DeFi’s decentralization debate rages on after the Sui community voted to return the $162 million frozen during the Cetus exploit.
A $200 million-plus exploit targeting Cetus, a decentralized exchange on the Sui network, has reignited debate over decentralization in blockchain protocols after Sui validators collectively froze $162 million of the stolen funds.
Some decentralization advocates called foul, criticizing Sui validators’ ability to pause fund transfers on the blockchain as a sign of centralization. Other investors applauded the rapid response and coordination against the attackers.
Industry watchers are now waiting for Cetus to initiate its recovery roadmap after the Sui governance vote for returning the frozen $162 million was passed on May 29.
Sui community passes vote to repay $162 million to Cetus exploit victims
Sui validators approved a governance proposal to return $162 million in frozen assets linked to a recent exploit of the decentralized exchange Cetus, marking a key step toward full user repayment.
Cetus was exploited for over $220 million worth of digital assets on May 22, but validators managed to freeze $162 million of the funds shortly after the incident.
In a governance vote concluded on May 29, Sui validators passed the recovery proposal with 90.9% voting in favor, 1.5% abstaining and 7.2% not participating, according to the network’s official governance page.
“With this result, the impacted funds will be moved to a multisig wallet and held in trust until they can be returned to users according to the plan led by Cetus,” Sui said in a May 29 X post.
The decision follows debate within the crypto community over the role of validators in freezing onchain funds.
No more ETH dumps? Ethereum Foundation turns to DeFi for cash
The Ethereum Foundation (EF) has borrowed $2 million in GHO, a decentralized stablecoin developed by Aave, in a move signaling deeper engagement with decentralized finance (DeFi) strategies.
In a May 29 X post, Aave founder Stani Kulechov said the foundation borrowed $2 million in GHO tokens. “The EF is not only supplying ETH to Aave, but also borrowing from Aave,” Kulechov wrote, describing the development as “the full DeFi circle.”
GHO is a decentralized, overcollateralized stablecoin native to the Aave Protocol. Unlike centralized stablecoins, GHO is governed by Aave’s decentralized autonomous organization (DAO), which oversees interest rates, collateral requirements and facilitator selection.
The move highlights the EF’s growing engagement with the DeFi ecosystem, moving toward more sophisticated treasury strategies.
DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.
fell over 28% as the week’s biggest loser in the top 100, followed by the Pudgy Penguins (PENGU) token, down over 23% on the weekly chart.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
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