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Cetus Protocol has successfully relaunched following a significant exploit, achieving an impressive liquidity recovery rate of up to 99%, signaling a robust rebound in the Sui ecosystem.
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The recovery was bolstered by a strategic $30 million USDC loan from the Sui Foundation alongside $7 million from Cetus’ reserves, enabling immediate restoration of trading and liquidity management functionalities.
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According to an official COINOTAG statement, “Cetus will allocate 15% of the tokens for compensation contracts, with 5% immediately available upon restart and 10% to be linearly unlocked over 12 months starting from June 10, 2025.”
Cetus Protocol restarts after exploit with up to 99% liquidity recovery, supported by a $30M loan from Sui Foundation, restoring trading and user rewards swiftly.
Cetus Protocol’s Strategic Relaunch and Liquidity Recovery
On June 8, 2025, Cetus Protocol officially relaunched at 9 AM (UTC+8), marking a critical milestone in its recovery journey after the May 22 exploit that severely impacted liquidity. The protocol’s team implemented a comprehensive compensation plan backed by a $30 million USDC loan from the Sui Foundation and an additional $7 million from internal reserves. This financial backing was pivotal in restoring between 85% and 99% of liquidity, a recovery rate that surpasses typical decentralized exchange exploit rebounds.
The relaunch prioritized immediate user access to core services, including trading capabilities, liquidity position management, and reward claims. This swift restoration of functionalities was essential to maintaining user confidence and stabilizing the protocol’s ecosystem. By enabling users to reclaim their positions and rewards promptly, Cetus demonstrated a commitment to transparency and operational resilience.
Compensation Plan and Community Engagement
Cetus’ compensation strategy involves allocating 15% of its tokens to affected users through a structured contract system. Of this allocation, 5% was made available immediately upon relaunch, while the remaining 10% will be unlocked linearly over the next 12 months starting June 10, 2025. This phased approach balances immediate relief with long-term sustainability, ensuring that the protocol can maintain liquidity while honoring its commitments.
The community response has been largely positive, with many users and developers applauding the transparency and thoroughness of the recovery plan. Public forums and social media channels reflect a growing trust in Cetus’ governance and operational protocols, which is critical for the protocol’s ongoing stability and growth.
Market Impact and Security Enhancements Post-Exploit
Historically, decentralized exchanges that experience exploits see a gradual recovery in total value locked (TVL) over two quarters, often regaining pre-exploit levels as security measures improve and user confidence returns. Cetus’ rapid liquidity restoration aligns with this trend but stands out due to the scale of the recovery and the proactive involvement of the Sui Foundation.
In response to the exploit, Cetus has announced plans to enhance its security infrastructure, including advanced auditing processes and real-time monitoring systems. These measures aim to mitigate future risks and reinforce investor confidence. Industry analysts suggest that such improvements are crucial for fostering deeper integration within the broader blockchain ecosystem and attracting institutional participation.
Technological Advancements and Long-Term Outlook
Research from Coincu highlights that incidents like the Cetus exploit often catalyze technological innovation in protocol design, particularly in the realm of security. The lessons learned are expected to drive the development of more resilient decentralized finance (DeFi) platforms, incorporating enhanced safety protocols and governance frameworks.
Looking ahead, Cetus’ ability to maintain community engagement and implement robust security enhancements will be key determinants of its sustainable growth. The protocol’s transparent communication and effective compensation plan set a precedent for how DeFi projects can navigate crisis recovery while preserving user trust.
Conclusion
Cetus Protocol’s relaunch after the May 2025 exploit demonstrates a strong recovery facilitated by strategic financial support and a well-structured compensation plan. With up to 99% liquidity restored and immediate access to trading and rewards, the protocol is poised to regain its position within the Sui ecosystem. Continued focus on security enhancements and community transparency will be essential to sustaining this momentum and fostering long-term resilience in the competitive DeFi landscape.
