Article Summary, Automatically Generated By AI
Summary of Convex Finance (CVX)
Overview
- Convex Finance is a DeFi protocol that allows Curve liquidity providers to earn a share of trading fees on Curve without staking liquidity there.
- It provides CRV stakers with better capital efficiency and positions Convex Finance as an important player in the Curve wars.
Founders
- Developed by a team of anonymous developers.
Uniqueness
- Unique incentive structure to accumulate as much TVL as possible to control Curve Finance.
- Targets CRV holders and Curve liquidity providers in two ways:
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About Convex Finance: Unlocking the Power of Decentralized Markets
Introducing Convex Finance (CVX): A Comprehensive Overview
Convex Finance is a decentralized finance (DeFi) protocol that empowers Curve liquidity providers to reap a portion of trading fees on Curve, sans the need to stake liquidity directly. By staking with Convex, LPs can capitalize on amplified CRV rewards and lucrative liquidity mining incentives. This paradigm shift affords CRV stakers enhanced capital efficiency, thereby solidifying Convex Finance’s position as a pivotal player in the Curve ecosystem.
Convex has joined the fiercely competitive fray to amass as much control as possible over Curve Finance, the premier stablecoin exchange. The greater the CRV token holdings, the greater the sway over interest rates on Curve, the world’s largest decentralized exchange (DEX) by total value locked (TVL). As a result, the “Curve wars” have become an ongoing struggle for dominance over what is arguably the most pivotal protocol in the decentralized finance (DeFi) landscape.
The Visionaries Behind Convex Finance: Meet the Founders
Convex Finance was conceived by a team of anonymous developers. Notably, unlike numerous dubious cryptocurrency projects, Convex Finance has established itself as a pivotal and influential protocol in the realm of decentralized finance, thereby presenting a relatively low-risk investment opportunity.
Unveiling the Unparalleled Advantages of Convex Finance
Convex Finance assumes a pivotal position in the Curve wars, owing to its distinctive incentive structure. Its singular focus is to amass the largest possible Total Value Locked (TVL) in pursuit of the protocol’s overarching objective: to command a substantial stake in Curve Finance. In essence, Convex Finance specifically targets CRV holders and Curve liquidity providers, employing a two-pronged approach:
- By staking CRV, holders are rewarded with cvxCRV.
- Curve liquidity providers (LPs) are eligible for enhanced rewards when they stake their LP tokens through Convex.
Curve Finance introduces veCRV (vote-escrowed CRV), a novel token that rewards liquidity providers for staking CRV. In essence, veCRV represents time-locked CRV tokens, which not only amplify voting power but also yield enhanced rewards, both of which are directly correlated with the lock-up period of the underlying CRV. For a more in-depth understanding of veCRV, please refer to this resource. Notably, CRV rewards can soar up to 2.5 times the initial rewards, although achieving the maximum rewards becomes increasingly challenging as the deposited liquidity increases.
Alternatively, it is virtually unfeasible for a single entity to amass sufficient liquidity to achieve the maximum boost, which is where Convex Finance intervenes. By functioning as a cartel, Convex aggregates the assets of individual stakers, thereby harnessing their collective liquidity. This enables even modest investors to stake their Curve Finance LPs with Convex, thereby earning augmented rewards that would otherwise remain elusive. In doing so, they receive:
- The accrued interest on their contributed liquidity.
- A proportion of the Curve platform’s trading fees.
- The amplified rewards courtesy of Convex.
- CVX tokens
Moreover, by staking your CRV tokens, you can earn cvxCRV and unlock the following benefits:
- Rewards in veCRV
- Fees generated from Convex trading
- CVX token allocations
- Exclusive airdrops for veCRV token holders
What Is the Circulating Supply of Convex Finance (CVX) Coins?
CVX boasts a total supply of 100 million tokens, allocated according to the following distribution:
-
50% Curve LP Rewards
Pro-rata distribution of CRV rewards received on Convex
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25% Liquidity Mining Incentives
Four-year distribution program, currently featuring CVX/ETH and cvxCRV/CRV incentive schemes
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9.7% Treasury Allocation
Vested over a one-year period, earmarked for future incentives and community-driven initiatives
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1% veCRV Holder Airdrop
Instantly claimable rewards for veCRV holders
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1% veCRV Holder Airdrop (Whitelisted Convex Voters)
Instantly claimable rewards for veCRV holders who voted to whitelist Convex
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3.3% Investor Allocation
Vested over one year, with 100% of investment funds utilized to pre-seed boost and locked indefinitely (no cvxCRV minting)
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10% Convex Team Allocation
Vested over a one-year period
CVX tokens are minted at a 1:1 parity with staked CRV, enabling holders to participate in proposals within the Convex Finance protocol.
The Convex Finance Network’s Security Mechanisms: A Robust Framework
Convex has undergone a rigorous audit by MixBytes, with the comprehensive report available
here
. Notably, its treasury is fortified by a robust 3-of-5 multisignature arrangement, comprising the following esteemed parties:
- C2tP – Convex Finance Partner
- Winthorpe – Convex Finance Proponent
- Charlie – Curve Finance Pioneer
- Tommy – Votium Visionary
- Sam – Frax Finance Founder
Notably, a malfunction in one of the smart contracts in early March 2022 necessitated the re-deployment of the vote-locking contract, which, in turn, triggered a decline in the value of CVX.
Where to Acquire Convex Finance (CVX): A Comprehensive Guide
CVX is listed on prominent cryptocurrency exchanges, including Binance, OKX, Bitget, Mandala Exchange, and Hotcoin Global, ensuring widespread accessibility.
Associated Resources:
Discover Solidly Exchange (SOLID), a pioneering B2B stablecoin exchange platform.
Discover Redacted Cartel (BTRFLY), a decentralized autonomous organization (DAO) that offers lucrative rewards for Curve (CRV) liquidity provider tokens.
Discover the Power of Philanthropy in the Digital Age: A Comprehensive Guide to Crypto Donations.
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