Convex Finance (CVX)
Convex Finance was launched in April 2021 by a group of anonymous developers aiming to enhance rewards for CRV holders and liquidity providers. The platform's native token, CVX, was introduced for airdrops and rewards. After going live in May 2021, Convex Finance quickly grew, achieving $68 million in total value locked (TVL) within the first month and peaking at $21 billion in January 2022. By May 2022, the platform had distributed $872.8 million in fees and rewards.
Convex goes cross chain
In November 2022, Convex Finance expanded to additional blockchains, starting with Arbitrum. This allowed liquidity providers to utilize Convex's boosting mechanics beyond Ethereum, improving user experience and reducing gas costs. The cross-chain expansion also facilitated partnerships with other projects and decentralized autonomous organizations (DAOs).
| Ticker | CVX |
| Category | Decentralized Finance (DeFi) |
| Website | https://www.convexfinance.com/ |
| @convexfinance | |
| Telegram | convexEthChat |
| Contract Addresses | |
|---|---|
| ethereum | 0x4e...2b Copied! |
Launch airdrop
Convex Finance airdropped CVX tokens to veCRV holders and those who voted to whitelist Convex in a Curve.fi governance vote.
veCRV holder airdrop
The veCRV holder airdrop distributed 1% of the CVX supply, weighted by the amount of veCRV held at a specific snapshot in April 2021. Platforms holding veCRV for multiple users allocated distributions directly to users.
Whitelist vote airdrop
An additional 1% of CVX tokens was evenly distributed to users whose veCRV was used to vote for Convex Finance's contract whitelisting. Platforms distributing veCRV for multiple users ensured direct allocation to their users.
Overview of Convex Finance
Convex Finance is built to enhance rewards for CRV stakers and liquidity providers through a user-friendly interface. It simplifies staking on Curve and CRV-locking using its native token, CVX.
Tokenomics
CVX token
The CVX token is the native cryptocurrency of the Convex ecosystem, minted proportionally for each CRV token claimed by Curve's liquidity providers. CVX token holders share platform fees and have governance rights, enabling participation in protocol decisions, proposal voting, and receiving incentives.
cvxCRV (Tokenized veCRV)
- Tokenized deposits are minted 1:1 for each CRV locked in the platform.
- Stake to receive platform fees (CRV), CVX, and veCRV rewards (3CRV).
Fees
The platform charges a 16% total fee, with 10% going to cvxCRV stakers, 5% to CVX stakers, and 1% to harvest callers. This last percentage covers gas costs for reward distribution contracts.
Convex for Frax LPs
cvxFXS: Tokenized veFXS
Frax liquidity providers can leverage Convex Finance's boosting mechanics to enhance their positions. By staking LP tokens on Convex, they can engage in a socialized boosting model.
Staking process for cvxFXS
LPs can stake their veFXS tokens on Convex by creating a vault, approving, and depositing the tokens across three transactions.
Elevated earnings with cvxFXS
Frax LPs can optimize rewards through time-boosted earning with cvxFXS. Locking tokens for longer durations amplifies FXS rewards, culminating in maximum returns over up to three years.
Governance with cvxFXS
Holders of vlCVX receive 7% of FXS emissions from Convex-staked pools and have voting rights on Frax governance proposals.
Single-sided staking with cvxFXS
Since February 2023, single-sided staking for cvxFXS has been available, redirecting platform fees to cover veFXS and cvxFXS fees, thus simplifying the staking process.
cvxFPIS: Tokenized veFPIS
Frax liquidity providers can also utilize cvxFPIS, mirroring the cvxFXS model. This offers additional participation opportunities in Convex Finance.
Staking process for cvxFPIS
LPs can stake veFPIS tokens on Convex by creating a vault, approving, and depositing the tokens across multiple transactions.
Elevated earnings with cvxFPIS
cvxFPIS stakers can enhance FXS rewards, receiving both FPIS and CVX tokens as rewards.
Partnerships
Frax Finance
Frax Finance has deployed part of its treasury to the FRAX pool on Convex Finance, holding and staking earned cvxCRV and CVX rewards for long-term alignment.
BadgerDAO
BadgerDAO has developed Helper Vaults for Convex Finance, allowing users to auto-compound cvxCRV and CVX earnings.
OlympusDAO
OlympusDAO has deployed excess treasury funds into Convex Finance's liquidity pools to earn fees, CVX, and CRV, with plans for additional capital deployment in the future.
Other protocols integrating with Convex include Yearn Finance, Alchemix, and Abracadabra.money.