Decentralized trading platform GMX has provided an update on a significant security vulnerability affecting its V1 protocol, leading to substantial losses.
Details of the Attack and Platform Response
GMX confirmed a security incident that led to an estimated loss of around $40 million in tokens. The exploit targeted the GLP liquidity pool on Arbitrum, resulting in GMX Coin plummeting nearly 25% to $11.50. An official statement from GMX noted that the vulnerability was isolated to its V1 protocol on Arbitrum and did not directly impact GMX V2. All V1 transactions have been paused to prevent further damage. The GMX team emphasizes that security has always been a priority and is currently investigating the attack vector.
Will There Be Compensation?
As of now, no compensation program has been announced, adding to market uncertainty. If a refund or insurance model is introduced swiftly, it could trigger a short squeeze, pushing prices higher. Key levels to watch for a bullish reversal include $13.00 and $13.60. If no compensation is provided or sentiment declines, strong support lies at $9.50.
Technical Risks and Volatility
Current conditions present risks in both directions. High-leverage positions—whether long or short—are dangerous due to ongoing uncertainty. Any news regarding recovery funds or further losses could lead to extreme price movements.
While the hack has undoubtedly shaken confidence in GMX V1, the incident appears contained at this time. Transparency, swift communication, and potential restitution may help regain user trust.
