💡 Convex is a yield optimisation platform build on top of Curve Finance. Convex helps users attain better yield on their Curve LP positions with minimum management requirements whilst remaining liquid
$CVX is essentially a levered ‘wrapper’ for $CRV (Curve finance). The Curve voting power that Convex accumulates is directly passed on to $CVX holders who lock their tokens, known as vlCVX (vote locked CVX).
Demand for $CVX mainly comes from the demand for the underlying $CRV & market demand due to yield provided by protocol bribes. As long as Curve maintains market demand and has a stable swap liquidity moat then $CVX should also reflect this demand.
Convex creates value by providing a yield optimisation service for Curve LPs/CRV holders & by also allowing protocols to direct liquidity to their products in a more efficient way.
Convex takes a 16% fee in exchange for its yield optimisation service, which is subsequently paid to stakers. $CVX holders also get bribes from protocols wanting to use the underlying veCRV voting power. Meaning that these bribes are a form of yield for holders. Token demand will reflect this somewhat, thus reflecting value of asset.
Convex takes a 17% fee cut from their Curve and Frax optimisation solutions. There is no treasury allocation for these fees, they simply go to CVX and derivatives (cvxCRV & cvxFXS) stakers.
|Problems & Solutions|
CVX is an attractive alternative for the lay user who wants to be exposed to the Curve ecosystem due to its ease of use and low maintenance. veCRV is never released meaning that even if Convex loses market share the acquired veCRV will linger on as a factor in demand for a long time to come.
... coming soon
Convex launched with 100M max supply
Convex starts to accumulate veFXS and expands to Frax ecosystem
vlCVX contract re-deployed
Due to a potential security risk, the vlCVX contract was redeployed
Allocation and Emission.
No calculation connected