Convex Finance

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Discover Convex Finance's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is Convex Finance?

Convex Finance (CVX) is a decentralized finance (DeFi) protocol designed to maximize rewards for Curve liquidity providers. It allows users to earn trading fees and claim Curve native tokens (CRV) without locking CRV themselves. CVX serves as a governance token, rewarding participants for providing liquidity and enabling them to vote on protocol parameters. The protocol operates with minimal performance fees and no withdrawal fees, incentivizing CRV stakers and liquidity providers with CVX rewards.

How is Convex Finance used?

Convex Finance (CVX) is a decentralized finance (DeFi) protocol built on top of Curve Finance. It enhances the rewards for Curve liquidity providers and CRV token holders by offering boosted staking rewards. Here's how it works:

  • Staking CRV: CRV holders can lock up their tokens on Convex to receive cvxCRV, which grants voting rights, a portion of Curve's trading revenue, and enhanced CRV payouts. The longer the staking period, the greater the rewards.
  • Earning Boosted CRV and CVX: Convex allows liquidity providers to earn trading fees and boosted CRV without locking up CRV tokens. They can receive CRV with a high boost while still holding their CRV and earn CVX rewards.
  • CVX Token: CVX is the native platform token used for voting on how Convex allocates its veCRV towards Curve Finance. It can be staked to earn a share of Curve and Frax LP's CRV and FXS earnings. Vote-locked CVX tokens receive additional fees from Frax Finance LPs.
  • Vote Locking: Users must vote-lock their CVX tokens for 16+ weeks to participate in voting on gauge weight votes and other proposals.
  • Obtaining CVX: CVX can be bought from various decentralized exchanges (DEXs) or earned by CRV stakers and Curve liquidity providers pro-rata to CRV generated by the platform.

Overall, Convex Finance provides a platform for CRV token holders and Curve liquidity providers to earn additional interest rewards and Curve trading fees on their tokens, making it a powerful DeFi yield farming platform.

How do I store Convex Finance?

To store Convex Finance (CVX) tokens, you have several options:

  1. Tap Wallet: You can store your CVX tokens securely in the Tap Wallet, which is provided when you create an account on the Tap platform. This wallet is Ethereum-compatible and allows you to store, trade, and stake your Convex tokens conveniently.

  2. KuCoin Account: You can also hold your CVX tokens in your KuCoin account, which provides quick access to trading products like spot and futures markets, staking, and lending. KuCoin serves as the custodian of your crypto assets, ensuring security and convenience.

  3. Non-Custodial Wallets: For enhanced security and control, you can withdraw your CVX tokens to a non-custodial wallet, such as hardware wallets, Web3 wallets, or paper wallets. This option grants you complete control over your private keys but may be less convenient for frequent trading.

  1. Bit2Me Wallet: The Bit2Me wallet is another option that supports Convex Finance tokens. It is a multi-currency wallet that allows you to manage multiple currencies, create multiple wallets, and perform various operations like buying, selling, exchanging, and storing CVX tokens securely.

  2. Ethereum Wallets: Since Convex Finance operates on the Ethereum blockchain, you can also use Ethereum wallets like Metamask to interact with the Convex Finance dApp.

Regardless of the wallet you choose, ensure that it is compatible with Ethereum and that you follow best practices for securing your private keys and account information.

How to buy Convex Finance?

To buy Convex Finance (CVX) tokens, you can follow these steps:

  1. Create an Account:

    • On Coinbase, create an account and add a payment method.
    • On Uphold, create a free account and verify your identity.
    • On Tap, download the mobile app and deposit funds for free.
  2. Deposit Funds:

    • On Coinbase, start a trade and select Convex Finance from the list of assets.
    • On Uphold, choose your payment method and connect your Uphold wallet to your debit/credit card, bank account, or external crypto wallet.
    • On Tap, deposit funds using your debit card or bank transfer.
  3. Buy CVX:

  • On Coinbase, enter the amount you want to buy and complete the trade.
  • On Uphold, select the amount you want to transact and confirm the purchase.
  • On Tap, buy CVX directly with your debit card or using the deposited funds.
  1. Store or Trade:
    • On Uphold, store your CVX on the secure Uphold wallet or trade it for other assets.
    • On Tap, store your CVX in the Tap Wallet for secure storage and trading.

These platforms offer various payment methods and secure storage options to facilitate the purchase and management of Convex Finance tokens.

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History of Convex Finance

Convex Finance (CVX) is a decentralized finance (DeFi) platform that enhances staking rewards for Curve users. The project was first introduced in April 2021, aiming to boost rewards for CRV holders and liquidity providers using a simple and easy-to-navigate interface. The platform went live in May 2021, initially recording $68 million in total value locked (TVL) and later reaching its peak of $21 billion in January 2022.

