"Creator's Say" is a dialogue column launched by Foresight News, where we interview outstanding creators selected each month about market hot topics and compile their collected insights to gather diverse opinions and uncover deeper thoughts.
Written by: Foresight News May 2025 Outstanding Content Creator
Compiled by: Foresight News
In the world of blockchain, the game between decentralization and security has never stopped. Recently, the Sui project's transfer of $160 million in assets stolen by hackers has sparked intense community controversy. This incident not only exposed deep contradictions in project governance but also brought the pros and cons of the "regulated token" model and challenges to decentralization principles to the forefront.
This issue of "Creator's Say" focuses on the "Cetus Security Incident". We have invited outstanding creators from the Foresight News May 2025 list, including Mankun Blockchain Legal Services, Mint Ventures, WolfDAO, Fourteen Gentlemen, BTC_Chopsticks, Crypto Markets under Macroeconomics, Sanqing, and Clare Yang to join the discussion.
We posed four questions: "Do you support Sui's approach", "What problems does this incident expose in Sui", "How do you evaluate this regulated token model", and "Which is more important, decentralization or security". Below are the collected answers.
1. Sui directly transferred $160 million stolen by hackers through a network upgrade. Do you support Sui's approach? Why?
[The rest of the translation follows the same professional and accurate approach, maintaining the original structure and tone while translating to English.]Mint Ventures: The event itself is a contract issue with the Cetus protocol, and Sui does not have a direct problem. However, the actions of the Sui project team and validator community will bring derivative challenges in the future. For example, if the project team chooses to intervene this time, does it mean that they will also bail out in subsequent similar attack events? Or will official action only be taken when the amount and number of affected people reach a certain threshold? What is this threshold? Should thefts of tens or hundreds of millions of dollars be ignored? How would they then respond to users questioning, "Aren't our lost funds still money?" Moreover, even without theft, should the Sui project team and validators cooperate with potential government review requirements in the future (as this event has proven they have the ability to do so)?
[The rest of the translation follows the same professional and accurate approach, maintaining the original meaning while translating into clear English.]Why can USDT continue to develop? Because people only use it as a tool, and no one expects it to represent a belief. Moreover, for off-chain staking, its centralization is actually safer, which is why we see more proof of reserves from USDC. It converts its credit through the country and bank credit.
But for a public chain, if you want to pursue the "decentralization dream," you cannot simultaneously write a white paper about consensus and directly modify wallet balances through protocol upgrades.
Tools can have backdoors, but ideals cannot. Furthermore, this zero-cost solution easily becomes an industry example, which essentially makes it no different from bank financial services, so how can the blockchain system be superior?
BTC_Chopsticks: Regarding USDT's freezing function, despite regulatory intervention, it can still play a crucial role in the market, maintaining a relatively stable trading environment. The success of this model is closely related to its global acceptance and liquidity.
Crypto Market under Macroeconomic Conditions: First, I find it interesting that although this "regulated token" model has sparked many controversies and doubts in the crypto community, its market share continues to grow.
I personally think the reason might be: From a demand perspective, USDT, as a USD-pegged stablecoin, provides stability during market fluctuations, naturally attracting many users and traders. Moreover, USDT is currently used in almost all mainstream exchanges, forming a powerful universal effect that is hard to replace. Despite competitors like USDC and DAI, USDT maintains its dominant position through first-mover advantage and liquidity, and frankly, I think it's currently difficult to shake.
Regarding the "regulated token" model, while USDT's compliance makes it more acceptable to institutional investors and traditional financial institutions, especially in AML and KYC aspects, its freezing function essentially sacrifices DEX and censorship resistance. Our funds might be monitored and controlled by Tether, which I believe contradicts the original intention of blockchain.
Sanqing: I think these are fundamentally incomparable. USDT itself is a stablecoin issued by a centralized institution, with its operational model and responsibility boundaries clearly defined from the start. It is not "decentralized". The freezing function is actually USDT's contractual obligation as a "real-world mapping", a compliance with real-world regulatory and judicial rules. Everyone understands and accepts this as a regulatory compromise.
Sui is different. As a Layer1 public chain, it should bear the role of "blockchain underlying trust". If it can be artificially intervened, what meaning does decentralization have? USDT's continued growth is due to early market liquidity, extensive ecosystem support, comprehensive cross-chain bridges, and high real-world settlement efficiency, not because it can "freeze addresses".
Clare Yang: The impact of USDT's regulated token model is two-sided. Through its freezing function, it helps combat illegal activities, enhancing compliance and market confidence, which explains why USDT continues to be widely accepted and rapidly develop globally despite centralized control. After all, many users and institutions care more about stability and security than absolute decentralization. However, this also forces us to consider the contradiction between blockchain's decentralization ideology and real-world regulatory needs, and how to find a better balance in the future remains a significant challenge.
