Firm Belief After a Security Crisis: Why SUI Still Has Long-term Rise Potential?

1. A chain reaction triggered by an attack

On May 22, 2025, the leading AMM protocol Cetus deployed on the SUI network suffered a hacker attack. The attacker exploited a logical vulnerability related to an "integer overflow issue" to launch a precise manipulation, resulting in a loss of over $200 million in assets. This incident is not only one of the largest security incidents in the DeFi space so far this year but also the most destructive hacker attack since the launch of the SUI mainnet.

According to the data, the total TVL of the SUI blockchain plummeted by more than $330 million on the day of the attack, with the locked amount of the Cetus protocol evaporating by 84% in an instant, dropping to $38 million. As a result, several popular tokens on SUI (including Lofi, Sudeng, Squirtle, etc.) fell by 76% to 97% within just one hour, triggering widespread concern in the market regarding the security and ecological stability of SUI.

However, in the wake of this shockwave, the SUI ecosystem has demonstrated strong resilience and recovery ability. Despite the Cetus incident causing fluctuations in confidence in the short term, on-chain funds and user activity have not experienced a sustained decline; instead, it has significantly increased the entire ecosystem's focus on security, infrastructure development, and project quality.

We will analyze the reasons behind this attack incident, the node consensus mechanism of SUI, the security of the MOVE language, and the ecological development of SUI, sorting out the current ecological pattern of this public chain which is still in its early stages of development, and discussing its future development potential.

2. Analysis of the Causes of the Cetus Incident Attack

2.1 Attack Implementation Process

According to the technical analysis of the Cetus attack incident, hackers successfully exploited a critical arithmetic overflow vulnerability in the protocol, using flash loans, precise price manipulation, and contract flaws to steal over $200 million in digital assets in a short period of time. The attack path can be roughly divided into the following three stages:

①Initiate flash loans, manipulate prices

The hacker first utilized a maximum slippage flash exchange of 10 billion haSUI to take out a large amount of funds for price manipulation.

Flash loans allow users to borrow and repay funds in a single transaction, only requiring a fee, characterized by high leverage, low risk, and low cost. Hackers took advantage of this mechanism to drive down market prices in a short period and precisely control them within a very narrow range.

The attacker then prepared to create an extremely narrow liquidity position, precisely setting the price range between the lowest quote of 300,000 and the highest price of 300,200, with a price width of only 1.00496621%.

By the above methods, hackers successfully manipulated the haSUI price using a sufficient amount of tokens and huge liquidity. Subsequently, they also targeted several tokens with no actual value for manipulation.

② Add Liquidity

The attacker creates a narrow liquidity position, claims to add liquidity, but due to a vulnerability in the checked_shlw function, ultimately only collects 1 token.

This is essentially due to two reasons:

1. The mask is set too wide: equivalent to a huge liquidity addition limit, resulting in the validation of user input in the contract being virtually meaningless. Hackers bypassed the overflow detection by setting abnormal parameters that construct inputs always smaller than this limit.

2. Data overflow was truncated: When performing the shift operation n << 64 on the numeric value n, data truncation occurred because the shift exceeded the effective bit width of the uint256 data type (256 bits). The overflow portion of the high bits was automatically discarded, resulting in a computation significantly lower than expected, causing the system to underestimate the amount of haSUI needed for the exchange. The final computed result was approximately less than 1, but due to rounding up, it ended up being equal to 1, meaning the hacker only needed to add 1 token to exchange for a large amount of liquidity.

③Withdraw liquidity

Repay the flash loan while retaining huge profits. Ultimately withdraw token assets worth hundreds of millions of dollars from multiple liquidity pools.

The situation of fund loss is serious, and the attack has resulted in the following assets being stolen:

• 12.9 million SUI (approximately 54 million USD)

• 60 million USDC

• 4.9 million USD Haedal Staked SUI

• 19.5 million USD TOILET

• Other tokens like HIPPO and LOFI have dropped 75-80%, and liquidity has dried up.

2.2 The causes and characteristics of this vulnerability

The vulnerability of Cetus has three characteristics:

1. The cost of fixing is extremely low: on one hand, the root cause of the Cetus incident is a flaw in the Cetus mathematical library, not an error in the protocol's pricing mechanism or underlying architecture. On the other hand, the vulnerability is limited to Cetus itself and is unrelated to the SUI code. The root of the vulnerability lies in a boundary condition check, and only two lines of code need to be modified to completely eliminate the risk; once the fix is complete, it can be immediately deployed to the mainnet to ensure the subsequent contract logic is complete and eliminate this vulnerability.

2. High concealment: The contract has been running smoothly without any faults for two years since its launch and has undergone multiple audits, yet no vulnerabilities were found. The main reason is that the Integer_Mate library used for mathematical calculations was not included in the audit scope.

Hackers exploit extreme values to precisely construct trading intervals, creating extremely rare scenarios with extremely high liquidity that trigger abnormal logic, indicating that such issues are difficult to detect through ordinary testing. These types of problems often lie in blind spots within people's vision, which is why they remain hidden for a long time before being discovered.

3. Not an issue unique to Move:

Move excels in resource safety and type checking over various smart contract languages, and it has built-in native detection for integer overflow issues in common scenarios. This overflow occurred because when adding liquidity, the wrong value was first used for the upper limit check when calculating the required number of tokens, and bit shifting operations were used instead of conventional multiplication operations. In contrast, if conventional addition, subtraction, multiplication, and division operations are used in Move, it will automatically check for overflow situations, preventing this high-bit truncation issue.

