Sui Ecosystem’s Remarkable Recovery: 4 Leading Protocols After $223M Security Incident

Comprehensive Sui blockchain ecosystem landscape Source: Medium

Overview of the Cetus Security Incident and Impact on Sui Ecosystem

May 22nd became a dark day in Sui ecosystem history when Cetus – the leading decentralized exchange (DEX) – suffered a devastating attack with damages reaching $223 million USD. This event not only shocked the community but also triggered severe consequences:

• Total Value Locked (TVL) on Sui network plummeted from peak $2.1 billion to $1.57 billion
• 25% TVL decline in a short timeframe
• Massive capital outflow from the ecosystem
• User confidence severely impacted

Cetus Protocol: Swift Response and Recovery Plan

Emergency Measures Deployed

Upon discovering the incident, the Cetus team acted with lightning speed:

• Asset Freezing: Collaborated with Sui validator nodes to freeze two main wallet addresses used by attackers
• Comprehensive Audit: Coordinated with Sui security team and independent audit organizations
• Compensation Commitment: Invested $7 million in private reserves + borrowed $30 million from Sui Foundation

Impressive Recovery Roadmap

June 8th: Cetus officially resumed operations with:

• Restored 85%-99% liquidity of affected pools
• Committed to using 15% of total tokens for user compensation
• 5% immediately claimable, 10% linear unlock over 12 months

Cetus $223M security incident analysis Source: Merkle Science

4 Leading Protocols Driving Sui Ecosystem Recovery

1. Momentum Protocol: Breaking Ground with ve(3,3) DEX Model

Momentum stands out as the first DEX implementing native ve(3,3) mechanism on Sui, creating market differentiation:

Impressive Achievements

• Current TVL: Over $89 million USD (all-time high)
• Total trading volume: More than $3.6 billion USD
• Cumulative users: Over 420,000 users
• New funding round: Led by OKX Ventures, with Coinbase Ventures participation

Competitive Advantages

• veMO governance token with voting incentives mechanism
• Users receive trading fee shares through asset locking
• Encourages long-term participation and protocol governance

2. Turbos Finance: “Safe Haven” During Crisis

Turbos demonstrated superior stability during the challenging period:

Superior Security Architecture

• Modular design: Functional modules operate independently
• Minimizes systemic risk technically
• Unaffected by Cetus vulnerability
• Continuous operation throughout the crisis

Comprehensive Security Validation

Turbos invited leading audit organizations:

• Mysten Labs
• OtterSec
• MoveBit
• CertiK

Result: No vulnerabilities found affecting normal operations.

Attracting New Capital Flow

• Multiple mainstream Memecoins migrated liquidity to Turbos
• LOFI and other projects trust the platform’s stability
• Launched incentive pools for SUI-USDC and USDT-USDC

3. Bluefin Protocol: Leading On-Chain Derivatives Market

Bluefin solidifies its position in decentralized derivatives trading:

Products and Technology

• Perpetual contracts with high transparency
• On-chain matching engine and settlement
• Optimized trading efficiency, reduced slippage
• Suitable for high-frequency traders and hedge strategies

Stable Performance

• Maintained stable trading operations during crisis
• Continued expanding user base and product portfolio
• Plays crucial role in derivatives market on Sui

4. Kai Protocol: Automated Asset Management

Kai Protocol brings intelligent asset management solutions:

Key Features

• Automated strategy management on-chain
• Asset allocation services and yield aggregation
• Auto-reinvestment and risk adjustment
• Reduces complexity for end users

Target Users

• Suitable for investors seeking stable returns
• Low-involvement investment approach
• Diverse strategy portfolio for different risk preferences
• Stable TVL growth with quality user base

DeFi TVL recovery trend analysis Source: DailyCoin

Recovery Data Analysis and Future Trends

Impressive Recovery Metrics

Sui Network TVL Recovery:

• From: $1.57 billion USD (lowest point)
• To: $1.92 billion USD (current)
• Recovery rate: Nearly 90% compared to pre-incident levels

Success Factors

• Protocol Diversification: 4 protocols with different orientations
• Superior Security: Proven technical architecture
• Rapid Response: Effective crisis management
• User Trust: Gradual recovery over time

Conclusion: Sui Overcomes “Black Swan Event”

The Cetus $223 million incident became a rigorous test for the Sui ecosystem’s resilience. Instead of collapsing, the ecosystem demonstrated:

• Strong adaptability in the face of crisis
• Diversity and quality of protocols
• Community spirit and cooperation
• Long-term vision overcoming temporary difficulties

With the leadership of Momentum, Turbos, Bluefin, and Kai Protocol, the Sui ecosystem not only recovered but became stronger, ready for a new development phase. User confidence is gradually warming up, and Sui is steadily emerging from the shadow of the “black swan” event toward a promising future.