The Avalanche Foundation has announced that it will provide an incentive of $4 million in AVAX tokens for the growth of the GMX decentralized trading platform.

The $1 million incentive is deducted from Avalanche Rush, an Avalanche Foundation liquidity mining incentive program aimed at fueling the Avalanche DeFi ecosystem.

According to Avalanche, the $4 million incentive will be issued over several months alongside its collaboration platforms based on the GMX protocol. Contributors include TraderJoe, YieldYak, Dopex, and Yeti Finance.

Launched on Avalanche in January, GMX is a decentralized trading platform that allows 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 temporary loss by allowing liquidity providers to risk losing their capital if GMX traders are profitable. Meanwhile, if traders lose their money, the fees generated are rewarded to liquidity providers. On the contrary, if the traders are being profitable, the liquidity providers take responsibility.

The incentive program cancels part of the risk related to the provision of liquidity in GMX. It allows protocol contributors to create new types of products in addition to the revenue model used by GMX. Along with the $4 million, which will be allocated over a few months, users will be able to provide liquidity on the GMX platform and make use of new products that platform contributors develop.

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

GMX is not the only platform using the Avalanche blockchain amid extreme market conditions. In September, New York-based global investment firm KKR & Co. Inc announced that it had put a portion of its private equity funds into the Avalanche blockchain.

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