Similar vulnerabilities have appeared in other languages (such as Solidity, Rust), and are even more easily exploited due to the lack of integer overflow protection; prior to the updates in Solidity versions, the detection of overflows was very weak. Historically, there have been addition overflows, subtraction overflows, multiplication overflows, etc., all directly caused by the results of calculations exceeding the range. For example, the vulnerabilities in the BEC and SMT smart contracts of the Solidity language were exploited by carefully crafted parameters that bypassed the detection statements in the contracts, leading to excessive transfers and attacks.

3. SUI's consensus mechanism

3.1 Introduction to SUI Consensus Mechanism

Overview:

SUI adopts a Delegated Proof of Stake framework (DeleGated Proof of Stake, abbreviated as DPoS)). Although the DPoS mechanism can increase transaction throughput, it cannot provide the same level of decentralization as PoW (Proof of Work). Therefore, SUI's level of decentralization is relatively low, and the governance threshold is relatively high, making it difficult for ordinary users to directly influence network governance.

• Average number of validators: 106

• Average Epoch Cycle: 24 hours

Mechanism Process:

• Staking Delegation: Ordinary users do not need to run nodes themselves; they can participate in network security assurance and reward distribution simply by staking SUI and delegating it to candidate validators. This mechanism lowers the participation threshold for ordinary users, allowing them to engage in network consensus by "hiring" trusted validators. This is also a significant advantage of DPoS compared to traditional PoS.

• Represents round block production: A small number of selected validators produce blocks in a fixed or random order, which enhances confirmation speed and increases TPS.

• Dynamic Election: After each voting cycle ends, a dynamic rotation is conducted based on voting weight to re-elect the Validator set, ensuring node vitality, interest consistency, and decentralization.

Advantages of DPoS:

• High efficiency: Due to the controllable number of block-producing nodes, the network can complete confirmations in milliseconds, meeting high TPS requirements.

• Low cost: Fewer nodes participate in the consensus, significantly reducing the network bandwidth and computational resources required for information synchronization and signature aggregation. As a result, hardware and operational costs decrease, the demand for computing power decreases, and costs are lower. Ultimately achieving lower user transaction fees.

• High security: The staking and delegation mechanisms amplify the cost and risk of attacks simultaneously; combined with the on-chain confiscation mechanism, it effectively suppresses malicious behavior.

At the same time, in the consensus mechanism of SUI, an algorithm based on BFT (Byzantine Fault Tolerance) is used, requiring more than two-thirds of the votes among validators to reach a consensus in order to confirm a transaction. This mechanism ensures that even if a minority of nodes act maliciously, the network can remain secure and operate efficiently. Any upgrades or major decisions also require more than two-thirds of the votes to be implemented.

Essentially, DPoS is a compromise solution to the "impossible triangle" of decentralization, security, and scalability. DPoS chooses to reduce the number of active block-producing nodes in exchange for higher performance, sacrificing a certain degree of complete decentralization compared to pure PoS or PoW, but significantly enhancing network throughput and transaction speed.

3.2 The performance of SUI in this attack

Operation of the 3.2.1 Freezing Mechanism

In this incident, SUI quickly froze the addresses related to the attacker.

From a code perspective, it prevents transfer transactions from being packaged on the chain. Validator nodes are the core components of the SUI blockchain, responsible for validating transactions and executing protocol rules. By collectively ignoring transactions related to the attacker, these validators effectively implement a mechanism similar to 'account freezing' in traditional finance at the consensus level.

SUI itself has a deny list mechanism, which is a blacklist feature that can prevent any transactions involving listed addresses. Since this feature is already present in the client, when an attack occurs

SUI can immediately freeze the hacker's address. Without this feature, even if SUI has only 113 validators, it would be difficult to coordinate all validators to respond one by one in a short period of time.

3.2.2 Who has the authority to change the blacklist?

TransactionDenyConfig is a YAML/TOML configuration file loaded locally by each validator. Anyone running a node can edit this file, hot reload, or restart the node, and update the list. On the surface, it seems that each validator is freely expressing their values.

In fact, to ensure consistency and effectiveness of security policies, updates to this critical configuration are usually coordinated. Since this is a "pushed urgent update", it is essentially the foundation (or its authorized developers) that set and update this denial list.

SUI released a blacklist, and in theory, validators can choose whether to adopt it------but in practice, most people will automatically adopt it by default. Therefore, while this feature protects user funds, it does inherently have a certain degree of centralization.

3.2.3 The essence of the blacklist function

The blacklist feature is not actually a logic at the protocol level; it is more like an additional layer of security to respond to emergencies and ensure the safety of user funds.

Essentially, it is a security assurance mechanism. Similar to a "anti-theft chain" tied to a door, it is activated only against those who want to break into the home, that is, those who intend to maliciously manipulate the protocol. For users:

• For large holders, the main providers of liquidity, the protocol aims to ensure the safety of funds, because in reality, the on-chain data TVL is all contributed by major holders. To ensure the long-term development of the protocol, safety will undoubtedly be prioritized.

• For retail investors, contributors to ecosystem activity, and strong supporters of technology and community co-construction. The project party also hopes to attract retail investors to co-build, so as to gradually improve the ecosystem and enhance retention.