crypto trader on GMX Exchange By manipulating the price of the AVAX token, we leveraged the zero-slippage feature to extract over $565,000 in profits.
GMX is a decentralized exchange that allows users to execute trades without slippage. Traders on the platform can execute trades at the same price at which they were initiated.
Joshua Lim, Head of Derivatives at Genesis Trading, said: explained An experienced trader manipulated the GMX AVAX-USD price by opening a large position with zero slippage.
Traders spent about $4.7 million to move AVAX price into long and short positions in five consecutive trades.
5/ This is not as exploitative as GMX works as designed! X executed a large trade against GLP holders with 0 slippage: at oracle prices without considering the price impact
In the real world, you have to pay liquidity providers on the other side when you take risks
— Joshua Lim (@joshua_j_lim) September 18, 2022
Due to GMX’s design, AVAX traded between $18.33 and $18.68 during the outbreak period, so no price impact was considered. This trader reportedly made a profit of $700,000 from his $500,000 on this operation.
Lim explained that the incident was not an exploit, as the trader merely manipulated a loophole in the design of GMX, which was “working as designed.”
GMX moves to limit AVAX trading
Conversely, GMX has announced that it is actively working towards resolving the situation. GMX developer He added that a viable solution could be published in about two weeks.
To curb further exploitation, GMX has capped AVAX’s tradable amount to $2 million for long positions and $1 million for short positions.
Some community members said GMX moved too slowly, as the loophole was discovered “weeks ago.”
ZigZag predicted this several weeks ago. It was an inevitable exploit. What did GMX do, nothing.
— Lolipony (@rolipony) September 18, 2022
according to crypto slate Data shows that $AVAX is currently trading at $16.87, down more than 7% in the last 24 hours. $GMX, the GMX exchange’s native token, is at $39.9, down 10% since the incident.
