has been observed amid the resurgence of crypto FOMO traders, suggests a potential reversal from an extended downtrend. The recent rebound from April lows indicates that the market is showing signs of recovery, which could be attributed to the positive developments within the Sui ecosystem.

The Sui Foundation's intervention in supporting Cetus Protocol highlights the broader commitment to the ecosystem's stability and growth. By providing financial assistance, the foundation has demonstrated its dedication to protecting users and maintaining the integrity of the platform. This proactive approach is likely to foster a more resilient and trustworthy environment for investors and users alike.

The overall impact of these developments on the Sui ecosystem is positive, as it signals a renewed focus on security and user protection. The swift response to the oracle manipulation attack and the subsequent financial support from the Sui Foundation have helped to mitigate the damage and restore confidence in the platform. As the ecosystem continues to evolve, these measures are expected to contribute to its long-term sustainability and growth.

Following the announcement, SUI price gained over 5 percent in the past 24 hours to trade about $3.68. The announcement also positively impacted the Cetus Protocol, whereby CETUS price rallied over 17 percent in the past 24 hours to trade at about $0.1527. The Sui community will undertake an on-chain vote in the next seven days to decide whether to recover the stolen funds. The Sui network has prepared an on-chain vote involving the users and validators to ensure transparency and retain users’ trust. The community will be voting on whether to undertake a network upgrade to recover the $162 million stolen by the hacker but was frozen on-chain.

From a technical analysis standpoint, SUI price has been preparing for a bullish continuation in the past three weeks. Furthermore, the large-cap altcoin, with a fully diluted valuation of about $36.8 billion, has established a macro-rising trend since late 2023. In the daily timeframe, SUI price has been consolidating in a falling symmetrical channel, potentially a bullish continuation pattern. Following today’s bullish rebound, from the lower border of the falling symmetrical channel, Sui price is well positioned to rally towards a new all-time high in the near term.