The Sui blockchain is facing increased scrutiny due to its support for a contentious proposal from the DeFi platform Cetus Protocol to retrieve $162 million worth of frozen assets. This decision comes after an incident on May 21 where Cetus lost more than $223 million to a hacker. In response, a significant number of Sui validators froze a portion of the stolen assets by not processing transactions linked to two wallets believed to be connected to the attacker.

The backing of Cetus's plan by Sui has raised concerns about the decentralization of the blockchain. Cetus aimed to recover the remaining funds by offering the hacker a $6 million bounty, which has garnered criticism for being insufficient from some community members.

Additionally, Cetus is advocating for a protocol upgrade to release the frozen funds without altering past blockchain records or reversing transactions. Although positioned as a compromise, this proposal has sparked discussions about the integrity of Sui's decentralization.

The Sui Foundation has agreed to support an on-chain vote but will remain impartial and refrain from participating actively. The foundation insisted that Cetus should use all available financial resources to compensate affected users until all losses are reimbursed.

Critics caution that freezing smart contracts, even without reverting the chain, could pose problems. They argue that censoring transactions might compromise the principle of blockchain immutability.

Furthermore, the Sui Foundation's decision to offer a $5 million reward has generated controversy. The reward aims to incentivize anyone providing information leading to the identification of the hacker. However, critics like on-chain investigator ZachXBT find the bounty vague and unhelpful, as it only pays upon success and disregards the significant upfront investment of time and effort by investigators.

Yu Xian, co-founder of blockchain security firm SlowMist, also criticized the offer, warning that without the hacker voluntarily returning the funds or being pressured to do so, investigators could end up in prolonged pursuits with little chance of resolution due to uncertain investment costs and necessary resources.