Question 1

What are CETUS and Cetus Protocol?

Accepted Answer

CETUS is the transferable native protocol token of Cetus Protocol. Cetus is a decentralized exchange and concentrated-liquidity protocol deployed on Sui and Aptos; CETUS is used for protocol functions, incentives, and participation mechanisms associated with xCETUS. It is not equity in a Cetus company and does not promise holders company revenue, profits, or a fixed return. Holding CETUS, using protocol functions, providing liquidity, and participating in governance arrangements are separate matters, with eligibility and outcomes depending on the relevant mechanism.

Question 2

How do Cetus concentrated-liquidity pools work?

Accepted Answer

Cetus enables traders to exchange on-chain assets and liquidity providers to deposit two assets into pools used for trading. Its concentrated-liquidity mechanism lets providers select a price range instead of spreading funds evenly across the entire price curve from zero to infinity. When the market price is within the selected range, a position can provide liquidity for trades in that pool. Once the price moves outside the range, the position no longer provides liquidity for trades in that range until the price returns or the provider adjusts the range. Concentrated allocation can improve capital efficiency, but range selection and price movements directly affect a position's asset composition and fee opportunities.

Question 3

What is the relationship between CETUS and xCETUS?

Accepted Answer

Cetus uses a dual-token mechanism of CETUS and xCETUS: CETUS is transferable, while xCETUS is a custodial token representing staked governance rights and is non-transferable by default. Users can convert CETUS directly into xCETUS and may also receive xCETUS under the rules for participating in protocol activities, such as providing liquidity. They are not the same balance with a freely reversible, costless exchange at any time. CETUS can be converted to xCETUS immediately at 1:1; redeeming xCETUS for CETUS instead enters a vesting process, where the time and conversion ratio affect the amount of CETUS ultimately received.

Question 4

How do the term and ratio affect redemption of xCETUS for CETUS?

Accepted Answer

Converting CETUS into xCETUS is immediate at a 1:1 ratio, but when redeeming, users must choose a vesting period. The shortest period, 15 days, converts 1 xCETUS into 0.5 CETUS, while the longest period, 180 days, converts at 1:1; the ratio increases with the selected term. No CETUS is received before the redemption period ends. If a term shorter than 180 days is selected, the unconverted remainder is forfeited upon completion and transferred to the Eco Treasury; if redemption is canceled before vesting ends, all xCETUS being redeemed is returned, but no CETUS is received. This gives conversion and exit different time and quantity consequences.

Question 5

Where do xCETUS staking rewards come from?

Accepted Answer

xCETUS holders are automatically included in the staking-reward mechanism described in the documentation. Reward funding comes from net protocol-fee proceeds generated by CLMM and DLMM, meaning protocol fee income remaining after third-party commissions, rather than from a pre-promised fixed rate. The current documentation states that 50% of CLMM net proceeds goes to xCETUS stakers and 50% repays a Sui Foundation loan. For DLMM net proceeds, 25% goes to stakers, 25% is protocol revenue, and 50% repays that loan. Rewards therefore vary with protocol fees and these rules; holding xCETUS does not represent a fixed or guaranteed yield.

Question 6

What governance can xCETUS holders participate in, and when is it enabled?

Accepted Answer

xCETUS is designed as a governance credential within the Cetus protocol. Voting power is calculated from the amount of CETUS converted/staked into xCETUS and can be used for matters such as protocol functions, upgrades, or parameters; it does not confer control over company operations, assets, or a board of directors. The official documentation also states that governance functions will be introduced once CETUS circulating supply reaches at least 90% of total supply. “xCETUS has a governance design” should therefore be distinguished from being able to vote in practice at any given time.

Question 7

What are CETUS's supply cap and allocation arrangements?

Accepted Answer

CETUS has a maximum supply of 1 billion tokens. The official token documentation lists allocations of 50% for community and LP, 20% for the team and advisors, 15% for investors, and 15% for the liquidity treasury. Maximum supply is a cap, not the same as circulating supply. The team and advisor allocation has a 12-month lock followed by 24 months of monthly vesting, while the investor allocation has a 6-month lock followed by 12 months of monthly vesting. Community and LP tokens are used for arrangements such as mining and liquidity incentives. Unlocking or vesting describes when allocated assets may be obtained under the schedule; it does not directly equal the quantity tradable in the market at every point in time.

Question 8

What problems do Cetus aggregation trading, limit orders, and recurring purchases each address?

Accepted Answer

Beyond trading pools, Cetus offers aggregation trading, limit orders, recurring purchases, and liquidity-management tools. Aggregation trading selects a route among accessible liquidity sources, while limit orders and recurring purchases respectively place a price condition or phased-execution rule into the trading arrangement in advance. These tools change how orders are placed or routed; they do not guarantee execution, the best price, or a fixed outcome. Before submitting, confirm the assets to be swapped, amount, minimum received, price impact, and network fee. A quote may become invalid before execution as market or on-chain conditions change.

Question 9

Who controls assets when using Cetus, and what should users note?

Accepted Answer

Cetus's primary tools are designed to be permissionless, with users interacting with smart contracts through their own wallets. The protocol terms state that Cetus does not custody users' digital assets, private keys, or wallet credentials. Control of assets remains with the wallet-key holder, meaning the user also bears responsibility for transaction signatures and approvals. Before use, check the contract/network, transaction content, and token-approval scope. On-chain operations also carry risks including price volatility, smart-contract defects, network congestion, failed or partially executed transactions; once confirmed, a transaction generally cannot be reversed by the protocol side like an order on a centralized platform.

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