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Cetus: Concentrated Liquidity on Sui

Cetus is the largest decentralized exchange (DEX) on the Sui blockchain, offering concentrated liquidity market maker (CLMM) functionality similar to Uniswap V3. Built on Sui's high-performance infrastructure, Cetus enables liquidity providers to deploy capital efficiently within custom price ranges while benefiting from ultra-low transaction costs and near-instant finality.

Important Note: Cetus experienced a significant exploit on May 22, 2025 (~$223M), but has since recovered with full user reimbursement and resumed operations. See the Security & Risks section below for details.

🧠 Why Use Cetus?​

Cetus brings concentrated liquidity to Sui, allowing LPs to maximize capital efficiency:

  • Concentrated liquidity: Deploy capital within specific price ranges for higher fee yields
  • Ultra-low fees: Sui's minimal transaction costs enable frequent rebalancing without gas eating profits
  • Fast finality: Near-instant transaction confirmation allows real-time position management
  • Deep liquidity: As the largest DEX on Sui by TVL, Cetus offers the deepest liquidity pools
  • Multiple fee tiers: Choose from various fee structures (0.01%, 0.05%, 0.3%, 1%) based on pair volatility
  • Aggregator integration: Cetus Plus routes trades through the best liquidity across Sui

🛠 How to Provide Liquidity​

Step 1: Connect Your Wallet​

Visit Cetus.zone and connect a Sui-compatible wallet (e.g., Sui Wallet, Ethos Wallet).

Step 2: Select a Pool and Range​

Choose from available pools (e.g., SUI/USDC, SUI/USDT) and select your price range:

  • Tight range: Higher fees but requires active monitoring
  • Wide range: Lower fees but more passive
  • Full range: Traditional AMM-style, lowest capital efficiency

Step 3: Deposit and Monitor​

Deposit both assets in your chosen range. Your position is represented as an NFT, allowing for easy tracking and management. Monitor your position regularly to ensure it stays within range.

📊 Strategy Considerations​

Active vs Passive LPing​

Active LPing on Cetus:

  • Use tight ranges (e.g., ±5-10% around current price)
  • Monitor positions daily or weekly
  • Rebalance when price drifts outside range
  • Higher potential yields but more time-intensive

Passive LPing on Cetus:

  • Use wider ranges (e.g., ±30-50% around current price)
  • Less frequent monitoring needed
  • Lower yields but more hands-off
  • Good for long-term holders

Fee Tier Selection​

Fee TierBest ForExample Pairs
0.01%Stablecoin pairsUSDC/USDT
0.05%Low volatility pairsSUI/USDC (stable)
0.3%Medium volatilitySUI/ETH
1%High volatilityNew tokens, meme coins

⚠️ Security & Risks​

May 2025 Exploit​

On May 22, 2025, Cetus suffered a significant exploit of approximately $223 million. The attack involved:

  • Attack vector: Spoof tokens were introduced into liquidity pools, manipulating pricing logic and oracle systems
  • Impact: Approximately $162 million was frozen on-chain, with the remainder moved across chains
  • Response:
    • Protocol contracts were paused immediately
    • Sui Foundation provided $30M USDC emergency loan
    • Community governance vote approved using frozen funds for reimbursement
    • Full user reimbursement achieved through combined efforts
  • Recovery: Protocol relaunched with enhanced security measures; liquidity pools restored to ~85-99% of pre-hack levels

What this means for LPs:

  • The exploit demonstrates both the risks of DeFi and the ability of Sui's governance to respond to crises
  • Full reimbursement shows strong ecosystem support, but highlights smart contract risk
  • Enhanced security measures have been implemented post-exploit
  • Consider this history when evaluating risk tolerance

General Risks​

  • Impermanent Loss: Concentrated liquidity positions are more susceptible to IL if price moves outside your range
  • Smart Contract Risk: Despite audits, exploits can occur (as demonstrated in May 2025)
  • Protocol Risk: Cetus is a newer protocol on a newer chain - less battle-tested than Ethereum counterparts
  • Liquidity Fragmentation: Lower volume pools may offer minimal or zero returns
  • Centralization Concerns: The ability to pause contracts and freeze funds raises decentralization questions, though it enabled recovery

🎯 Best Practices​

  1. Start with stable pairs: SUI/USDC is a good entry point with lower volatility
  2. Use wider ranges initially: Learn the system before deploying tight ranges
  3. Monitor regularly: Check positions weekly at minimum, daily for tight ranges
  4. Diversify: Don't put all capital in one pool or range
  5. Understand the exploit history: Be aware of the May 2025 incident and enhanced security measures
  6. Track volume: Use DeFiLlama to monitor pool activity
  7. Consider insurance: For large positions, consider smart contract insurance options

🧰 Tools & Resources​

  • Cetus App: cetus.zone - Main interface for LPing and trading
  • DeFiLlama - Sui: defillama.com/chain/Sui - Track TVL, volume, and protocol metrics
  • Sui Explorer: suiexplorer.com - Explore transactions and network activity
  • Cetus Analytics: Monitor pools, fees, and positions through the Cetus interface

📈 Current Status​

As of 2025:

  • TVL: Recovered to significant levels post-exploit (check DeFiLlama for current)
  • Status: Active and operational after May 2025 recovery
  • Liquidity: Major pools restored; protocol functioning normally
  • Security: Enhanced measures implemented post-exploit

🔗 Related Resources​

Summary​

Cetus is the leading DEX on Sui, offering concentrated liquidity with ultra-low fees and fast finality. While the May 2025 exploit was significant, the protocol's recovery and full user reimbursement demonstrate strong ecosystem support. For LPs comfortable with the risks of a newer protocol on a newer chain, Cetus offers attractive opportunities - especially for active managers who can monitor positions and rebalance ranges.

Key Takeaway: Cetus enables efficient LPing on Sui, but the exploit history requires careful risk assessment. Start small, monitor actively, and understand that even with enhanced security, smart contract risk remains.