GMX, a decentralized exchange, experienced a hack resulting in a loss of $42 million. The GMX team is offering a 10% bounty for the return of stolen assets.
Sophisticated Exploit
The hack on GMX involved a sophisticated re-entrancy exploit impacting their V1 vaults. Key assets such as WBTC and ETH were stolen. An estimated $9.6 million was moved from Arbitrum to the Ethereum mainnet to launder funds.
Financial and Protocol Reactions
The GMX team, composed of decentralized contributors, confirmed that an attack on their V1 vaults took place. They hope to recover the stolen assets by offering a 10% white hat bounty. The V2 contracts remain untouched, preventing wider contagion.
Market and Security
The financial markets reacted swiftly, with GMX's native token dropping by 25% to $11.5. Trading on V1 was paused, with GLP tokens frozen on Arbitrum and Avalanche. Key DeFi protocols were reevaluated in light of these vulnerabilities.
The attack on GMX highlights the need for enhanced security measures in decentralized finance. There is a pressing need to focus on preventing re-entrancy vulnerabilities and improving cross-chain resilience to avoid similar incidents in the future.
