Convex Finance is a yield optimizer for leading DeFi protocol Curve.fi’s liquidity providers. It has also expanded to support similar operations for Frax Finance, giving both platforms’ users more opportunities to grow their holdings without locking up CRV and FXS tokens.
Convex lets users stake their $CRV and $FXS tokens to receive trading fees from the respective DeFi platforms and a share of boosted CRV received by liquidity providers (LPs). Convex Finance aims to achieve higher capital efficiency and improved balance between LPs and stakers on Curve.fi and Frax Finance protocols.
The Convex Finance DEX liquidity pool runs on the Ethereum blockchain and is a major contributor to the blockchain’s leading market share in the DeFi space. Also known as a DeFi 2.0 protocol, it is essentially used for swapping stablecoins and yield farming activities.
CVX is the native platform token for Convex Finance and can be used for staking on the protocol to earn rewards from Curve and Frax LP’s earnings. Users can vote-lock their CVX holdings on Convex to receive additional fees from Curve.fi and Frax Finance liquidity providers’ earnings.
Convex Finance lets users access liquidity and earn passive income on Curve.fi and Frax Finance without locking up their CRV and FXS tokens. LPs can deposit their tokens on Curve and Frax Finance and receive vote-escrowed tokens that can then be staked on Convex.
This method lets them earn higher yields by providing liquidity with Convex. Convex Finance serves as an intermediary pool where the staked tokens can be auto-harvested for earning from the rewards earned by LPs on Curve.fi and Frax Finance.
Users can stake CRV to receive cvxCRV-wrapped tokens that can be staked to earn CVX tokens on Convex. CRV deposited to Convex gets converted to veCRV while users receive the cvxCRV tokens. Users that lock up their veCRV are eligible to earn higher rewards and generate larger yields. Curve’s liquidity pool lets users exchange their cvxCRV for CRV tokens at any time, eliminating the need for locking up the tokens and reducing the debt liquidity in the DeFi market.
You can use Convex Finance for the following purposes:
1. Staking Curve and Frax Finance LP tokens
2. Converting CRV, FXS, and staking cvxCRV and cvxFXS
3. Staking CVX
The team behind Convex Finance consists of a group of anonymous developers who introduced the project in April 2021 and launched it a month later. Within the very first month of its launch, its TVL hit a high of $68 million.
As of January 2023, its TVL all-time high of $22 billion was touched in January 2022. In May 2022, the platform announced that it had distributed more than $872 million in fees and rewards among its users.
Within one year since its launch, over 31,000 users interacted with Convex and used its services. Thanks to its popularity among DeFi users, several leading DeFi protocols have also integrated with Convex, including Yearn.finance, BadgerDAO, Alchemix, LendFlare, Rari Capital, Abracadabra.money, and AladdinDAO.
In November 2022, Convex Finance announced its expansion beyond the Ethereum mainnet as part of its plans to go cross-chain. Convex expanded into Arbitrum in the month as part of its cross-chain expansion strategy.
Convex Finance could be a good investment to consider if you believe in the potential of the DeFi sector and wish to diversify your portfolio into this area. As the native token of one of the leading DeFi protocols on Ethereum, growth in the DeFi market could drive gains in the CVX price.
The Convex Finance price could also register an uptick as the protocol expands to more blockchain ecosystems. The cross-chain growth could bring in more users from other blockchain networks to use the yield optimizer, drive up liquidity, and increase the value of CVX token.
Similarly, as more DeFi protocols integrate with Convex Finance, more users could access the platform’s services and boost the CVX price statistics. The higher the yield farming and staking activities on the platform, the higher the price of Convex Finance token.
Although it is impossible to offer an accurate CVX price prediction over any duration, several fundamentals could provide insight into the price action in the Convex Finance token. These include:
The Convex Finance price could increase as more users sign up to stake their tokens on the protocol. The increased on-chain activity makes the CVX token a more valuable asset to buy and hold.
As the developers announce more integrations and expand into new blockchain ecosystems in the future, the CVX token value could rise higher in the future. The cross-chain expansion could bring more liquidity to support the price of CVX crypto.
Market sentiment is one of the biggest factors that could drive price action in CVX. A bullish or risk-on mood increases investor confidence in digital assets and DeFi, helping the price of Convex Finance climb higher. However, a bearish or risk-off mood among investors could result in sell-offs, weighing on the CVX price.
CVX is the native crypto asset of the Convex Finance protocol. Here are its most popular applications:
You can stake $CVX on Convex Finance to earn a share of liquidity providers’ CRV and FXS earnings on Curve.fi and Frax Finance, respectively. The platform fees earned will be locked as veCRV and veFXS and then tokenized as cvxCRV and cvxFXS to distribute to users who stake CVX token.
You can also vote lock CVX on Convex to enjoy voting rights and contribute to decisions on how the protocol allocates veCRV and veFXS for gauge weight votes and other proposals. You need to vote lock your CVX for at least 16 weeks to qualify.
You can also delegate the voting rights from your CVX holdings to other users on the platform or the Convex team. This method doesn’t require you to lock up your CVX tokens and is more convenient if you are unsure how to participate in the governance mechanism.
Trade Convex Finance crypto against other cryptocurrencies to profit from changing market conditions and volatility. You can buy or sell CVX against other digital assets or hold it long-term if you believe in the future potential of Convex Finance. Review the live price of Convex Finance cryptocurrency, CVX market cap, circulating supply, 24-hour trading volume, and the latest crypto news before trading Convex Finance in the market.
Here’s how you can stake $CVX and increase your crypto holdings conveniently:
1. Open the Convex Finance dApp and connect your wallet to it. Ensure that your wallet is sufficiently funded with $CVX crypto by buying the token on KuCoin or other supported platforms and transferring the tokens to your wallet.
2. Click on the Stake tab at the top of the app.
3. Head to the bottom of the page to the section called ‘Stake your CVX to earn cvxCRV.’
4. Enter the number of CVX you wish to stake and approve the transaction from your wallet.
5. After confirming the transaction, click on the Stake CVX button to deposit your holdings on the Convex Finance protocol.
6. Sit back, earn rewards, and grow your crypto portfolio conveniently by staking $CVX.
Convex Finance offers airdrops of CVX to all veCRV holders till block 12296676. veCRV holders who voted to whitelist Convex Finance on Curve.fi can also receive CVX airdrops.
You can check your eligibility for claiming CVX in this manner and confirm how many tokens you could receive at your address at this link.
If you are eligible, here’s how you can claim your CVX airdrop:
1. Visit the Convex Finance dApp and ensure your wallet is connected to its interface.
2. Click on the CVX icon on the homepage’s top right corner.
3. This will open a popup window showing how many CVX tokens you can claim.
4. Click on the Claim button to add the eligible CVX tokens to your connected wallet.