Can a decentralized chain simply… freeze your funds

[ad_1] “Okay, why is actually all people and their mother speaking about Sui proper now?”

If that’s you - hey, you realize we obtained you. Let's put an finish to the ache of being unaware:

Yesterday, the Sui blockchain skilled the largest DeFi hack of 2025.

A hacker stole $223M from Cetus, the most important DEX aggregator on Sui.

FYI: that is about 94% of what the platform had in complete worth locked (TVL) the day earlier than. So yeah, fairly huge deal.

"However... how?", stated you, perhaps.

Like I stated - don't be concerned, we obtained you.

The attacker exploited a flaw in Cetus’ good contracts - and in line with HackenProof CTO Alex Horlan, that is how the entire thing went down:

Step 1. Making a rubbish token look helpful

The attacker made their very own token - only a nugatory coin known as BULLA.

Now, on most DEXs, costs are set by what number of cash are sitting in a pool. If there’s plenty of BULLA and solely somewhat SUI (a legit token), the system assumes BULLA have to be actually helpful - as a result of it thinks it takes plenty of BULLA to purchase just a bit SUI.

So the hacker dumped tons of BULLA into the pool and added only a little bit of SUI. Now the pool’s worth math was tricked: it thought 1 BULLA was price plenty of SUI, when actually, it was rubbish.

Step 2. Organising a faux liquidity pool

Subsequent, the hacker used BULLA to create a brand new liquidity pool - this time including virtually nothing to it, simply sufficient to set it up.

When somebody begins a brand new liquidity pool, they get LP tokens in return. These LP tokens are like a receipt displaying what p.c of the pool you personal, and later you'll be able to commerce them in to get your share of the actual tokens within the pool.

However the system nonetheless thinks the faux token is tremendous costly, so when the attacker provides a tiny little bit of it into the pool, it treats that like a large deposit. Consequently, the hacker will get an enormous variety of LP tokens - far more than they really deserve.

Step 3. Money out

Now armed with these LP tokens, the hacker begins eradicating liquidity - exchanging their LP tokens for actual tokens from the pool.

As a result of the system’s math is damaged from the sooner trick, it lets them preserve pulling out actual cash - time and again - though they barely put something actual in to start with.

I do know. Loopy stuff.

And the end result was a multitude:

Craaaazy stuff.

Cetus scrambled to reply:

Paused all good contracts to forestall extra harm;

Teamed up with the Sui Basis and froze round $162M of the hacker’s funds. Sadly, the hacker had already bridged about $60M over to Ethereum;

Supplied a white hat bounty - as much as $6M - if the attacker returns the Ether.

Which feels like a fairly strong response.

However many individuals went like, “Uhhh… pause. Sui can freeze funds?”

Yeah, if somebody can simply halt transactions, it feels rather a lot like the standard banking system. And for a community that calls itself decentralized, that’s an enormous pink flag.

Then again, individuals like crypto sleuth Matteo identified that what occurred wasn’t centralized management - it was decentralization in motion.

In accordance with him, Sui validators from everywhere in the world independently coordinated to cease a recognized malicious pockets. Nobody gave orders, nobody needed to ask permission. They simply selected to behave.