In May 2025, the Web3 world experienced a thrilling hacking incident. The decentralized exchange CETUS was severely impacted due to a smart contract vulnerability, with approximately $223 million in user funds stolen, of which $63 million was transferred to the Ethereum network via a cross-chain bridge. This incident not only shocked the entire encryption community but also dealt a significant blow to the Sui ecosystem.

After the attack occurred, the Sui network quickly took action. The validator nodes blacklisted the hacker's address, effectively freezing part of the stolen funds. Subsequently, Sui initiated a series of recovery and compensation mechanisms. By the end of May, through on-chain governance voting, more than two-thirds of the validator nodes supported the relevant proposal. At the beginning of June, the protocol upgrade took effect, allowing the stolen assets to be legally recovered.

The CETUS team showed a responsible attitude in the face of the crisis. They announced that they would initiate a community vote to discuss whether to utilize protocol funds and apply for a loan from the Sui Foundation to fully compensate the victims. Regardless of the voting results, CETUS promises to immediately initiate the compensation process, demonstrating their commitment to user interests.

However, this incident had a significant impact on CETUS's market performance. After the attack, the price of CETUS tokens plummeted by 50%, falling to $0.12, with a market cap shrinking to $100 million. Although by July 2025, its price had slightly rebounded to $0.15, there are still divergences in the market regarding CETUS's long-term development prospects.

It is worth noting that despite such a significant blow, CETUS's core technological advantages still exist. Its centralized liquidity mechanism, similar to the innovations of Uniswap V3, allows liquidity providers to provide liquidity within specific price ranges, greatly improving capital efficiency. In addition, CETUS's proactive market-making algorithm can dynamically manage liquidity, effectively optimizing trading slippage and transaction fees.

This incident not only exposed the potential risks of decentralized financial systems but also highlighted the importance of community governance and rapid response mechanisms. As Web3 technology continues to evolve, finding a balance between innovation and security will be a persistent challenge for the entire industry. The future development of CETUS will serve as an important case study in observing how DeFi projects recover from crises and rebuild user trust.