How a Single Line of Code Toppled Cetus Protocol: $230M Lesson in DeFi Security

When smart contracts fail, they fail spectacularly. Blockchain security firm SlowMist just dissected the $230M collapse of Cetus Protocol—and it all traces back to one overlooked vulnerability.

The exploit wasn’t some sophisticated zero-day attack. A mundane code flaw in the liquidity pool contract allowed attackers to manipulate price oracles, draining funds in a textbook economic attack. DeFi’s trillion-dollar promise keeps running into billion-dollar reality checks.

Security audits? Completed. Bug bounty program? Active. Yet critical vulnerabilities still slip through. This wasn’t a hack—it was the system working exactly as programmed, just not as intended. The immutable ledger giveth, and the immutable ledger taketh away.

As Cetus joins the growing graveyard of ’decentralized’ finance casualties, the real question emerges: When will protocols start pricing smart contract insurance into their APYs?

On May 22, something alarming happened in the sui blockchain world. Prices on the Cetus decentralized exchange (DEX) suddenly dropped, and its liquidity pools were drained. The total estimated loss was over $230 million.

That’s when SlowMist, a well-known blockchain security team, stepped in and launched an analysis of what they uncovered was both shocking and technical.

What’s the Real Problem?

According to SlowMist’s deep dive analysis, the Core of the issue was a vulnerability in Cetus’ smart contract code, specifically, a function called checked_shlw that failed to properly detect an overflow in another function named get_delta_a.

Now, what actually mean in simple terms?

This bug caused the system to calculate token amounts incorrectly. It didn’t realize when the numbers got too big, so it assumed the attacker was adding a huge amount of liquidity, when in reality, they only added 1 token.

That tiny flaw gave the attacker a massive opportunity.

How the Attacker Took Advantage

Here’s how the attacker carried out the exploit, step by step:

The attacker borrowed over 10 million haSUI tokens using a flash loan. This MOVE caused the token price in the pool to drop by 99.9%.

They then created a very narrow liquidity position — a tiny window in the price range — which made the system believe a huge amount of liquidity was being added.

Using the overflow flaw, they claimed to add trillions worth of liquidity, but only submitted 1 token. The contract didn’t catch the mismatch.

The attacker removed the fake liquidity in three stages and repaid the flash loan.

They walked away with 10 million haSUI and 5.7 million SUI, with almost no real investment.

SlowMist Warning To Defi Developers 

This incident shows how a small coding mistake can lead to huge financial losses, especially in DeFi platforms where smart contracts run everything. 

According to SlowMist, if a critical function like checked_shlw doesn’t correctly detect errors like overflows, attackers can break the system logic entirely.

SlowMist warns all DeFi developers to double-check their math functions, especially in areas involving token calculations and liquidity formulas. One unchecked line of code was all it took to let someone walk away with millions.