Hack
Cetus Hack: Is the SUI Ecosystem Doomed?
The biggest DeFi hack of 2025 just hit. And it's shaking an entire blockchain ecosystem.
What happened? Cetus is the largest DEX aggregator on Sui got hacked. Their smart contract had a vulnerability. And on Thursday, a hacker stole $223M from them.
For context, Cetus only had $238M in TVL on the day before, according to DefiLlama. So this is a big hit.
The result was a bloodbath. If blockchains were countries, this was a missile strike on the capital.
- USDC on Sui depegged to zero.
- Several memecoins & tokens paired to SUI crashed 70-90%.
- Since the pools were drained, users couldn't even make swaps & cut losses. Later team also paused the contract.
- On May 21st, TVL on Sui was close to ATH at $2.1B. Right now, it's only $1.69B. They lost ~20% of their TVL.
Cetus was in a very bad situation. And they did what they could in the situation.
- Paused its smart contracts to prevent further losses
- Worked with SUI Foundation to freeze the hacker funds.
But it wasn't perfect, ~$61 was already bridged to Ethereum. Now, hacker has full control over those funds.
Now here's where things get spicy. The Sui Foundation froze around $162 million of the stolen funds. Sounds good, right? Not really.
Censorship-resistance is the key property of blockchains. Every single person on the world, irrespective of their background, should be able to transact on the chain.
SUI only has ~114 validators, and they're connected to the foundation. So SUI Foundation & validators were able to freeze hacker funds by not processing his/her transaction.
It was almost like freezing a bank account. Except... this is crypto. That's not how it's supposed to work.
If the SUI Foundation has control over transactions on its network, it isn't a "real" blockchain anymore. It'll be like a centralized database with extra steps.
It'll also attract a lot of legal responsibilities. Governments will be able to order the foundation to freeze accounts of its enemies. They can't say "oh.. we can't control transaction on the network." anymore.
This hack also tarnished their "security" narrative.
Sui community had marketed their chain as the "safest" to build. The narrative was that projects on Sui won't get hacked like EVM projects. This hack is a huge blow to that narrative.
Now, SUI is not doomed. We can defend SUI's actions, too.
Firstly, a single hack can't be used to judge a programming language forever. Move might be more security-friendly language.
On the freezing of the hacker assets, it was the correct decision.
If the SUI Foundation can prevent millions from going to hackers (potentially to states like North Korea), they should prevent it.
(Ideally, they shouldn't be able to do it even if they wanted to. But it is what it is. Their claims for decentralization won't be accepted by many people anymore.)
While this looks like the end of the world, Sui will be able to recover.
Other major chains had also faced similar situations in their past. Ethereum had DAO Hack. Solana had multiple outages and SBF disaster.
While this might look like the end of the world for SUI, it probably isn't. If the team keeps building, if the ecosystem holds together — Sui can recover. Others have. They just need to prove they can weather the storm.
Sponsored by Gearbox
Gearbox: Yield, Leverage, and Simplicity in One Platform
A friend asked me the other day,
"Edgy, where are the good yields in DeFi? Everything feels capped."
He's right. Most yield pools are overcrowded. APYs are shrinking. Everything's been picked clean.
But Gearbox changes the game.
Think of it like Shopify for DeFi leverage. You deposit into a lending pool, and instead of tapping shared markets, you spin up your own isolated Credit Account (CA)
Your CA becomes your control center. You can:
With this framework, Gearbox can access opportunities other platforms can't, like rlUSD on Convex, Llamathena on Curve, and Sky Rewards on SkyEcosystem.
The result? Gearbox's TVL just passed $200m. People weigh simplicity over complicated stuff.
No need to create 100 new markets to support 100 new assets. One lending pool, many markets. Zero chaos.
Updates
Cookie.DAO: The New Matchmaker in CT?
In crypto, money follows attention.
Crypto projects want to attract attention. Last week, Cookie launched a way for projects to attract attention.
What's Cookie DAO? It describes itself as "a modular data layer for humans and AI agents".
Beneath the fancy words, it was a data analytics platform for AI Agents. Kinda like DefiLlama, but purely for AI Agents. They had the ability to track social data like mindshare, sentiment, and top opinion leaders on specific topics.
But this was before. Now, they've extended their social data collection ability to the whole of crypto. And they've multiple services.
- An API service for agents & builders to access their massive 7TB of real-time onchain and social data feeds.
