Archi Finance Security Incident Distribution

1

Background

In July 2025, a security incident impacted GMX V1, resulting in the temporary draining of most funds from the GMX GLP pool. This pool contained assets from both individual users and third-party protocols that had built products and vaults on top of GLP.

Following the security incident, all the majority of funds were returned to GMX with GMX DAO treasury covering the remaining, and a distribution plan was established to ensure fair reimbursement to all affected participants. The details of that plan are outlined here:
:link: GLP V1 Arbitrum Distribution Plan

The Archi Finance Case

During the distribution process, the GMX team identified that 1,615,172.98 fsGLP remained locked within the Archi Finance protocol. Archi Finance was abandoned in late 2023, leaving users unable to access or withdraw their funds. Without intervention, these users would not be able to receive their share of the returned GLP funds.

After repeated but unsuccessful attempts to contact the Archi team, GMX contributors and the GMX Security Council collaborated to re-map the Archi contracts and design a fair method to distribute funds to impacted users.

Archi Distribution Plan

Farmers

Contracts were paused or stopped, there is no clear way to value their historical positions given interest, liquidations, earning distribution were impacted. All users with active farming positions on Archi will receive the dollar value of the collateral they deposited at the time of the security incident

Liquidity Providers

  • USDC/USDT LPs:
    Will receive the dollar value of their initial deposit into the protocol without any haircut, but also no interest

  • WETH/BTC LPs:
    Will be distributed the proportionate value of their collateral at the time of the security incident. This will leave them with gains in dollar terms but will result in a haircut in BTC/ETH terms.

A detailed breakdown of distribution amounts can be found here:
:link: Archi Distributions

Note: The recovery of these funds is possible only because GLP/v1 was paused and isn’t being restarted.

Summary

Through extensive analysis and careful contract remapping, GMX contributors have delivered the fairest possible outcome for affected Archi Finance users—ensuring that funds were returned equitably despite the protocol’s abandonment.

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Thanks for handling this professionally and giving these users back their assets.

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It’s good to be able to tie this final loose end together and help the affected users reach a positive solution.

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4

Once again, the GMX team excels in fairness and commitment to helping the community. While no solution is perfect, this represents a balanced and equitable approach for all parties involved. The deep analysis, and careful consideration the GMX team has dedicated to mapping and resolving the Archi integration to support LPs is truly admirable.

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This is the best news I’ve heard this year. Thank you to the GMX team

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