What is Convex Finance?
Essential details:
- 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.
- 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.
- 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 The CVX deposited could be withdrawn at any time.
Why invest in Convex Finance?
Convex Finance has a maximum supply of 100 million CVX with a market capitalization of $409 million. The mint ratio of CVX/CRV decreases for every 100,000 CVX.
The supply of CVX tokens will be distributes as follows:
-
- 50% Curve LP reward
- 25% Liquid Mining
- 10% Team
- 9.7% Treasury
- 3.3% Investor
- 2% 2nd Airdrops
CVX tokens can be staked in Convex Finance to earn cvxCRV. It will provide Curve's share of the LP CRV revenue in addition to a portion of the fees. Even more value will be distributed to cvxCRV holders as the Convex platform continues to grow. In the future, CVX will be used for voting.
Whitepaper: https://docs.convexfinance.com/convexfinance/
Official Website: https://www.convexfinance.com/
