Convex Finance

Convex Finance is a decentralized finance (DeFi) protocol that enables Curve liquidity providers to earn a share of the trading fees on Curve without needing to stake their liquidity directly there. Instead, liquidity providers can stake with Convex to receive enhanced CRV and liquidity mining rewards. This setup offers CRV stakers a more efficient use of their capital, making Convex Finance a key player in the ongoing "Curve wars."

Convex is actively competing to gain significant control over Curve Finance, the largest decentralized exchange (DEX) globally when considering total value locked (TVL). The more CRV tokens a protocol controls, the greater its influence over interest rates on Curve. This competition, known as the "Curve wars," is a strategic battle for dominance over what is arguably the most critical protocol in the DeFi space.

Convex Finance was created by a group of anonymous developers. Despite the anonymity often associated with riskier investments like many meme coins, Convex Finance is regarded as a major and influential protocol within the decentralized finance sector, making it a relatively low-risk option.

Convex Finance stands out in the Curve wars due to its distinct incentive framework. The protocol's main objective is to gather as much total value locked (TVL) as possible in order to control a larger portion of Curve Finance. Convex Finance focuses specifically on CRV holders and Curve liquidity providers through two primary methods:

1. CRV holders can stake their CRV to receive cvxCRV.
2. Curve liquidity providers can stake their LP tokens with Convex to earn enhanced rewards.

Curve Finance offers veCRV (vote-escrowed CRV) as a reward for staked CRV, granting increased voting power and rewards based on the lock-up duration of the CRV. These rewards can be as much as 2.5 times the initial amount, though achieving the maximum boost becomes increasingly challenging with higher liquidity deposits.

Essentially, it's almost impossible for an individual to stake enough liquidity to reach the maximum reward boost. This is where Convex Finance intervenes, acting like a collective that pools the assets of individual stakers to benefit from the combined liquidity. Even small-scale investors can stake their Curve Finance LPs with Convex and gain rewards that would otherwise be out of reach. They receive:

* Interest on their liquidity.
* A portion of Curve's trading fees.
* Enhanced rewards from Convex.
* CVX tokens.

Additionally, staking CRV tokens to get cvxCRV yields:

* veCRV rewards.
* Convex trading fees.
* CVX tokens.
* Airdrops for veCRV holders.

Convex Finance's CVX tokens have a total supply of 100 million, distributed as follows:

* 50% Curve LP rewards, awarded pro-rata based on CRV received through Convex.
* 25% Liquidity mining, distributed over four years, including current CVX/ETH and cvxCRV/CRV incentive programs.
* 9.7% Treasury, vested over one year and allocated for future incentives or community-driven initiatives.
* 1% veCRV holders, available through an airdrop immediately.
* 1% veCRV voters who whitelisted Convex, also instantly available through an airdrop.
* 3.3% Investors, with funds vested over a year—all investment funds are used to pre-seed boost and locked permanently (no cvxCRV is minted).
* 10% Convex Team, vested over one year.

cvxCRV tokens are minted at a 1:1 ratio for each CRV staked. CVX tokens allow participation in governance proposals within the Convex Finance protocol.

Convex underwent an audit by MixBytes, and you can view the findings here. The treasury's security is maintained by a 3-of-5 multisig system including these parties:

* C2tP - Convex Finance
* Winthorpe - Convex Finance
* Charlie - Curve Finance
* Tommy - Votium
* Sam - Frax Finance

However, a flaw in one of the smart contracts in early March 2022 led to the team redeploying the vote-locking contract, which resulted in a decrease in CVX's price.

You can purchase CVX on platforms such as Binance, OKX, Bitget, Mandala Exchange, and Hotcoin Global.