Key Takeaways

• Cetus Protocol relaunched on June 8th, 2025, following a severe exploit on May 22nd, 2025.

• Achieved a liquidity recovery rate between 85% and 99%.

• The recovery was made possible through $37 million in combined funding from the Sui Foundation and Cetus reserves.

• A 15% token-based compensation plan was introduced, with 5% immediately unlocked and the remaining 10% vesting over 12 months.

• Early community feedback is positive, indicating restored confidence and optimism for future growth.

Cetus Protocol’s Path To Recovery

Backed by a combination of $30 million USDC from the Sui Foundation and $7 million from its internal reserves, Cetus has introduced a robust compensation and recovery plan, aiming to restore user trust and operational stability.

Cetus Announcing They’re Back Online

Source: X (@CetusProtocol)

As a critical DEX in the Sui ecosystem, Cetus faced a major setback in May 2025 when a significant security breach led to a sharp decline in liquidity. In a proactive move, the development team secured funding and rapidly designed a recovery plan.

What Does The Relaunch Entail?

The newly launched version restores access to core features, including:

• Liquidity management.
• Reward claiming.
• Trading and pool operations.

One of the most significant updates involves the platform’s compensation plan for affected users. According to the official statement from the Cetus team:

“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 10th, 2025.”

This token distribution plan has been designed to maintain liquidity while ensuring equitable compensation over time.

Community Response & Confidence Building

Initial reactions from the Cetus community have been largely positive. Many users and developers praised the team’s transparency and swift response. Forums and social media reflect a growing sense of optimism regarding the platform’s trajectory.

The structured compensation mechanism and immediate feature availability have played key roles in restoring user confidence. By allowing liquidity providers to reclaim and manage positions right from the relaunch, Cetus reinforces its commitment to its user base.

Broader Market Context & Industry Impact

Historically, DEXs that suffer exploits typically see their TVL recover within two quarters, provided effective compensation and enhanced security measures are introduced.

Cetus Announcing The May 22nd Hack

Source: X (@CetusProtocol)

In the case of Cetus, early indicators suggest a promising recovery. According to Coincu Research, the incident may spur long-term innovations in protocol security, not just for Cetus, but for the broader DeFi space.

The event also highlights the importance of community engagement, which many believe will be a driving force behind Cetus’ expected stable growth moving forward.

What’s Next For Cetus Protocol?

The coming months will be pivotal. With the compensation plan in motion and core functionality restored, the protocol is now focusing on:

• Strengthening security infrastructure.
• Enhancing community governance.
• Broadening developer engagement on Sui.

Long-term, Cetus aims to evolve into a more resilient and scalable DEX, reinforcing its strategic role within the Sui blockchain ecosystem.

FAQ

What happened to Cetus Protocol in May 2025?

On May 22nd, 2025, Cetus was targeted by a major exploit that drained a significant portion of its liquidity. The team quickly responded with recovery measures, including securing external funding and relaunching the protocol.

How is user compensation being handled?

Cetus introduced a 15% token allocation for compensation. Of this, 5% is available immediately, and the remaining 10% will be released gradually over a year starting June 10th, 2025.

Is it safe to use Cetus Protocol now?

Yes. The core functionalities including trading, liquidity provision, and reward claiming have been restored. The team has also emphasized enhanced security protocols to prevent future breaches.

What impact does this have on the Sui ecosystem?

Cetus is a foundational DeFi protocol within the Sui ecosystem. Its successful relaunch not only boosts user trust but also enhances Sui’s overall credibility as a blockchain platform focused on innovation and security.