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How Convex Finance works

Convex Finance (CVX) is a decentralized finance (DeFi) protocol built on top of Curve Finance. It aims to provide additional incentives to Curve users, including CRV stakers and liquidity providers. Here's how it works:

CRV Staking and veCRV

On Curve Finance, users can lock up their CRV tokens to receive veCRV, which grants voting rights and a portion of the platform's trading revenue. The longer the CRV tokens are locked, the more veCRV users receive.

Convex Finance and cvxCRV

Convex Finance allows CRV stakers to lock up their tokens on its platform, receiving cvxCRV in return. cvxCRV holders earn trading fees from Curve, boosted CRV rewards, and a portion of Convex fees. This setup allows users to earn more rewards without having to lock up their CRV tokens directly on Curve.

CVX Token and Staking

CVX is the native token of Convex Finance. It can be staked to earn a share of Curve and Frax LP's CRV and FXS earnings. Staked CVX tokens receive additional fees from Frax Finance LPs. Users can vote-lock their CVX tokens for 16 weeks or more to participate in voting on how Convex allocates its veCRV and veFXS towards gauge weight votes and other proposals.

Boosted Rewards

Convex Finance offers boosted CRV rewards to liquidity providers. By staking CRV tokens on Convex, users receive cvxCRV, which gives them a claim to trading fees from Curve, boosted CRV rewards, and Convex fees. This setup provides more incentives for liquidity providers compared to staking directly on Curve.

Governance and Future Plans

In the future, CVX tokens will be used for governing Convex Finance. The platform aims to provide a more comprehensive DeFi yield farming experience, competing with other protocols like Yearn Finance for Curve liquidity.

Overall, Convex Finance enhances the rewards for Curve users by providing a more lucrative staking and liquidity provision experience, making it an attractive option in the DeFi space.

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Convex Finance's strengths

Convex Finance (CVX) has several strengths that contribute to its success in the decentralized finance (DeFi) space:

  1. Boosted Curve Staking:

    • Convex Finance offers boosted Curve staking rewards, which attract liquidity providers and CRV stakers. This is achieved by providing additional DeFi yields on top of the standard Curve rewards.
  2. Simplified Yield Optimization:

    • Convex focuses on a single, straightforward product: boosted Curve staking. This simplicity has contributed to its success, as it caters to a specific need in the market.
  3. cvxCRV Tokens:

  • By staking CRV tokens on Convex, users receive cvxCRV tokens, which grant access to a broader range of rewards, including Curve trading fees and tokens. This provides an incentive for users to participate in the Convex ecosystem.
  1. Governance and Fee Sharing:

    • The CVX token is used for governance and fee sharing. Holders of CVX tokens receive a share of Convex platform fees, aligning their interests with the platform's growth.
  2. High APY Staking:

    • Convex Finance offers high annual percentage yields (APY) for staking CVX tokens, making it an attractive option for passive income seekers. APY rates can reach up to 125% in some cases.
  3. Strong Market Presence:

  • Convex Finance has a significant market capitalization and is listed on prominent exchanges, ensuring liquidity and accessibility for users.

These strengths have positioned Convex Finance as a prominent player in the DeFi yield farming space, particularly among Curve Finance users.

Convex Finance's risks

Convex Finance (CVX) carries several risks that investors should be aware of before investing. These risks include:

  1. Volatility Risk and Liquidity Risk: CVX's price can fluctuate significantly, and liquidity issues may make it difficult to buy or sell the token quickly enough or at a favorable price.

  2. Short History Risk: CVX has a relatively short history, which can make it challenging to assess its long-term performance and stability.

  3. Demand Risk: Changes in demand for CVX can impact its value, and if demand decreases, the token's price may drop.

  1. Forking Risk: CVX operates on a blockchain and is susceptible to forking, which can lead to security breaches and other issues.

  2. Code Defects: Smart contracts used by CVX can have vulnerabilities, despite undergoing audits, which can result in security breaches and losses.

  3. Regulatory Risk: Changes in regulations or laws can negatively impact the use, transfer, or value of CVX.

  1. Electronic Trading Risk: Technical issues with trading platforms can lead to losses or difficulties in executing trades.

  2. Cybersecurity Risk: CVX is vulnerable to hacking and other cybersecurity threats, which can result in the loss of funds.

  3. Dependence on Curve Finance and Frax Finance: Convex Finance integrates with these platforms, so any issues with them can also affect CVX.

  1. Anonymous Founders: The development team behind Convex Finance remains anonymous, which can raise concerns about accountability and transparency.

  2. No Legal or Regulatory Obligation to Disclose Information: The CVX community is not obligated to disclose material information to the public, which can make it difficult for investors to make informed decisions.

These risks highlight the importance of thorough research and risk assessment before investing in Convex Finance (CVX).

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Did Convex Finance raise funds?

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Convex Finance’s team

  • Convex Finance was created by a team of anonymous developers.

Whalee AI

The fundamental analysis assistant for crypto value investors.

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