GMX, a decentralized exchange, has finalized a compensation plan, distributing approximately $44 million to GMX Liquidity Provider (GLP) holders on Arbitrum who were affected by a V1 vulnerability in July 2025.
This payout, made in GLV (GMX Liquidity Vault) tokens, is designed to reflect the pre-exploit composition of GLP tokens. The successful distribution marks a significant step in restoring user confidence after the protocol faced a re-entrancy flaw that compromised its V1 GLP pool.
GMX has successfully completed its ~$44M Distribution Plan for $GLP holders on Arbitrum affected by the recently disclosed V1 vulnerability.
Eligible wallets can now claim via the GMX dApp.
🧵 Read the details below:
1/7 pic.twitter.com/wCMUTec6Lo
— GMX 🫐 (@GMX_IO) August 13, 2025
The exploit targeted a vulnerability in the V1 GLP pool, allowing an attacker to manipulate prices and drain around $42 million in assets from the protocol. Following the incident, GMX successfully negotiated with the attacker, who returned approximately $37.5 million of the stolen funds. The attacker was permitted to keep about $5 million as a white-hat bounty, a common practice in the crypto industry to encourage the return of funds. A $2 million shortfall was covered by the GMX DAO treasury to ensure full restitution for affected users.
The exploit was isolated to the GMX V1 infrastructure, which is in the process of being phased out. The newer GMX V2 platform, which uses a different architectural model, was not affected and has continued to operate normally. GMX V2 was designed to improve upon its predecessor by introducing isolated markets and a more balanced fee mechanism to mitigate risks and enhance security for liquidity providers. These upgrades address the limitations of V1, such as the imbalance of open positions and a limited number of tradable assets. This incident highlights the importance of the V2 upgrade in providing a more resilient and secure trading environment.
Meanwhile, Coinbase is breathing new life into its Stablecoin Bootstrap Fund in a bid to strengthen liquidity for USD Coin (USDC) across both established and up-and-coming decentralized finance (DeFi) protocols.
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