4. The Sui incident exposed the potential opposition between decentralization and security. Which do you think is more important?
Mankun Blockchain Legal Services: In the short term, security is more critical. If users lose money, the ecosystem collapses. In the long term, decentralization is indeed the soul of blockchain. Sui's regulated model is a good compliance attempt that other public chains can learn from. However, this requires transparent governance and stricter contract audits to reduce centralization intervention controversies and find a balance between security and decentralization.
Another perspective: Would traditional funds or "Old Money" be more willing to enter Web3 through a public chain that can protect assets and counter hacker attacks? I've heard an interesting speculation that RWA might see good development on Sui because of this.
This is not the first time people have discussed this topic. There was once a stance that led to the Ethereum Classic fork. Currently, if you pursue extreme decentralization, I would choose Ethereum. If you want better asset security, I think solutions like Sui are better. Decentralization is a means, not an end.
Mint Ventures: This question has no absolute answer. In reality, decentralization (censorship resistance, permissionless use) is one of the core promises of blockchain services. The so-called "security" is not an explicit promise (no chain openly commits to recovering stolen funds), with the only promise being "code is law". However, this doesn't mean the security brought by intervention has no value. The attractiveness of these service promises will change with circumstances, such as reduced US regulatory pressure when Republicans are in power, which might decrease the value of the "decentralization" promise.
WolfDAO: Security and decentralization are not naturally opposed, but technical limitations can create conflicts. In smart contracts after strict code audits, decentralization and security can be simultaneously achieved, with code reliability being the foundation for compatibility. However, with limited technical capabilities, merely relying on moral constraints on hackers is unrealistic - technical vulnerabilities need definitive security measures.
In the short term, security should take priority over decentralization because protecting user assets is the foundation of blockchain trust. Long-term, decentralization is the core value, and the two need dynamic balance. We must fortify the security line through technical audits while reserving space for the ultimate goal of decentralization.
Fourteen Jun: This question is like asking: "Is freedom more important, or stability?"
In the short term, security is of course important; everyone fears being hacked. But if we allow modifying account balances and transaction results for security - then blockchain becomes no different from traditional banks.
We use blockchain because it can do: "Even if you're a big shot, you can't touch someone else's coins."
If security is achieved by "sacrificing rules", those rules will eventually sacrifice you too.
So my answer is: Security is important, but not at the cost of abandoning decentralization.
The real answer is to design safer contracts and stricter standards, not repeatedly using governance as a safety net and treating code like a joke.
Let flowers be flowers, trees be trees, and shit be shit. A system without death is just false prosperity.
BTC_Chopsticks: The Sui incident highlights the challenges between decentralization and security. In the crypto world, security is always a priority, but decentralization principles are key to driving innovation and user control. Balancing these might require more rigorous security standards and effective governance frameworks.
Crypto Market Under Macroeconomic Conditions: I believe this needs to be viewed from short-term and long-term perspectives. From the SUI perspective, safety might be more critical in the short term, but long-term development requires strengthening decentralization commitments to ensure narrative persuasiveness. Safety is the foundation of user trust in blockchain networks. If users' funds cannot be protected, blockchain technology will not achieve widespread adoption. However, overemphasizing security might introduce centralized elements, such as validators collaboratively freezing transactions, which could risk being perceived as censorship. Decentralization ensures that the network is not controlled by a single entity, providing censorship resistance and attack resistance, which I believe is crucial in politically sensitive or high-risk environments. Sui's approach can be seen as a compromise, but transparent governance mechanisms are still needed to prevent abuse, alleviate unnecessary user concerns, and create a more stable community.
Sanqing: This question is really difficult to answer. But if I had to choose, I would say: In the long-term vision of Web3, decentralization is the most fundamental value pursuit.
In the short term, safety is indeed important, and users won't stay without it. But if we repeatedly use centralized methods for safety, in the long run, Web3 would be just another form of the internet, losing its revolutionary nature. True security should come from mechanisms, open-source audits, and transparent governance, not from me thinking you have a risk, so I can use system privileges to rescue you or restrict you.
This Sui operation protected some users but lost the underlying color of a public chain as a "credibly neutral infrastructure".
Clare Yang: Decentralization and security do indeed conflict, but I believe in practical applications, safety should be the foundation and premise. Without security guarantees, a decentralized network will struggle to attract users and funds, and its ecosystem cannot develop healthily. In the Sui incident, validators urgently freezing funds sacrificed some decentralization but protected most users' interests, demonstrating the necessity of prioritizing safety. Of course, in the long term, the network needs to continuously improve its degree of decentralization, reduce dependence on single-point power, to better balance safety and freedom.
