GMX Allocates $44M to Compensate GLP Holders After Major Exploit

GMX, a decentralized perpetual exchange operating on the Arbitrum network, has announced a $44 million compensation plan for holders of GLP, a tokenized index of crypto assets, following a major exploit in January 2025. The attack exploited a reentrancy vulnerability in the GLP pool of the GMX v1 platform, leading to the de-pegging of the asset and causing significant financial losses for liquidity providers [2]. In response, GMX has committed to reimbursing victims in full, with the compensation package including both repayment of lost funds and a $2 million contribution to its DAO treasury [2].

The compensation will be distributed in the form of GLV tokens, a newly introduced asset designed to mirror the composition of GLP, which includes 25% Ethereum (ETH), 25% Wrapped Bitcoin (WBTC), and 50% stablecoins [2]. This ensures that affected users receive a diversified and balanced portfolio similar to what they held prior to the exploit. Additionally, GMX has introduced a $500,000 retention incentive to reward users who hold onto their GLV tokens for at least three months, encouraging long-term commitment and stability within the ecosystem [2].

GMX V2, the updated and exploit-free version of the platform, has since demonstrated robust performance, with billions of dollars in weekly trading volume and growing liquidity [2]. The platform’s rapid migration to a safer environment has been viewed as a testament to its resilience and commitment to user security. The company also emphasized the implementation of enhanced security measures and governance improvements, including a more secure vault architecture and a community-driven insurance fund, to prevent similar incidents in the future [2].

The response from the DeFi community has been largely positive, with many viewing GMX’s proactive approach as a benchmark for how platforms should handle security breaches [2]. Analysts note that while the $44 million compensation is a significant gesture, it represents a fraction of the broader market losses during the incident. Nonetheless, the move is considered a crucial step in rebuilding trust and demonstrating accountability [2].

GMX’s compensation plan not only serves as restitution for affected users but also reflects the maturing nature of the DeFi space, where platform operators are increasingly expected to take responsibility for systemic risks. The platform has pledged to provide regular updates on the compensation distribution and ongoing security improvements. As DeFi continues to grow, the incident underscores the need for stronger risk management and user protection mechanisms, with GMX’s actions likely to influence future crisis responses across the industry [2].

Source:

[2]title: GMX Unleashes $44M Compensation to Heal GLP Holders ...

url: https://www.livebitcoinnews.com/gmx-unleashes-44m-compensation-to-heal-glp-holders-hack-wounds/