Convex Finance Price (CVX)

First, with its help liquidity provides and stakers can get a higher return on their investment on Curve Finance. As the platform is fueled by a native governance token CRV, users get another LP token veCRV as a reward for staking it. While the original staking rewards that one may obtain are quite humble, Convex Finance offers a much more profitable solution for those who stake these tokens on its own platform. As a result, users earn not only Curve Finance trading fees, but also boosted CRV together with CVX with the final sum being much higher than the one offered by Curve.fi. Also, the share of transaction fees from trades made on Curve is much higher with Convex as it has one of the largest shares of TVL (Total Locked Value) among other similar platforms. Numerous airdrops that veCRV holders get from other projects listed on Convex represent one more bonus serving to attract more users who want to make passive income on the blockchain.

Second, by offering liquidity provides higher incentives for supporting the network, Convex Finance attracts more participants, thus contributing to the overall stability of the network. Therefore, all the interested parties win as Curve.fi obtains more liquidity, Convex gets more LPs while users themselves get higher rewards.

What’s more, with Convex Finance, liquidity provides get such benefits as zero deposit and withdrawal fees without having to lock any CRV. This means that they can redeem their tokens at any time and use them for their other needs.

Finally, owning CVX tokens gives users the right to vote for different proposals within the system. Most importantly, they can vote on which of the Curve pools will get boosted rewards that imply the increase of the yield by 2.5x. Eventually, the pools with such high APR attract even more LPs and improve the overall liquidity even further. An interesting fact is that projects can bribe the voters on a CRV’s subdomain dedicated for this purpose. Though such an approach doesn’t add points to the overall honesty of the project, it still gives users more incentives to use the platform as they get one more option to increase their rewards.

CVX token

As it has been mentioned earlier, CVX is the key utility token fueling Convex Finance. It can be staked to earn a share of Curve.fi fees in the form of cvxCRV, i.e. tokenized CRV. The newly obtained tokens can be traded out within the cvxCRV/CRV liquidity pool as they are minted at a 1:1 ratio for every staked CRV.

The CVX token can be obtained in two ways. First, CRV stakers and liquidity providers get it as a reward for supporting the system. Second, it is distributed to cvxCRV/CRV and CVX/ETH liquidity providers who contribute their tokens to the pools through a so-called Masterchef staking reward contract available on the Convex Finance platform.

With a total supply of 100 million coins, CVX is distributed in the following way. 50% or tokens are dedicated as a reward to liquidity providers, 25% of tokens are assigned for liquidity mining, 9.7% are reserved in the Treasury, 10% are granted to the team members while the rest is distributed across other investors and veCRV holders. At the time of writing, the use of Treasury funds is at the Convex team’s disposal, but its members hope to change this fact and give it away to the community in the future.

Being an ERC-20 token, CVX can be stored on any Ethereum-compatible wallet such as Metamask, MyEtherWallet, or Coinomi. CVX is available for trading on a number of centralized exchanges such as Binance, Huobi Global, and KuCoin. Also, it is supported by decentralized platforms such as SushiSwap and UniSwap.

Expansion to Frax Finance

In addition to Curve.fi, Convex Finance plans to deploy a similar solution on another protocol Frax Finance pursuing its goals of growth. Though the Frax platform is not as popular among cryptocurrency enthusiasts as Curve, it still possesses a solid share of the market. Therefore, the move is justified. The expansion implies the launch of additional LP tokens, namely cvxFXS and veFXS that will play roles similar to cvxCRV and veCRV in the system.

Convex Finance security

The platform was audited by a smart contract auditing company MixBytes which has a number of other famous blockchain projects in its portfolio such as Aave, Yearn.Finance, SushiSwap, and many more.

The Convex treasury is secured by multisig that requires 3 signatures out of five that include the following members: C2tP from Convex Finance, Winthorpe from Convex Finance, Charlie from Curve Finance, Tommy from Votium, and Sam from Frax Finance. However, in March 2022, a bug was discovered in one of the Convex smart contracts which made the team fix the vote-locking contract. The project features an ever-going bounty program offering generous rewards to those who discover any bugs in the code and report them to the team without revealing them publicly.

Another security review conducted by OpenZeppelin earlier in 2021 discovered a vulnerability that could potentially have given the Convex multisig direct control over all funds locked within the system which made up approximately $15 million by that date. The issue has been successfully patched and eliminated.