Convex Finance is a DeFi platform designed to provide additional yield and ease of use to the stakers and liquidity providers of CRV tokens.
What is Convex Finance?
- Convex Finance enables Curve (curve.fi) liquidity providers and stakers to earn additional DeFi yields through CVX and cvxCRV tokens. Curve as the largest decentralized exchange to date with more than $20 billion in total value locked could offer an enormous advantage for other DeFi platforms absorbing liquidity from them.
- Convex Finance offers ease to earn Curve trading fee rewards while still having liquidity over their CRV tokens.
- Convex Finance platform benefited three main actors: Curve liquidity providers, CRV stakers, and CVX stakers.
- Curve liquidity providers could stake their Curve LP token on the Convex Finance system which will be automatically staked in the Curve gauge. Liquidity providers will gain CRV rewards and extra incentive tokens (SNX, LDO, etc.) as well as CVX, at the amount pro-rata to each CRV received.
- CRV stakers can use Convex Finance to lock their CRV to receive a cvxCRV tokens that can be deposited into the rewards contract to receive a share of boosted CRV. cvxCRV can be exchanged at any time to CRV at a ratio of 1:1. CVX token will also be rewarded to the stakers pro-rata to the amount of CRV received.
- CVX stakers could deposit their CVX on the Convex Finance platform to receive a portion of the platform fees in form of cvxCRV. The CVX deposited could be withdrawn at any time.
|Token Name||Convex Finance|
|Total Token Supply||87,268,353|
|Current Circulating Supply||See Coinmarketcap|
|Market Capitalization||See Coinmarketcap|
|Token Creation Date||May 2021|
|Can it be mined?||No|
Who is behind Convex Finance?
Convex Finance platform was created by an anonymous developer and launched in May 2021. The developer published pre-launch information in April 2021 explaining the project details including token economy and distributions (airdrops). Further information about the developers is nowhere to be found on the internet at the time of writing.
What is the purpose of Convex Finance?
CVX functioned as a utility and governance token of the Convex Finance platform. The owner of CVX could earn a share of the protocol fees by depositing the CVX on the platform. In addition, to build a more decentralized platform in the future, CVX stakers would also act as the platform governing bodies.
Since first launched in May 2021, Convex Finance’s total value locks have experienced steady growth with its peak happening on 5th January 2022 for as much as $12.58 billion.
- The platform has been audited by Mixbytes. The full audit report can be found at: https://github.com/mixbytes/audits_public/tree/master/Convex%20Platform
- Convex Finance platform started to gain more traction in December 2021 after the CVX got listed on Binance and additions of new assets. Media report about the event can be found at: https://cointelegraph.com/news/3-reasons-why-convex-finance-surged-215-in-december-to-hit-new-all-time-high
- The platform surpassed the $20 billion TVL mark in January 2022.
- Risk of platform security. As a decentralized platform, Convex Finance is subject to the risk of security such as smart contract exploits, bugs, etc. even though the platform has been audited.
- Risk of losing liquidity due to an imbalance in the tokenomics circulation that can be caused by a massive withdrawal.
- Risk of competition from another platform that also offers the same services with more attractive rewards and product quality.
- Risk of dependency with Curve. If Curve is declining because of product substitutions, rivalry, or any factors, then Convex Finance will also go in the same direction. Nevertheless, we considered this risk occurrence to be relatively low.
News and Updates:
- Convex Finance is started to provide CVX incentives to veCRV holders. Detail of the announcement can be found here: https://twitter.com/ConvexFinance/status/1507357926155079682?s=20&t=-EioMscnvcjobRnVSXKiSg
- The project recently redeployed the vote staking contract.
- Chainlink price feed is available for CVX token.
Community & Whitepaper:
All investments are speculative and involve substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.
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