Sui, the popular Layer-1 blockchain that specializes in merging Web3 with Web2, is bystanding a breach in one of the most popular decentralized exchanges (DEXs). Cetus, a DEX platform native on the SUI chain, saw a $300 million hack, with the hacker drastically draining the DEXโs liquidity.
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Prominent crypto figures, such as Binance founder Changpeng โCZโ Zhao, have stepped in to offer a helping hand for SUI network developers, who are still grappling with the $290M incident. The hacker got away with the loot to start converting it into Circle USD (USDC), a popular stablecoin.
Right now, the total value locked on SUI L-1 has slipped by 20.5% over the past 24 hours, pushing SUI network TVL below $2 billion. Cetus Protocolโs (CETUS) own token sunk 21.2%, while native meme coins like Double Up (UP), Slove (SLOVE) & LoFI (LOFI) slumped outrageously by at least 35% after the incident occurred.
What Really Happened On SUI Cetus DEX?
The official messages from Cetus Protocol on X suggest an Oracle bug. Then, the developer team immediately declared stopping all operations on the smart contract temporarily, citing safety reasons. Moreover, a more detailed announcement will be made soon, the team says one hour after the incident occurred.
However, the popular notion is that this wasnโt technical bug, but rather a deliberate attempt to drain all Cetus Protocolโs liquidity pools on SUI, utilizing a multi-step exploit method for the dirty trick, according to blockchain insight platform LookOnChain. Taking advantage of miscalculated SUI native token price curve or broken reserve math is one of the most likely options.
Digging into on-chain records, DailyCoin found out that the hacker cross-chained from SUI to Ethereum, laundering $60 million USDC in the process. Further on, the fraudster went all in on Ethereum (ETH), buying 21,938 ETH at an approximate price of $2,658. This crypto wallet now holds $8.6M worth of crypto, most of which in Ether, a competitor of SUI L-1 network.
On The Flipside
- Sui crypto native coinโs price witnessed a soft fall below 5% due to solid liquidity, but investors are in fear of a domino effect.
- The $260 million drainage had a positive impact on Ethereumโs (ETH) price, as the hacker converted everything into the altcoin.
Why This Matters
Security breaches of this magnitude could knock down the sentiment around the price of SUI, as well as evolve into a considerable liquidity crunch.
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