Convex Finance

About Convex Finance (CVX)

What Is Convex Finance (CVX)?

Convex Finance is a yield and governance layer built on top of Curve. It lets Curve liquidity providers earn boosted CRV rewards without locking CRV themselves, and lets CRV holders stake while staying liquid through a tokenized deposit called cvxCRV. CVX is the platform token: staking it earns a share of protocol fees, and vote-locking it controls how Convex casts the large voting position it has accumulated.

Official resources:

• Website
• Documentation
• Platform contracts on GitHub
• CVX on Etherscan
• Governance on Snapshot

Who Founded Convex Finance? (History)

Convex launched in May 2021 and the people behind it are pseudonymous; the team is not publicly identified in official documentation. The closest thing to a public roster is the multisig membership listed in the docs, naming C2tP and Winthorpe from Convex Finance alongside Benny from Llama Airforce, Tommy from Votium and Sam from Frax Finance. Convex became one of the largest holders of veCRV voting power.

How Convex Finance Works

Curve pays higher rewards to liquidity providers who lock CRV as veCRV, and veCRV also votes on gauge weights, which determine where CRV emissions flow. When a user deposits CRV, it is locked permanently as veCRV and the user receives cvxCRV one-for-one; the conversion is one-way, so exiting means selling cvxCRV on a secondary market. Liquidity providers deposit Curve LP tokens and receive a boosted rate without locking anything themselves.

Key Ecosystem Components

• cvxCRV, the tokenized veCRV deposit, stakeable for Curve admin fees in crvUSD, platform fees in CRV and CVX rewards
• vlCVX, vote-locked CVX, which directs how Convex votes with its veCRV and veFXS
• A 3-of-5 multisig that executes vote outcomes and administers a fixed set of parameters
• The Convex Treasury, allocated 9.7 percent of CVX supply and vested over one year

CVX Token Utility

CVX is minted pro rata for each CRV claimed by Curve liquidity providers on Convex, with the mint ratio decreasing for every 100,000 CVX issued. Maximum supply is 100 million, allocated as 50 percent to Curve LP rewards, 25 percent to liquidity mining over four years, 10 percent to the team, 9.7 percent to the treasury, 3.3 percent to investors and two 1 percent airdrops to veCRV holders.

Staked CVX earns a share of platform fees paid as cvxCRV. Vote-locking requires at least sixteen weeks in weekly epochs starting Thursday at 00:00 UTC, and vlCVX earns additional fees. On the Curve side, Convex charges 17 percent on CRV revenue from Curve LPs: 10 percent to cvxCRV stakers, 4.5 percent to CVX stakers, 2 percent to treasury and 0.5 percent to the harvest caller, within hard-coded ranges capped at 20 percent.

What Makes Convex Finance Unique?

Convex turned governance power into something that can be rented. By pooling veCRV and issuing vlCVX against the voting rights, it created a liquid market for the right to direct Curve emissions, and protocols needing deep stablecoin liquidity found it cheaper to acquire or bribe vlCVX than to accumulate CRV directly.

How Convex Finance Differs from Similar Projects

Curve is the underlying exchange; Convex is a layer on top and cannot exist without it. Yearn is a general vault aggregator routing capital across many protocols, whereas Convex is specialized to vote-escrow systems, and Aura Finance applies essentially the same design to Balancer and veBAL. What distinguishes Convex is that it aggregates governance weight, not merely yield.

Use Cases of Convex Finance

• Providing liquidity on Curve at a boosted CRV rate without locking CRV
• Staking CRV through cvxCRV to keep a liquid, transferable position
• Vote-locking CVX to steer Curve gauge emissions toward a specific pool

How Convex Finance Is Secured

The platform contracts were audited by MixBytes in April 2021, with later audits by PeckShield covering the Frax integration, the sidechain deployment and the staking wrapper, by Nomoi in January 2023 and by ChainSecurity in April 2023. The 3-of-5 multisig can adjust fees within hard-coded ranges and pause deposits, and documentation states it has no direct access to user deposits.

Risks and Considerations

Convex sits directly on Curve and Frax, so it inherits every risk those protocols carry in addition to its own smart contract risk. The cvxCRV conversion is permanent, the only exit is the secondary market, and cvxCRV can trade below CRV. Vote-locking is a sixteen-week illiquidity commitment with no early exit, and idle unlocked tokens can be kicked out of the locker for a bounty.

Why Convex Finance Matters

A large share of Curve voting power is intermediated through Convex, which makes Convex governance effectively part of how stablecoin and liquid staking liquidity gets allocated across DeFi.

Where Can You Buy Convex Finance (CVX)?

CVX is listed on major centralized exchanges including Binance, Coinbase Exchange, Kraken, OKX, KuCoin, HTX and MEXC, and on-chain the deepest venues are Curve itself and Uniswap v3 on Ethereum.

Storage Options After Purchase

CVX is an ERC-20 deployed only on Ethereum, so any EVM-compatible wallet will hold it, with a hardware wallet for meaningful balances and a multisig such as Safe for shared holdings.

Related Coins

• Curve DAO Token (CRV)
• Aura Finance (AURA)
• yearn.finance (YFI)
• Balancer (BAL)
• Pendle (PENDLE)