- A data platform where analysts can see onchain & social data about ~all projects and top influencers. Previously, this was limited to AI Agent data.
- Currently, the Cookie DAO Agents have a view-only terminal. In Q2, they'll make it interactive, unlocking deep research and analytics.
- They've also launched a new matchmaking service where crypto projects can find creators who promote their projects and reward them.
The Matchmaking Service
It connects projects and creators. Creators get paid to talk about the projects they're excited about. And projects can incentivize the narratives they want.
As part of this service, Cookie has announced Open Leaderboards: every token/project with its own mindshare leaderboard. This is in contrast to Kaito, where specific projects have to deal with the Kaito team to get a leaderboard.
To reward the creators, they've launched the SNAPS. When you join, it's a referral program where creators can invite other creators to earn points.
After joining, creators can earn SNAPS by tweeting as well. But Cookie gives more projects more control over the points.
All projects have leaderboards called "Top Voices", it's a generic leaderboard without any customization. The 'SNAPS campaign' Leaderboards are different. It scores creators based on the requirements made by the project core team. This allows them to promote the specific narrative the projects want.
Spark Finance has already launched a campaign. Creators can talk about Spark to earn Spark SNAPS, which will be used to reward them.
To recap the SNAPS program, you'll get points from two sources: referrals and project campaigns.(When a new creator joins, they also get initial SNAPS, which seems to be tied with his/her existing influence.)
The InfoFi Play
InfoFi includes all the projects that use crypto & finance to improve our information ecology (or just Twitter for now).
Until now, Kaito was the only serious competitor in the sector. And this narrative is hot right now, $KAITO has pumped 135% in the last 30 days.
Now, $COOKIE has emerged as a good beta play for the narrative. $KAITO has a market cap is >$500M & the FDV is >$2B. In contrast, $COOKIE market cap is only >$145M & the FDV is only >$282M. So $COOKIE has more room to run.
(Cookie has pumped 73% in the past 7d)
Kaito's software runs around $833 a month. Cookie has made a few of the features free and accessible to all, so people are pretty excited about that.
As the InfoFi narrative gains steam, Cookie is positioning itself as the underdog alternative to Kaito.
If money truly follows attention in crypto, Cookie may be one of the most interesting bets on the board.
🚀 DeFi Catalysts
Kraken is launching tokenized versions of US-listed equities on Solana. They've partnered with Backed for the launch of xStocks.
Succinct announced sub-slot proving of Ethereum blocks. This opens the way for Ethereum to scale 1000x using zk-proofs.
Jupiter, the leading DEX aggregator on Solana, has partnered with Fluid to create Jupiter Lend, which will use Fluid's technology.
DOGE, the top memecoin of the last cycle, is expanding to Solana using Wormhole's Native Token Transfer (NTT) framework.
World, the L2 from OpenAI's Sam Altman, sold $WLD worth $135M to Andreessen Horowitz and Bain Capital Crypto at market prices.
Solana Mobile is planning to launch its token called SKR. It'll launch the second version of the phone Seeker on August 4.
Farcaster now supports Solana. The wallet and mini-apps on the platform will work with Solana.
Rabby wallet has integrated HyperEVM. They've also announced that they won't support the extension on Firefox anymore.
Gravel launched a sandwich-resistant AMM on Solana. It's the first such AMM on Solana.
Circles went live. It's an experimental protocol that tries to create money using trust networks.
📰 Industry News
Ripple and Coinbase are in a bidding war over Circle. Many crypto natives are worried about the aftereffects of Ripple acquiring the USDC issuer.
US Big Banks held early talks on a joint crypto stablecoin. JPMorgan, Bank of America, Citigroup, and Wells Fargo seem to consider the possibility.
FIFA, the international governing body for football/soccer, is partnering with Avalanche to launch its own L1 chain.
Accelerate, a conference focused on the Solana ecosystem, will conclude today. Since the start on the 19th, there were many major announcements.
Texas House voted in favor of Senate Bill 121. It'll establish a Texas Bitcoin Strategic Reserve.
🐦⬛ X Hits
- The Pendle Thesis.
- Rumpel & point tokenization.
- Consumer crypto & Net New Assets.
- The attention engine thesis for Kaito.
- Behind the scenes of Perp DEX Vaults.
😂 Meme
Edgy
Today's email was written by Edgy and Yayya.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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