GMX Completes $42 Million Recovery Program After July Exploit, V2 Platform Shows Strong Resilience

GMX has successfully completed its $42 million recovery distribution following a major exploit in July, with almost 90% of stolen funds recovered through strategic white-hat negotiations. The platform’s V2 infrastructure has shown impressive resilience, surpassing $600 million in Total Value Locked (TVL) and positioning GMX for stronger security and growth.

Published by Ecem EFE

14 August 2025, 11:16 published Updated 14 August 2025, 11:16

GMX Successfully Recovers $37.5 Million After Exploit, Transitioning to V2 Platform

GMX Successfully Recovers – Decentralized derivatives platform GMX has successfully concluded its recovery program following the devastating July exploit that drained $42 million from its V1 infrastructure, marking a significant milestone in DeFi security restoration.

White-Hat Negotiation Recovers Most Stolen Funds

The July 9 exploit exposed a critical re-entrancy vulnerability in GMX V1’s GLP pool, allowing attackers to manipulate Bitcoin short average prices and extract substantial assets. However, GMX’s swift response and strategic negotiations proved crucial in damage control.

Through innovative white-hat bounty arrangements, GMX successfully recovered approximately $37.5 million of the stolen funds, with attackers retaining only around $5 million. This recovery rate of nearly 90% represents one of the most successful post-exploit negotiations in DeFi history.

The platform immediately halted GLP trading, minting, and redemption across Arbitrum and Avalanche networks to prevent further damage, demonstrating responsible crisis management protocols.

Community-Driven Recovery Plan Delivers Results

Following extensive community consultation through Snapshot voting, GMX implemented a comprehensive recovery strategy centered on GLV (GMX Liquidity Vault) token distribution to affected GLP holders. These new vaults mirror the original composition with 25% Wrapped Bitcoin, 25% Ethereum, and 50% stablecoins.

The GMX DAO allocated $500,000 in retention incentives for holders maintaining GLV positions for three months, while covering a $2 million treasury shortfall to ensure full reimbursement. Strategic burning of white-hat-held GLP tokens, representing 29% of total supply, helped restore proportional value for legitimate holders.

V2 Platform Demonstrates Resilience

While V1 operations remain suspended, GMX V2 has shown remarkable resilience, maintaining rising volumes and liquidity throughout the crisis. The platform’s Total Value Locked has surged past $600 million, recovering from post-exploit lows of $409 million and exceeding pre-incident levels of $480 million.

With GLP redemptions expected to resume within 10 days and V1 set for eventual sunset, GMX is transitioning entirely to its V2 infrastructure, positioning itself for stronger security and enhanced performance.