GMX Approves $44M Compensation Plan for GLP Holders Hit by Hack

Decentralized perpetuals exchange GMX has confirmed that GLP holders impacted by last month’s security breach can now claim compensation via its dApp. The exchange will distribute around $44 million to affected Arbitrum GLP holders, restoring their balances in full.

The payout, which aims to restore affected balances fully, includes recovered funds from the exploit and an additional $2 million from GMX’s treasury. The incident occurred on July 9, when GMX V1’s GLP pool on Arbitrum suffered a $42 million loss due to a security breach.

Details of the Exploit and Recovery Efforts

According to blockchain security firm CertiK, the breach exploited a reentrancy vulnerability in the initial protocol version. This flaw enabled the attacker to manipulate the assets under management (AUM) calculation and withdraw amounts exceeding their original deposits.

Following the breach, GMX sent an on-chain message offering the attacker a deal to return 90% of the stolen assets in exchange for a 10% bounty. The attacker accepted, enabling the recovery of most of the lost funds.

These recovered assets, along with additional support from GMX’s treasury, will be distributed as compensation in GLV tokens, a new liquidity vault product used in GMX V2. Eligible users will receive two types of GLV in equal amounts—GLV [BTC-USDC] and GLV [WETH-USDC]. These tokens represent a mix of 25% WBTC, 25% ETH, and 50% stablecoins.

Next Steps and Ongoing Operations

GMX stated that custom arrangements are being developed for decentralized finance DeFi protocols that integrated GLP before the incident. Those solutions will be announced by the respective protocols in due course.

For individual GLP holders, remaining balances can be redeemed normally once withdrawals are enabled on Arbitrum. The redemption feature is expected to go live within 10 days.

GMX also confirmed that its V2 protocol was unaffected by the exploit and continues to record high activity. The platform reports billions in weekly volume and steady user participation.

Despite the setback, the exchange said trading volume and liquidity deposits have remained strong since the incident. It attributed this resilience to continued confidence in its platform and governance.

Reflecting on this resilience, Jone Zee, GMX’s Communications contributor, said the coordinated response reflected the community’s strength. He added that the resolution turned a difficult event into an opportunity to reinforce trust.

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