The Faith Crisis in the Blockchain Industry: Deep Reflections Triggered by the Sui Incident

Recently, a significant hacking incident occurred in the Sui public chain ecosystem, which not only resulted in substantial economic losses but also triggered a profound reflection on the core values of the blockchain industry. The way this incident is handled may become an important turning point for the industry's development.

On May 22, 2025, the largest decentralized exchange on the Sui blockchain suffered a hacker attack, resulting in losses exceeding $220 million. A series of subsequent countermeasures, including fund freezes, on-chain governance voting, and protocol upgrades, sparked widespread controversy.

The attacker exploited a flash loan and an integer overflow vulnerability in the smart contract to obtain a large amount of liquidity at a very low cost. After the incident, the Sui network quickly took action to freeze the hacker's funds through a special denial list mechanism.

More surprisingly, Sui also plans to "recover" stolen funds through on-chain upgrades. This practice introduces an address alias mechanism that allows for the transfer of funds without requiring the hacker's signature. This decision was supported by the majority of validators through on-chain governance voting.

However, this approach has sparked intense discussions within the industry. It challenges the fundamental principle of blockchain immutability and breaks the traditional consensus of "code is law." Unlike previous methods of solving problems through hard forks, Sui's approach resembles a form of "protocol-based amendment," where the chain makes decisions on behalf of the users.

This approach may become a precedent for how Blockchain addresses security incidents in the future, but it also brings a series of questions: When a chain can break rules for justice, does it then have a precedent for breaking any rules? Should group voting become the basis for determining the flow of funds? If so, is this decision-making mechanism based on the amount held or the number of people?

From a broader perspective, this event also reflects the dilemma the Blockchain industry faces when dealing with regulatory pressure. On one hand, efficient centralization may be a necessary stage in the development of Blockchain; on the other hand, excessive compromise may lead Blockchain to become "another less effective financial system."

The true value of Blockchain lies in the fact that even if the community has the ability to intervene, they choose not to. The future of a chain is determined not only by its technical architecture but also by the set of beliefs it chooses to uphold. Balancing the concept of decentralization while pursuing efficiency and security will be a major challenge faced by the entire industry.