Convex Finance (CVX) Research

Convex Finance (CVX) Research Details

Convex Finance (CVX) Convex Finance

INTRODUCTION

Convex Finance is a well-designed platform that lets users make the most of the benefits of holding their CRV tokens, which are native to the Curve Finance platform. Reward and fee payments can be made to people who own CRV tokens so that they can make money without needing to lock their tokens.

Liquidity providers create CRV tokens by locking them on Curve Finance using a complex platform. The Convex Finance platform is made to help long-term holders of CRV tokens get the most out of their investments without locking them up. With this easier process, you can get more rewards through the platform by staking and by providing liquidity. People who get rewards from Convex Finance get them in the form of CVX, its own cryptocurrency. Anyone can take advantage of Convex Finance's benefits, and returns are maximised with a small performance fee and no withdrawal fee.


HISTORY AND FOUNDER

Convex Finance was made to work with Curve Finance's functions. Curve was started in January 2020 as a stablecoin liquidity aggregator. It has a complicated transaction process that can be difficult for people who aren't familiar with it. In simple terms, Curve Finance needs a large amount of liquidity from liquidity providers in order to have a successful exchange volume. In exchange, those who provide liquidity get CRV tokens as rewards for yield farming. The more CRV tokens someone locks, the more they can increase their CRV rewards from the liquidity pool.

Convex Finance was made by a group of anonymous developers. But, unlike many shitcoins, Convex Finance is seen as one of the most important and influential protocols in decentralised finance, making it a fairly low-risk investment.


REASON TO BUILD THE PROJECT

When Convex Finance was created, its creators had two main goals: to help Curve Finance generate more liquidity and to increase CRV rewards for liquidity providers and stakers. The well-designed platform has already shown its value to Curve liquidity providers and Curve Finance, and it continues to be optimised so that it can provide even more value.


BASE OF PROJECT

Providing Liquidity- Users can deposit LP tokens from Curve into the Convex protocol. These liquidity providers are then paid on Curve with more CRV rewards since other users have also locked their CRV tokens with Convex. The boost comes from other CRV stakers. In essence, Convex boosts incentives by promoting widespread usage.

Staking- It lets Curve holders and liquidity providers earn more rewards on the positions they already own and hold. Convex Finance enables users to stake CRV tokens in return for cvxCRV tokens. Similar to LP tokens, these reflect your staked position on Convex and may be exchanged at any time for CRV or any other token.


USE CASE

The CVX token can be used for the following:

  • CVX can be staked on Convex Finance to get a part of Curve LP's CRV earnings.

  • Staked CVX will get its part of the fees as cvxCRV (tokenized veCRV). This is done to maintain CRV in the system building boost, however users can trade out their cvxCRV via the cvxCRV/CRV liquidity pool.

  • Vote-locked CVX tokens earn additional fees from Curve.fi and Frax Finance limited partnerships.

  • Convex CRV fees that would be refunded to CVX staking participants are locked in veCRV, tokenized as cvxCRV, and distributed to the CVX staking participants.

  • CVX is used to vote on the allocation of Convex Finance's veCRV towards Curve.fi gauge weight votes.


MAJOR NEWS AND EVENTS

DATE

NEWS/EVENTS

IMPACT

06/07/2022

Convex jumps 57% after the token unlock gives a bullish catalyst

+57% Increase

22/12/2021

Convex announced that it would be expanding its scope beyond Curve Finance by introducing support for the emerging Frax Finance stablecoin ecosystem

+40% Increase


CONCLUSION

Convex Finance gives its token holders a lot of benefits, like getting rid of Curve trading fees and improving CRV rewards for its users. There is a lot of activity on the platform, and it has been steadily growing since it started. With increased rewards and other benefits for Frax and the chance for more growth, Convex Finance is a platform to keep an eye on.


DISCLAIMER

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto products are currently unregulated and subject to market risk. Please seek independent financial advice or do your own research before investing.