Ostium to Resume Trading on July 23 After $23.8M LP Vault Exploit

Exploit hit LP vault, not trader collateral

According to Ostium, the attacker breached off-chain infrastructure used to feed prices into the protocol. The protocol said manipulated price reports were then submitted on-chain, allowing the exploiter to open and immediately close large positions and pull out what Ostium described as artificial profit.

The incident affected the liquidity provider, or LP, vault rather than trader funds posted as collateral. Ostium said collateral is stored in an isolated contract, which is why user positions were able to remain open despite the attack.

Trading was paused shortly after the exploit. Ostium said it froze all trading contracts within 60 minutes of the first exploit transaction.

Recovery and investigation

As it works toward reopening, Ostium said it is coordinating its response with outside security and investigative firms including Mandiant, zeroShadow, Collisionless, and SEAL 911. The protocol also said law enforcement is involved and that it is in contact with exchanges, bridges, and stablecoin issuers.

The reopening is scheduled for 10:00 a.m. ET on July 23. Ahead of that time, traders have a 24-hour window to manage their positions before the market resumes.

How positions and orders will be handled

When trading returns, open positions and pending orders will carry over rather than being reset. Ostium said positions will be marked to the live market price at the moment of reopening, not to any price moves that occurred while trading was paused.

A position will only be liquidated if it is below its liquidation threshold at the reopening price, according to the protocol. It also said any take-profit, stop-loss, or limit orders whose trigger levels have been reached at live prices at 10:00 a.m. ET on July 23 will execute at that time.

The restart will happen in phases. Ostium said it will first allow protective and reduce-only actions, including closing positions, adding collateral, and liquidations. Opening new positions will come later, after pending orders have been cleared.

Liquidity provider deposits still paused

While trading is set to resume, new deposits into Ostium’s OLP pool will remain paused. The protocol said the arrangement is intended to let existing liquidity providers who remain in the pool continue earning a share of protocol revenue against a reduced capital base. Withdrawals, meanwhile, are expected to be processed at the next settlement.

As of Tuesday, Ostium had about $37.8 million in total value locked, all on Arbitrum.

The incident highlights a familiar risk in decentralized trading systems: even when funds are separated across contracts, off-chain infrastructure tied to pricing and execution can still become a critical attack surface. In Ostium’s case, the protocol is attempting to reopen while preserving open positions and containing fallout for traders, even as LP losses and the wider investigation continue to develop.