Cetus LP Provider Drained of $11M Worth of SUI Tokens

Traders descended into a panic after LP provider Cetus appeared to be drained of $11 million worth of SUI from its liquidity pool. The team claimed it was an oracle bug, not an exploit.

LP provider Cetus appeared to be drained of $11 million worth of SUI from its liquidity pool as traders descended into a panic. The team claimed it was an oracle bug, not an exploit.

Cetus protocol has encountered an incident on its liquidity platform and has decided to temporarily halt their smart contracts to prevent any further losses. The team is investigating the root cause of the issue.

“A further investigation statement will be made soon. We are grateful for your patience,” said the protocol in its most recent post.

At around 11:00 UTC, traders observed that the liquidity pool for LP provider Cetus was being drained of tokens, ultimately reducing the token supply to zero. According to a screenshot shared online, tokens on the protocol’s leaderboard, including AXOL, SUIRI, HIPPO, and others, experienced a decline of 92% to at least 75% from their initial prices.

Currently, the platform remains inactive following the suspension of smart contracts, and all liquidity pools are displaying zero values for their trading pairs.

Despite online discussions about the liquidity drain and the ensuing panic, SUI (SUI) experienced modest gains. Over the past 24 hours, the token rose by 3.15%, reaching $4 per token. Its daily trading volume also increased by 112% from the previous trading day, reaching nearly $2.5 billion.

In the past month, the token has been on a steady rise, increasing by nearly 75%.

Some traders who are part of the Discord server for Cetus shared screenshots of messages from Cetus admins and developers. One member, known as Figure.Cetus, advised traders to stay calm and that the team will be making an announcement.

Figure.Cetus stated that the liquidity provider was not hacked, but rather the liquidity drain was caused by a bug within the liquidity provider’s oracle.

In crypto liquidity pools, oracles serve to connect the pool’s smart contracts to external data sources, such as real-world asset prices or market conditions. This enables the pool to accurately determine prices, execute trades, and perform other functions based on the external information it receives.

At the time of writing, the Cetus protocol team has yet to release an official statement regarding their investigations. Additionally, smart contracts remain temporarily suspended.