Sui Foundation Throws Lifeline to Cetus: $223M Exploit Victims to be Fully Compensated

Loan Secured to Cover Stolen Funds Bridged Off Sui Network

Hang onto your hats, crypto fans! The Sui Foundation just stepped up big time, offering a secured loan to help decentralized exchange Cetus make things right with users rocked by a jaw-dropping $223 million exploit. In a fiery statement dropped on X on May 27, the foundation declared they're ready to back Cetus to cover the funds the hacker sneakily bridged out of the Sui network before the validators slammed the brakes on their wallets. Cetus is all in, ready to mix this loan with their own stash to hook affected users up with full refunds - but there's a catch. They need the community to greenlight a vote to thaw those frozen funds.

Cetus Apologizes, Calls for Community Support

Not backing down, Cetus hit back with their own statement, owning up to the mess and begging the Sui community to rally behind the recovery vote. "We're geared up to cover every cent of those stolen assets currently chilling off-chain," the team roared, "but only if the locked funds get the thumbs up in the upcoming community vote."

Details of the $223M Exploit Unveiled

Let's dive into the nitty-gritty. On May 22, Cetus got slammed with a slick exploit that zeroed in on a chink in their concentrated liquidity market maker contracts. The crafty attacker took advantage of some unchecked math in a third-party code library and pulled off some wild price manipulation using a flash swap. Boom! They drained multiple pools, faking liquidity deposits and swiping real tokens over and over again.

Despite the validators' heroic efforts to freeze $162 million on-chain, the hacker still managed to slip a hefty chunk of those stolen assets over to Ethereum. Those bridged funds? That's what the current compensation plan is all about.

Market Impact and Sui Foundation's Broader Response

This hack sent shockwaves through the market, tanking the CETUS token by a whopping 40% and leaving it still down 20% in the last week. The total value locked on the Sui network took a hit too, plummeting from $2.13 billion to $1.77 billion, according to DefiLlama data.

Even though the bug was in Cetus' code and not Sui's core setup, the Sui Foundation isn't just standing by. They're stepping up to the plate, recognizing their role in keeping the whole ecosystem safe. Alongside the loan, they're throwing down an extra $10 million to fund audits, bug bounties, and fancy formal verification tools.

And get this - they're not stopping there. To lure white-hat hackers to sniff out vulnerabilities before the bad guys do, they're expanding their bug bounty program to include high-rollers like Cetus, with over $50 million in TVL.

Community Reactions and the Road Ahead

While the validators' lightning-fast moves helped keep things from spiraling out of control, the community's got mixed feelings. Some are worried that freezing wallets goes against the very soul of blockchain's decentralization. Others are cheering the quick thinking and open handling of the crisis.

Cetus isn't wasting any time. They're gearing up to drop a detailed recovery plan any day now. And listen up - compensation efforts are kicking off no matter what the vote decides, but getting every last penny back hinges on whether the community steps up to unfreeze those remaining funds.