GMX, a decentralized change, awarded Collider Analysis a $1 million bug bounty in 2022. This payout was in recognition of their discovery of a important bug in GMX’s sensible contracts that immediately affected how the protocol tracks excellent debt.
The Bug Affecting GMX And GLP
GMX has not supplied extra data on how the bug was patched and when. Nonetheless, the DEX operator mentioned the bug negatively impacted GMX v1 liquidity suppliers (LPs) because the code led to inaccuracies in quotes associated to “the truthful worth of tokens.” Particularly, the bug affected the World Liquidity Pool (GLP), inflicting it to deviate from its truthful worth.
Since GMX helps as much as 50X leverage, a system tracks debt borrowed by merchants and the way it’s repaid. It’s sensible contract-driven, and the dealer enters into debt for each leveraged place. If costs transfer towards them, they’re liquidated, and the margin securing the leveraged place is transferred to the protocol.
Any disruption to this mechanism can severely have an effect on GMX, impacting income and disincentivizing liquidity suppliers from partaking.
In September 2022, a flaw affecting GLP and impacting the DEX’s “minimal payment” and “zero value impression” options noticed an unidentified exploiter make approach with over $570,000 from the AVAX/USD market.
By deploying on Arbitrum, a layer-2, and Avalanche, a excessive throughput and low-fee blockchain, the protocol helps low-fee swapping powered by GLP, a liquidity pool holding all belongings traded on GMX. From the GLP, liquidity suppliers who may have been considerably impacted can earn charges from swap charges, spreads from leverage buying and selling, and at any time when there may be asset rebalancing.
Bounty Program Can Reward Up To $5 Million
Additional particulars present that GMX’s bug bounty program focuses on making certain their sensible contracts and utility operate as designed with out weak point, contemplating the trustless nature of swaps. The purpose is to stop theft of consumer funds via varied means, together with unauthorized transfers, value manipulation of GLP, freezing, and different risk vectors.
At any time when there’s a flaw, and the white hacker identifies it, the GMX bug bounty program will distribute rewards relying on the flaw’s severity. Nonetheless, any submission should accompany a report demonstrating how the code error impacts the protocol earlier than being reviewed and the reward distributed.
Even so, in GMX, all important sensible contract vulnerabilities are topic to a ten% cap on the potential harm it could have precipitated. The utmost bounty paid to builders who pick important code flaws is $5 million.
Function picture from Canva, chart from TradingView
