Add The Funds were Returned

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<br>GLP funds on Arbitrum fully recovered, following successful negotiation. These are the next steps for distribution. A user disclosed a live vulnerability in the GMX V1 deployment on Arbitrum. On July 9, 2025, a user disclosed a live vulnerability in the GMX V1 deployment on Arbitrum. 40 million of GLP liquidity to be compromised and withdrawn to an external wallet.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. 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. Numerous DeFi protocols are built on GLP, [MedicGLP](https://oistinprojects.xyz/index.php/Recent_Advances_In_GLP-1_Research:_A_New_Era_In_Diabetes_And_Obesity_Treatment) and they may face issues due to the altered values of the assets in GLP. Resolving this requires tailored solutions.<br>
<br>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. We would like to extend our deepest gratitude to all our security partners, involved researchers, the Arbitrum team, various exchanges, bridge providers, and stablecoin partners (FRAX & USDT) who have assisted GMX in navigating this complex process. Your swift and dedicated collaboration was instrumental in protecting both GLP holders and the GMX DAO. We would also like to thank the numerous members of the GMX community and fellow builders who stood by us, offered their support, and provided helpful suggestions during these challenging times. To the user 0xDF3340A436c27655bA62F8281565C9925C3a5221, we extend our gratitude for your critical role in discovering a vulnerability within the GMX V1 codebase and for ensuring the [safe return](https://www.youtube.com/results?search_query=safe%20return) of funds to the DAO.<br>
<br>GMX encourages users who discover any vulnerability to engage directly with our Immunefi bounty program for its disclosure. This program is specifically designed to protect protocols and white-hats, and it ensures proper documentation is in place to validate bounty payments. This incident serves as a timely reminder for us to continue enhancing the security of GMX. GMX contributors will continue prioritising the addition of more layers of security to ensure the safety of the protocol and its users. The information below has been shared with all GMX V1 forks that we could reach out to; it is being re-shared here for documentation purposes. Based on a review of the incident by contributors, auditors and security researchers, the root cause of this vulnerability is a re-entrancy attack. While this function has the ‘nonReentrant’ modifier to guard against re-entrancy, this only prevents re-entrancy for functions in the same contract, which is within the OrderBook contract. This re-entrancy would be made use of to directly call `increasePosition` in the Vault contract. Under regular operation, the increasePosition function in the Vault contract can only be called by the PositionRouter and PositionManager contracts. The PositionRouter and PositionManager contracts are needed to ensure that the average short price is properly calculated. The price of GLP is dependent on the pending PnL, which is calculated based on the average short price. By utilising this re-entrancy and bypassing the [average short](https://www.express.co.uk/search?s=average%20short) price calculations, an attacker could open positions and manipulate the average short price for BTC downwards from the initial value of $109,505.77 to $1,913.70.<br>
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