On May 22, 2025, the blockchain community was shocked when Cetus Protocol, a DeFi platform on the Sui network, was hacked, losing $260 million. This incident led to significant financial repercussions and sparked a debate on decentralization, a fundamental concept of blockchain technology.

Shortly after the hack, Cetus took action by pausing its smart contracts to prevent further losses. Although this move aimed to mitigate the situation, some experts argued that it contradicted the essence of decentralization, a key principle of blockchain technology. Jesus Martinez, founder of Legion, claimed that this event proved that Sui was not truly decentralized.

While some supported Cetus and Sui's response, others like Duo Nine, founder of YCC, pointed out that decentralization might just be a marketing term for many projects apart from Bitcoin and Ethereum.

Doubts about Sui's decentralization had surfaced earlier when Justin Bons, founder of CyberCapital, alleged centralization in May 2024, stating that the founders controlled 84% of staked tokens. Despite Sui's response denying founder control over the treasury or investor tokens, concerns persisted, especially after the Cetus hack.

This incident reignited the debate on centralized control within blockchain networks, with various projects facing similar controversies in the past, such as Ethereum's DAO hack in 2016 and Solana's need for validator consensus to address issues.

The balance between security and decentralization continues to challenge projects like Sui, raising questions about the future of decentralization in the crypto space. The incident highlighted the fragile trust in decentralization within blockchain technology.