GMX Completes $44M Compensation for GLP Holders After V1 Exploit

GMX has wrapped up its roughly $44 million compensation program for liquidity providers affected by the July V1 exploit on Arbitrum, fully reimbursing impacted wallets and offering retention bonuses.

Final payouts mark recovery from the July incident
The exploit, discovered on July 9, targeted a reentrancy flaw in GMX V1’s GLP pool. The attacker manipulated average short prices for Bitcoin to siphon around $42 million in assets.

In response, GMX halted GLP trading, minting, and redemption on both Arbitrum and Avalanche. Negotiations with the attacker led to the return of about $37.5 million under a white-hat bounty deal, leaving them with roughly $5 million.

Following a Snapshot community vote, GMX distributed GMX Liquidity Vault (GLV) tokens to eligible GLP holders. Each GLV mirrored the pre-exploit GLP mix — about 25% wrapped Bitcoin, 25% Ethereum, and 50% stablecoins. The DAO also provided $500,000 in retention incentives for holders who kept their GLV for at least three months and used treasury funds to cover a $2 million gap. GLP tokens held by the white-hat (about 29% of supply) were burned to restore value for remaining holders.

V2 unaffected and growing
GMX V2 was not impacted by the exploit and has continued to see growing trading volumes and liquidity. Work is underway on custom recovery plans for DeFi protocols that integrated GLP, with redemptions expected to restart in around 10 days.

The exploit briefly sent GMX’s token price tumbling by nearly 28% and reduced TVL from $480 million to $409 million. Since then, liquidity has rebounded strongly, topping $600 million. With V1 set to sunset, the project’s focus is now firmly on expanding its V2 infrastructure.