Cetus promises that all tokens will be used for compensation, the protocol restart countdown, and the foundation loan details must be kept confidential.

After facing a major security incident, the Cetus Protocol team chose to take full responsibility and announced that 100% of their $CETUS tokens would be used for compensation to the victims. In a several-hour-long AMA, Cetus co-founder Henry directly responded to various concerns, including the timeline for restarting, the compensation mechanism, governance plans, and future development direction.

Hacker Attack Incident Review: Over $200 million in assets compromised

On the evening of May 22, the Cetus protocol was attacked by hackers who exploited the open-source library vulnerability on which the contract depended, and built false prices and capital pools through Flashswap, adding or subtracting liquidity, and successfully stole more than $220 million in assets. About $60 million of this flowed into Ethereum through multiple cross-chain bridges, and the remaining $160 million was successfully frozen on-chain due to the team's rapid response and cooperation with Sui Validator.

After the incident broke out, the team quickly suspended contract operations, notified all ecosystem partners, contacted multiple security firms, and reported to the police. The reporting procedures in multiple countries have been completed, including in the United States and Singapore.

100% tokens are invested, and more than 85% of assets are recoverable

Regarding the compensation issues that users are most concerned about, the Cetus team has made it clear that the sources of compensation will come from protocol revenue, cash assets, and all $CETUS tokens held by the team. The compensation method adopts a multi-tiered mechanism, combining loans guaranteed by the Sui Foundation, deploying corresponding compensation contracts for different levels of loss.

Currently, it is estimated that 85.7% to 96% of the assets can be compensated directly. If the frozen assets can be recovered through legal means, the overall recovery rate is expected to approach full compensation. How to utilize the recovered assets in the future will also be decided by DAO voting, including whether to conduct buybacks, replenish the reserve pool, or give back to the community.

Foundation Loan Support Compensation Plan: Not the rumored 60 million, details are still confidential.

Regarding the details of the Sui Foundation loan that have attracted external attention, the Cetus team specifically clarified in the AMA: "The reported figure of 60 million USD is not accurate." The actual amount and conditions are still within the scope of a non-disclosure agreement (NDA) and cannot be disclosed externally. However, the team emphasized that a clear consensus has been reached with the foundation, and the loan will be part of the overall compensation mechanism, filling the gap of unrecovered assets and assisting the protocol in smoothly navigating the repair and restart phase.

As for whether it is an interest-free loan, whether $CETUS can be used as a repayment method, and other specific conditions, the team is currently unable to disclose. Henry stated that the role of this funding is more like a "bridge loan," assisting in providing liquidity support during the compensation phase. The agreement itself will still rely on cash assets, agreement revenue, and future earnings as the main sources of debt repayment, and there will be no issuance of new coins or dilution of user rights.

The team does not retreat: a quick rebound and restart after emotional collapse.

When asked if he had ever thought about giving up, Henry honestly stated that the team did face emotional breakdowns and anxiety-induced insomnia in the early stages of the incident, but they regrouped within 24 hours, and all members entered a state of relentless repair. He emphasized: "This is not a project that can be abandoned; this is a product we built from scratch, and we must take responsibility until the end."

The team has allocated 100% of the $CETUS tokens to the compensation plan, without retaining any internal distribution. In addition, if there are still profits from the protocol's revenue, future token buybacks will be conducted and included in the community-managed Treasury, with decisions on its use made by the DAO to ensure true decentralization.

Agreement restart countdown: Fully online within 24 hours.

The CETUS protocol has entered the countdown phase for rebooting, and it is expected to complete all frontend and LP functionality restoration within 24 hours. Before the reboot, three key tasks will be completed: historical transaction data recovery, liquidity injection, and security testing. Once everything is completed, the official launch time will be announced immediately.

In addition, the team is committed to enhancing security, including comprehensive open sourcing, establishing a white hat reward system, and creating an internal risk control system to prevent similar vulnerabilities from occurring again.

Expanded scope of compensation: covers direct users and indirectly affected agreements.

Henry stated that this incident affected not only CETUS users but also many protocols integrated with its infrastructure. Therefore, the compensation plan will also include these indirectly impacted parties, and the subsidies will be confirmed individually through a registration process to determine the scope and amount.

Regarding the source of the vulnerability, Henry admitted that it was a logical flaw in the product design rather than a single contract vulnerability. In the future, they will fundamentally strengthen the verification of the economic model and the ability to simulate extreme attacks.

DAO governance is not affected by token zeroing; revenue will support the agreement's sustainability.

In response to the concerns about how to maintain operational and governance capabilities after the "token emptying", the Cetus team provided data: the average monthly revenue of the protocol over the past six months reached 1.5 million USD, annualizing over 18 million USD, demonstrating that even without relying on tokens, the protocol itself still possesses a robust cash flow.

DAO governance will continue to operate, and Cetus will gradually release governance rights to the community. Although short-term earnings for $xCETUS stakers may decline, there is still hope for a return to a stable dividend mechanism in the medium to long term as revenue recovers.

Not just restoration, but reconstruction: a comprehensive upgrade of market strategy, user confidence, and ecological relationships.

The team stated that this crisis is not only a security issue but also a comprehensive test of brand, trust, and business model. Future strategies will include:

Focusing on new assets, new narratives, introducing blue chips, Meme, and GameFi;

The technical layer continues to iterate, maintaining the leading position of products on Sui.

Enhance interaction with the community and external promotion to expand brand awareness.

At the same time, Cetus also plans to introduce a Launchpad to support new projects, designing innovative incentive mechanisms to continuously advance the Chinese and international markets.

Facing mistakes, choosing to take responsibility: this is not crisis management, but a true self-redemption.

Henry believes that the choice of full compensation is not out of pressure, but rather a moral responsibility towards the agreement and the community. "Our motivation comes from our understanding and participation in the Sui ecosystem, not the tokens in our hands."

In the future, Cetus will no longer rely on Token prices for support, but will use protocol revenue and product competitiveness as the cornerstone of long-term operations. It also plans to establish more preventive security mechanisms to promote the more robust development of the entire Sui ecosystem.

This article promises that Cetus will use all tokens for compensation, the countdown for the protocol restart, and the details of the foundation's loan must be kept confidential. First appeared in Chain News ABMedia.