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CRYPTO PROJECT RESEARCH
What is Convex Finance?
Convex Finance (CVX) is a novel decentralized finance (DeFi) protocol built on top of Curve Finance, a decentralized exchange (DEX) that focuses on stablecoins and has large liquidity pools.
Convex Finance aims to boost the rewards for Curve liquidity providers (LPs) and CRV stakers, by simplifying the process of staking Curve LP tokens and earning boosted CRV, CVX, and other tokens.
Convex Finance also allows users to participate in the governance of both Curve and Convex, by holding cvxCRV and CVX tokens respectively.
Convex Finance works by pooling the veCRV (voting escrow CRV) tokens from CRV stakers and distributing them to Curve LPs who deposit their LP tokens into Convex.
This way, Curve LPs can enjoy a higher boost factor on their CRV rewards, without having to lock their CRV tokens for a long time. In addition, Curve LPs also earn CVX tokens, which are the native token of Convex Finance and can be staked to earn more CVX and a share of the platform fees.
CRV stakers who deposit their CRV tokens into Convex also receive cvxCRV tokens, which are a representation of their veCRV and can be used to vote on both Curve and Convex proposals. cvxCRV holders also earn additional CRV rewards on top of CVX tokens and Curve trading fees.
Convex Finance was launched in May 2021 by an anonymous team of developers who go by the pseudonyms of Charlie, Larry, and Moe.
The team has extensive experience in the DeFi space and has contributed to projects such as Yearn Finance, SushiSwap, and Synthetix.
The team claims to be motivated by the vision of creating a user-friendly and efficient platform for Curve users and CRV holders and to foster a strong and inclusive community around Convex Finance.
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