Cetus Protocol
Cetus is a decentralized exchange (DEX) and concentrated liquidity protocol operating on the Sui and Aptos blockchains. Its primary function is to facilitate on-chain trading by providing liquidity infrastructure and trading tools for various digital assets [1] [2].
Overview
Cetus aims to establish a flexible and robust underlying liquidity network to simplify trading for users and assets within the decentralized finance (DeFi) ecosystem [1] [2].
The protocol focuses on enhancing trading experiences and improving liquidity efficiency through its concentrated liquidity model and a suite of interconnected functional modules [2]. It is designed with a permissionless standard, allowing users and other applications to utilize its protocols for various use cases, such as setting up trading pools or allocating incentives [2].
The protocol is built on the concept of "Liquidity As A Service," emphasizing ease of integration for developers and applications to access liquidity [2] [1].
This composability allows for the creation of various products on top of the Cetus infrastructure, including liquidity vaults, derivatives, and leveraged farming [2]. New projects can integrate the Cetus SDK to quickly set up swap interfaces and access market liquidity [2].
Cetus utilizes a Concentrated Liquidity Market Maker (CLMM) model, which allows liquidity providers to supply liquidity within specific price ranges [3] [1]. This approach is intended to improve capital efficiency compared to traditional AMM models [3].
The protocol also incorporates features like programmable trading strategies, enabling users to execute complex orders similar to those on centralized exchanges [2].
Key Features
Cetus offers several core features designed to enhance the trading and liquidity provision experience:
- Swap: Allows users to exchange one digital asset for another on-chain [1] [4].
- Infinity Pools (CLMM): Permissionless liquidity pools based on the concentrated liquidity market maker model. These pools support multiple fee tiers and allow liquidity providers to specify price ranges for their liquidity [1] [3].
- Cetus Vault: A feature designed to automate and optimize liquidity management within Infinity Pools, aiming to make concentrated liquidity provision more accessible [1].
- Intent Trading: Enables users to place advanced order types, offering flexibility and control over transactions. This includes features like Dollar-Cost Averaging (DCA) and Limit Orders [1] [5].
- Super Aggregator: Aggregates liquidity from various sources within the Sui ecosystem to provide users with potentially better swap prices [1].
- Asset Launch (Launchpad): A platform designed to support new projects in the Sui ecosystem by providing tools for token launches and initial market introduction [1].
- Liquidity Mining & Farming: Incentivizing modules to encourage users to contribute liquidity to pools [1] [6].
Technology
Cetus is built as a CLMM-based DEX protocol [1]. The core technology revolves around concentrated liquidity, which allows liquidity providers to allocate their capital to specific price intervals rather than across the entire price range [3].
This is intended to increase capital efficiency and potentially earn higher fees within the active price range [3].
The protocol's smart contracts are designed to be open-source and permissionless [1] [2]. This architecture supports programmability, allowing for the creation of complex trading strategies and liquidity provision tactics [2]. Composability is a key aspect, enabling other decentralized applications to integrate with Cetus to access its liquidity and build new products [2].
Cetus operates on the Sui and Aptos blockchains [2].
Tokenomics
Cetus employs a dual-token system consisting of CETUS and xCETUS [1] [7] [8]. This system is designed to provide incentives to active participants through protocol earnings [1] [2].
