ME News reports that on October 16 (UTC+8), Dann, a product engineer at Solana’s liquidity protocol Meteora, tweeted that the team has completed improvements to the legacy DAMM v1 pool accounting design. The new design has pools track their own total LP supply independently, ensuring external burns no longer affect share calculations, and withdrawals now require signature from LP holders. In the previous design, if LP tokens were transferred to the System Program or an incinerator address and burned, the total supply would be reduced, inflating the shares of remaining LP holders.
Security researchers discovered that a third-party wallet exploited this design to increase its share by approximately $12,600 across seven low-liquidity legacy pools. Upon notification, the team immediately paused and patched the issue. Aside from these seven pools, DAMM v1 has now resumed normal operations. (Source: Foresight News)
Meteora Resolves LP Token Share Inflation Issue in Legacy DAMM v1 Pools
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Summary
On October 16 (UTC+8), Meteora, a Solana liquidity protocol, product engineer Dann announced that the team has completed an update to the legacy DAMM v1 pool accounting. The new design enables pools to internally track total LP supply, preventing external burns from distorting share calculations. Previously, sending LP tokens to the incinerator address reduced the total supply and artificially inflated the shares of remaining holders. Security researchers discovered a third-party wallet exploiting this vulnerability, inflating its share in seven low-liquidity pools to approximately $12,600. The team has paused and resolved the issue. DAMM v1 is now live again, excluding the seven affected pools. This update will influence future token listings and may impact inflation data metrics.
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