A decentralized exchange (DEX) is falling on news of price manipulation. Accordingly, the DEX named GMX was the target of exploiters. An anonymous exploiter stole $565,000 in altcoins through price manipulation. After the event, sharp depreciation occurred in both the GMX token and AVAX price.
These 2 altcoins suffered price manipulation
An exploiter earned around $565,000 from the decentralized exchange GMX’s AVAX/USD market. The exploiter manipulated the altcoin price and the stock market to get his profit. According to the information received, he abused the “minimum buy-sell spread” and “zero price impact” features of the GMX exchange. Thus, he carried out an attack on GMX that affected GLP holders who provided liquidity for the AVAX market.
GMX confirmed the price manipulation in a post on Twitter on Sunday. However, he added that the Avalanche market on the exchange will remain open despite the attack. However, although the market remains open, liquidity will be limited. GMX announced a $2 million cap on long positions and $1 million on short positions. As we have reported as Kriptokoin.com, Avalanche has been the subject of DeFi attacks recently. The price of GMX and AVAX fell after the last exploit.
How did the abuse go?
Joshua Lim, Head of Derivatives at Genesis Trading, was one of the first to analyze the exploit. Lim announced that the exploiter was generating large positions with zero price slippage. According to him, the exploiter was selling at a slightly higher price after opening these large positions. Where he preferred to open a position was GMX’s AVAX/USD market. Therefore, GLP holders and AVAX holders who mainly provide AVAX liquidity were affected by the attack.
According to Lim, the abuser repeated this method 5 times in total. Also, it has transferred 200k altcoins each time. The exploiter, who also paid the price difference in the exchanges where he transferred AVAX, obtained AVAX of $ 565,000 at the end of his entire plan. Continuing his words, Lim claimed that this was not an abuse. According to him, the GMX exchange had just worked as designed. Lim says GMX needs to remove the “zero price impact” feature to avoid another such event.
GMX and AVAX price dropped hard
After the attack, a remarkable depreciation occurred in the price of GMX. The altcoin, which was traded at $ 48 on the night of September 18, when the attack took place, was trading at $ 40 on Monday. Accordingly, the price of GMX has lost more than 20% in just one day.
A similar decline has been revealed on the popular layer-1 altcoin project Avalanche. AVAX, which has no connection with the realization of the attack, was not affected as much as GMX. However, it still lost value. The popular altcoin was trading around $18.45 before the attack took place. However, it fell after the price manipulation and lost more than 10%.
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