What is Convex Finance? Everything you need to know about CVX

Convex Finance (CVX) is a leading DeFi platform designed to optimize liquidity provision yields on protocols like Curve Finance. With a simple operating mechanism and low gas fees, CVX has garnered significant attention from the DeFi community.

To better understand the operation and potential of this project, let’s join AZCoin explore CVX tokens and the notable features of Convex Finance through the article below!

What is Convex Finance (CVX)?

Convex Finance is a decentralized finance (DeFi) protocol that allows users to earn optimal yields from Curve Finance without having to lock up CRV tokens (Curve DAO Token) directly. The platform enables investors to engage in staking and farming on Curve without worrying about token lock-up requirements or high gas fees, while also providing higher rewards through its reward-boosting mechanism.

Convex Finance’s primary goal is to provide an easy and efficient solution for Curve users, while attracting liquidity providers (LPs) by maximizing staking returns.

Team, investors and partners

Development team

Convex Finance was launched in 2021, with contributions from an experienced founding team in the blockchain and DeFi sectors. The founding members include:

• Charlie Noyes: An investor and co-founder of Paradigm, a blockchain investment firm co-founded by Fred Ehrsam. Charlie has also invested in major DeFi projects like Uniswap and Compound.
• Michael Egorov: A blockchain developer and founder of Curve Finance, a DeFi protocol focused on stablecoin exchange on the Ethereum platform.
• Kerman Kohli: Founder and CEO of dydx, a decentralized financial trading platform operating on Ethereum.
• Sami Rusani: Investor and founder of Divergence, a DeFi platform built on Ethereum.

These individuals have played pivotal roles in building and developing Convex Finance, contributing to its rapid growth in the DeFi sector.

Investors

Convex Finance has attracted attention and investments from notable blockchain investment funds such as Paradigm, Three Arrows Capital, DeFiance Capital, Alameda Research, and HashKey Capital. Additionally, it has garnered interest from numerous individual and institutional investors within the cryptocurrency community.

Partners

Convex Finance has established several key partnerships to support its operations within the DeFi space. Notable partners include Curve Finance, Aave, SushiSwap and Yearn Finance. Alongside these core partners, Convex Finance collaborates with various DeFi projects and blockchain developers to expand its network and enhance its operations within the DeFi ecosystem.

How Convex Finance works

Convex Finance operates by accumulating CRV tokens from users and locking them to receive rewards such as transaction fees and airdrops. Instead of users managing the lock-up and handling large token amounts themselves to maximize benefits, they can deposit CRV into Convex, which manages the process on their behalf, optimizing returns.

Users participating in Convex can earn various rewards, including transaction fees from Curve, CRV tokens, and Convex’s governance token, CVX.

Notable features of Convex Finance

Here are some key highlights of Convex Finance:

• Yield Farming: Convex Finance helps users earn rewards by providing liquidity to supported pools. Users can invest in these pools using stablecoins like USDT or DAI and receive returns from transaction fees generated within the pool.
• Gas Savings: Convex Finance offers a solution to minimize gas costs on the Ethereum blockchain through the use of the “Convex Booster” smart contract. This contract helps users optimize liquidity usage, reducing the gas fees they need to pay.
• Governance Token: CVX acts as the governance token for Convex Finance, allowing users to participate in protocol management decisions. By holding CVX, users can propose and vote on changes to the system.
• Large Community: Convex Finance has a robust community with over 30,000 members on Telegram and more than 40,000 followers on Twitter. This large community helps support and provide feedback on new decisions implemented by the protocol.
• Integration with DeFi Protocols: Convex Finance connects with several major DeFi protocols such as Curve, Yearn, and Compound. This integration offers users various investment options, helping to maximize returns from participation in liquidity pools.

Key information about CVX token

Technical specifications

• Token Name: Convex Token
• Ticker: CVX
• Blockchain: Ethereum
• Token Standard: ERC-20
• Contract: 0x4e3fbd56cd56c3e72c1403e103b45db9da5b9d2b
• Token type: Utility
• Total Supply: 100,000,000 CVX
• Circulating Supply: 76,852,851 CVX

CVX token allocation

CVX tokens are allocated as follows:

• Curve LP Rewards: 50%
• Liquidity Mining: 25%
• Team: 10%
• Treasury: 9.7%
• Investors: 3.3%
• Airdrop: 2%
  • veCRV holders: 1%
  • veCRV holders who voted to whitelist Convex: 1%

What is the purpose of the CVX token?

CVX tokens serve multiple purposes within the Convex ecosystem, including:

• Governance: CVX holders have the right to participate in crucial protocol decisions, such as reward mechanisms or improvement proposals.
• Staking: Users can stake CVX to earn additional rewards.
• Boosted Returns: Holding CVX allows users to increase their returns when participating in Curve through Convex.

Where to buy CVX tokens?

CVX tokens are currently listed on the best crypto exchanges including Binance, Coinbase, and Uniswap. Users can trade CVX through popular pairs such as CVX/USDT, CVX/ETH, and CVX/BTC on these platforms.

Where to store CVX tokens?

As an ERC-20 token, CVX can be stored in wallets that support this standard, such as Metamask, Trust Wallet, and MyEtherWallet. For enhanced security, users can opt to store CVX tokens in hardware wallets like Ledger Nano S or Ledger Nano X.

Should you invest in Convex Finance (CVX)?

Convex Finance is an attractive project in the DeFi ecosystem, particularly for those interested in optimizing returns from Curve. With its diverse reward mechanisms, CVX tokens offer governance value and higher returns for users.

However, as with any cryptocurrency investment, investors should carefully consider the risks, especially as the DeFi market remains volatile. Evaluating the project’s potential, development team, and market conditions is crucial before making an investment decision.

Conclusion

In summary, Convex Finance (CVX) has proven to be an essential part of the DeFi ecosystem by offering attractive benefits for liquidity providers. For more detailed updates on the project and the latest DeFi trends, you can refer to AZCoin’s articles!