CETUS
$CETUS is the native utility and governance token of the Cetus protocol. It is a cryptographically secure, fungible token used within the platform, primarily earned through liquidity mining. [7]
CETUS functions as a medium of exchange between participants in a decentralized manner, enabling secure transactions within the Cetus ecosystem without intermediaries. It is not intended as a general-purpose currency or as payment for goods or services outside of Cetus. CETUS does not confer ownership, voting rights, or entitlement to profits or returns from Cetus, its distributors, or affiliates, and is not classified as a security in any jurisdiction. [7]
The token’s role is limited to use within Cetus. Its market value is independent of the efforts of Cetus contributors, and there are no mechanisms in place to manage or influence secondary market pricing. [7]
CETUS also serves as an incentive mechanism, rewarding users who actively contribute to the ecosystem through usage and participation. These incentives are distributed based on a user's activity level, transaction volume, and engagement. Passive holders or non-participants are not eligible for these rewards. The incentive structure is designed to encourage ongoing contribution and sustain ecosystem growth. [7]
xCETUS
To promote decentralized community governance for the network, Cetus would allow holders to propose and vote on governance proposals to determine future features, upgrades and/or parameters of Cetus, with voting weight calculated in proportion to CETUS staked (which is then converted to non-transferable xCETUS, an escrowed governance token, to represent voting power). [8]
The right to vote is restricted solely to voting on features of Cetus; it does not entitle CETUS/xCETUS holders to vote on the operation and management of the Company, its affiliates, or their assets or the disposition of such assets to token holders, or select the board of directors or similar bodies of these entities, or determine the development direction of these entities, nor does CETUS/xCETUS constitute any equity interest in any of these entities or any collective investment scheme; the arrangement is not intended to be any form of joint venture or partnership. [8]
Users can get xCETUS by directly converting CETUS tokens, or through participating/contributing to the protocol (e.g. providing liquidity). [8]
In addition to governance utilities, CETUS functions as a loyalty membership point which embeds a license granting active participants exclusive access to selected products or services.
By holding the staked version (xCETUS), users may upgrade their loyalty tier (based on the amount of xCETUS held, as well as user activity). The premium loyalty tiers would allow users to get greater access to the ecosystem features and more preferential terms, for example certain premium functionalities, exclusive products/services, or greater or more unique transaction rewards. [8]
Audits
The Cetus platform has undergone security audits by multiple firms [1]. Auditors mentioned include MoveBit, OSEC, and Zellic. Audit reports are publicly available [9].
Major Events & Controversies
On May 22, 2025, Cetus was affected by an incident that resulted in significant asset drainage [10]. The exploit, which involved a fake token draining liquidity, was reported to have caused losses around $220 million [11]. On-chain data indicated rapid asset movement [10]. Initial reports and on-chain analysis suggested potential losses exceeding $200 million [10] [12]. The Cetus team acknowledged the incident, stating that a "bug" was detected and the smart contract was paused for safety while an investigation was ongoing [10]. Following the incident, Cetus officially relaunched on June 8, 2025 [11], restoring over 50% of its peak total value locked (TVL), reaching around $120 million [11].
However, some analysts and firms raised concerns regarding the characterization of the event as merely a bug, citing the speed and scale of the fund transfers [10]. Onchain data service Onchain Lens reported that "the attacker gained control of all SUI-denominated pools, exploiting over $200M, and has also started moving $USDC." [10]
Following the incident, Cetus managed to freeze approximately $162 million of the affected funds. The protocol subsequently offered a white hat bounty of up to $6 million to the exploiter for the return of the remaining stolen assets, including over 20,920 ETH. The offer was embedded in a blockchain transaction [13].
The response to the incident also involved discussions regarding the Sui network's capabilities and decentralization. GitHub activity showed consideration by the Sui team for implementing an emergency whitelist function that could potentially override transactions to recover funds [13].
While validators reportedly held off deploying this specific code, they were denying transactions involving the exploiter's objects [13]. This action sparked debate within the community regarding the balance between emergency response and the principles of a permissionless decentralized network [13].
Pseudonymous crypto sleuth Matteo commented on the situation, stating, "This is what real world decentralization looks like. Not just powerless, but responsive and aligned with the community," adding that decentralization "isn’t about standing by while people get hurt, it’s about the power to act together, without needing permission." [14]
Cetus Seeks Sui community Approval to Unlock $162M
On May 27, 2025, Cetus proposed unlocking 162 million CETUS tokens from its community treasury to compensate users affected by a recent exploit. The breach, which occurred due to a vulnerability in a third-party smart contract on the Sui network, resulted in over $1.9 million in user losses.
Cetus emphasized that the fault did not lie in its core protocol and assured users that its primary systems remained secure. [15]
The proposal outlines distributing the unlocked CETUS tokens proportionally to affected users, aiming to make them "financially whole."
The decision on the token unlock was put to a community vote, highlighting Cetus’s commitment to decentralized governance. The team also noted that the incident has prompted a review of third-party integrations and smart contract dependencies to prevent similar occurrences in the future. [15]