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GLP funds on Arbitrum fully recovered, following successful negotiation. These are the next steps for distribution. On July 9, 2025, a user disclosed a live vulnerability in the GMX V1 deployment on Arbitrum. This vulnerability allowed for ~$40 million of GLP liquidity to be compromised and withdrawn to an external wallet. The funds were returned, following outreach by GMX, and are now held by the DAO, awaiting distribution to the liquidity providers in the Arbitrum GLP vault. GMX V2 is unaffected by this vulnerability. Trading and liquidity provision continue as normal on GMX V2. ——— Executive Summary - ~$40m in GLP funds on Arbitrum were compromised due to a GMX V1 vulnerability - The affected funds have been fully recovered - A $5m bug bounty was paid to the user who uncovered this vulnerability - Recovered assets are secured in the GMX Treasury under the oversight of the Security Committee - A redistribution plan for affected Arbitrum GLP holders is being discussed and will be evaluated by the GMX DAO ——— Current State of GMX V1 On Arbitrum: - GLP minting and redemption are disabled - Closing of open positions is enabled - Opening new positions and executing existing orders is permanently disabled - esGMX vesting using GLP remains functional - Users should close all V1 positions and cancel any pending orders On Avalanche: - GLP minting is now disabled - GLP redemptions remain available - esGMX vesting via the GLP vesting vault remains functional - Redeeming GLP is recommended unless GLP is actively used for vesting - Users should close all V1 positions and cancel any pending orders ——— Distribution Plan A snapshot of the total Assets Under Management (AUM) in GLP on Arbitrum will be taken just before and after the incident. This amount will be distributed back to GLP holders, pending DAO approval. 1. Preliminary Actions and Asset Conversion GMX has already undertaken the following actions to initiate the distribution process, following an evaluation by the Security and Risk Committees: - Immediate pausing of GMX V1 - Follow-on security transactions to ensure that funds remaining in the GLP vault are secure - Conversion of all recovered assets into stablecoins, to ensure that value is preserved - Funds bridged back to Arbitrum and secured in the GMX Treasury, overseen by the GMX Security Committee 2. Fund Distribution: The Path Forward - Simply placing the recovered funds back into GLP isn't a viable option due to several complexities, including: - During the exploitation of the vulnerability, the GLP token balances were changed - GLP mints and redeems have occurred since the incident, and need to be fairly accounted for - Numerous DeFi protocols are built on GLP, and they may face issues due to the altered values of the assets in GLP. Resolving this requires tailored solutions. Accordingly, the GMX DAO will need to carefully evaluate several important decisions, including: - Fund Custody Strategy * Retaining the funds in stablecoins * Converting them into a mixture of the original assets * Converting them into GLV tokens, the Liquidity Vault of GMX V2, which provide a comparable composition, asset exposure, and yield to GLP - Supplementation from Treasury * Whether to provide a partial reimbursement pro rata, or to use the GMX Treasury to cover any potentially remaining shortfall, based on the snapshot of GLP AUM - Form of Reimbursement * What asset(s) should be distributed to affected users - Distribution Timeline * What is a realistic timeline for completing the distribution process safely and correctly Proposed options, along with relevant information and technical feasibility, will be presented to the GMX DAO shortly to determine these key aspects of the Distribution Plan. GMX strives for a fair and accurate distribution that yields a positive outcome for as many users as possible. We appreciate your patience and understanding during this process. ——— A Few Reflections

Major Preseason Patch on July 30 - Cinematic Teaser The Star Atlas arena shooter mode is getting its biggest update yet. This July patch brings a brand new loadout system, progression features, new weapon models, a fully finished Paizul’s Arena map, and more. Join us on July 30 for the first Town Hall of Star Atlas Summer as we go into this update, share what’s coming next, and celebrate this milestone together! 🔗 Watch the cinematic teaser NOW:

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Major Preseason Patch on July 30 - Cinematic Teaser The Star Atlas arena shooter mode is getting its biggest update yet. This July patch brings a brand new loadout system, progression features, new weapon models, a fully finished Paizul’s Arena map, and more. Join us on July 30 for the first Town Hall of Star Atlas Summer as we go into this update, share what’s coming next, and celebrate this milestone together! 🔗 Watch the cinematic teaser NOW:

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