Convex Finance

What is Convex Finance (CVX)?

CVX is a native token Convex Finance platform. Convex Finance is a decentralized protocol powered by Blockchain Curve Finance (CRV) and expands the services and rewards provided to Curve stakeholders and liquidity providers (LPs).

Using CVX tokens, Curve Finance liquidity providers can earn increased reward for the assets at stake. Its goal is to help LPs accumulate as many CRV tokens as possible to maximize their earning potential. You can see Convex’s price performance and the market trends it follows in the chart above.

What is the history of convex finance?

Unlike Curve Finance, the developers of Convex Finance remain anonymous. The goal was to leverage the staking system used by the Curve Finance protocol to maximize the rewards that stakeholders and liquidity providers can earn.

Curve Finance is a decentralized exchange focused on trading stablecoins – crypto-assets whose value is tied to another asset, for example, the US dollar or euro. It allows users to earn additional rewards by staking their assets and provides them veCRVor CRV tokens deposited as a result of voting.

Convex Finance officially launched in May 2021. At the time of release, the price of CVX was around $6. Since then, the token has been volatile and its value has generally followed the same trends as the CRV token.

Given the limited supply of tokens and the high chances of making money on staked assets, many protocols, including Convex Finance, have been designed to maximize profits for liquidity providers.

A significant peak was reached on January 1, 2021, when the price of CVX crossed $50 for the first time and even reached $62.69. A year after the official launch, in May 2022, the asset began to decline, although its price was recorded at over $12, which is double the price recorded at launch. Shortly after, Convex was impacted by the crash of the cryptocurrency market, which dropped to $4 in June.

Since CVX’s launch, there has been one major protocol incident. In March 2022, a bug was discovered in one of the smart contracts it uses. The smart contract with vote blocking had to be redeployed on the network. This caused the price of Convex Finance to fall briefly, although it recovered towards the end of the month.

What are the features of convex finance?

Convex Finance’s offering of cryptocurrency assets has a hard limit of 100 million. That’s why, the asset is deflationary The price of CVX is expected to rise as it becomes increasingly rare. This counts volatile asset and experiences frequent fluctuations.

As stated in the documentation, half of CVX’s total supply is allocated as rewards for liquidity providers in the network, with a quarter allocated to liquidity mining. Almost 10% of each of them is dedicated to the Treasure and the development team. Investors are allocated just over 3% and veCRV holders are allocated 2%.

Although the protocol was created on top of Curve Finance for the specific purpose of leveraging platform rewards, The price of Convex Finance is in no way linked to the value of CRV. Each time CRV is staked, a new cvxCRV token is created with a 1:1 ratio.

Convex Finance helps users maximize your productivity by optimizing the boost on Curve Finance. Liquidity providers receive a veCRV token for their contribution. By placing bets through Convex, the rewards increase significantly. The goal is to maximize the total value locked (TVL).

There are four types of rewards that stakeholders and liquidity providers can earn using Convex Finance – an interest rate proportional to the liquidity the user provides, a portion of the distributed trading commissions, the booster provided by Convex, and the Convex Finance tokens themselves.

By using the Convex Finance coin, liquidity providers can be eligible to earn trading commissions. In addition, they can receive enhanced CRV. To simplify the process, liquidity providers do not need to lock CRV in a smart contract to start receiving increased rewards.

Convex Finance offers its users zero commission for deposits and withdrawals, which makes the service more cost-effective. Users do not need to lock CRV tokens and their assets can be redeemed at any time they choose.

CVX resources can also serve control tokens for the record. Token holders have the right to vote on proposals such as protocol changes and upgrades. In turn, the CRV tokens they earn or exchange can be used to operate the Curve DAO.

Although the Convex Finance crypto protocol only applies to bets on Curve Finance, the team plans to expand to other platforms, such as Frax Finance. However, it has not been established whether the protocol will be blockchain independent.