With this grant, we aim to attract at least an additional $5 million TVL to GMX related vaults, which will be done by incentivizing the $USDC lending pool and raise the pool size to $4 million. This additional lending capital will be subsequently lent to leverage users and directed into GMX GM pools, thereby enhancing the GM liquidity pool and supporting GMX V2 trading.

This initiative will significantly benefit the GMX ecosystem by facilitating higher leverage sizes and providing depositors with access to more lucrative yield opportunities. For Degen yield farmers who find the 10% yield on the ETH-USDC GM pool insufficient, Vaultka enables them to amplify their position by up to 10x, resulting in a tenfold increase in the real yield they initially earned. The lending pool plays a pivotal role in making this possible, serving as the foundation for these enhanced opportunities.

Lending has been a constraint on fully realizing the potential of leverage vaults. With the introduction of additional $ARB rewards offering up to 10x leverage, the existing unused liquidity in the lending pool is anticipated to be swiftly employed, potentially becoming a limiting factor for leverage users.

By offering supplementary $ARB incentives on top of the standard esVKA emission and $USDC real yield, we are confident to attract more users to lend their capital. Investors who prefer to avoid risk exposure can opt for the lending vault, maintaining a protective position while benefiting from the potential of the underlying leveraged LP through a rising reward split, directly linked to the leverage size. The added $ARB incentive serves as an extra layer of enticement to encourage lenders to participate and earn additional $ARB rewards.