Avalanche Foundation Announces $4m Incentive Program for Trading Platform GMX

Avalanche Foundation has announced it will grant a $4 million incentive in AVAX tokens for the growth of the decentralized trading platform GMX.

The million-dollar incentive is deducted from the Avalanche Rush, a liquidity mining incentive program by Avalanche Foundation aimed to boost the Avalanche DeFi ecosystem.  

According to Avalanche, the $4 million incentive will be issued over a multi-month duration alongside its collaboration platforms building on the GMX protocol. The collaborators include TraderJoe, YieldYak, Dopex, and Yeti Finance.

Launched on Avalanche in January, GMX is a decentralized exchange platform that enables users to trade spot and perpetual futures contracts on the Avalanche blockchain while also offering on-chain trading and deep liquidity.

The platform eliminates the risk of impermanent loss by allowing liquidity providers to risk the loss of their capital if GMX traders are profitable. Meanwhile, if traders lose their money instead, fees generated are rewarded to liquidity providers. In contrast, if the traders are being profitable, liquidity providers take responsibility. 

The incentive program cancels some of the risk correlated with providing liquidity on GMX. It allows the collaborators of the protocol to build new types of products on top of the revenue model used by GMX. Alongside the $4 million, which will be allocated over a few months, users would be able to provide liquidity on the GMX platform and make use of the new products the platform collaborators develop.

Notably, the incentive program Avalanche Rush has been a part of the rapid growth of the Avalanche DeFi ecosystem since its launch in 2021. As the smart contract platform stated, ''the incentive program boosted its DeFi total value locked (TVL) by 900% within just a month of its launch.’’

GMX is not the only platform utilizing the Avalanche blockchain amid the extreme market condition. In September, New York-based global investment firm KKR & Co. Inc announced that it had put some part of its private equity funds on the Avalanche blockchain.