Sui's Controversial Cetus Rescue Plan

The Sui blockchain is facing intense scrutiny for supporting a controversial proposal by DeFi platform Cetus Protocol to recover $162 million in frozen assets. This decision follows a May 21st incident where Cetus lost over $223 million to hackers.

Sui's Support Raises Decentralization Questions

Following the hack, over one-third of Sui validators froze some stolen assets by refusing to process transactions from wallets linked to the attacker. Cetus offered the hacker a $6 million bounty to return the remaining funds, a move widely criticized as insufficient by the community. Cetus is now proposing a protocol upgrade to recover the frozen funds without altering the blockchain's historical records or reversing transactions.

While presented as a compromise, this approach has ignited a debate about the integrity of Sui's decentralization. The Sui Foundation supports an on-chain vote on the proposal but maintains a neutral stance, abstaining from participation. The Foundation also insists Cetus exhaust all financial resources to compensate affected users before repaying losses.

“Earlier today, Cetus called for a community vote on a protocol upgrade to return the frozen funds, without rolling back chain history or reversing transactions. This is an extraordinary request in response to extraordinary need–Cetus’s customer funds are at stake. After consideration, we support their call for an on-chain vote,” Sui stated.

Critics argue that even without chain reversal, freezing smart contracts is problematic and that censoring transactions undermines blockchain immutability.

Sui's Bounty Offer Under Fire

The Sui Foundation's $5 million bounty for information leading to the hacker's identification has also sparked controversy. Blockchain investigator ZachXBT deemed the bounty "vague" and unhelpful, highlighting the significant upfront investment required by investigators that isn't covered by such offers.

Yu Xian, co-founder of SlowMist, added that unless the hacker cooperates or faces external pressure, investigations often result in prolonged, unproductive chases.

“The investment cost of tracking services is very uncertain... If there is no upfront cost or deep enough cooperation resources to guarantee, it is difficult to continue to advance,” Xian added.

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