What is Convex Finance (CVX) How It Works & Where To Buy It?

Convex Finance (CVX) is a DeFi lending protocol built atop Curve Finance. The DeFi protocol rewards Curve stakers and liquidity providers with yields.

The CVX token is the native token of the protocol – CVX is currently the 80th largest cryptocurrency by market capitalization.

How Convex Finance (CVX) Works

Individuals that stake CRV and participate in Curve liquidity provision can earn generous yields from the DeFi protocol. Essentially, Convex finance offers boosted Curve staking.

It may seem like a relatively basic protocol but the protocol’s simplicity is what has made it so incredibly popular – Convex Finance has a total value-locked (TVL) of more than $5 billion.

Curve is a decentralized exchange with a predominant focus on stablecoins. Stablecoins are not volatile like other cryptocurrencies and this makes stablecoins a great option for liquidity providers seeking to avoid impermanent losses.

Curve liquidity providers are already well incentivized with the current structure – LPs receive Curve tokens that can be converted into veCRV.

veCRV is CRV that is time-locked, these tokens give veCRV holders voting rights and other exclusive features. Holders of veCRV also have boosted CRV incentives from liquidity pools.

Individuals are able to earn rewards on their Curve LP tokens up to 2.5x higher than normal – the amount of veCRV tokens required to be deposited changes accordingly.

What Is Convex Finance (CVX) Used For?

The Convex Finance protocol allows CRV token holders to earn more rewards in a lucrative way. Users can participate in several ways, even those that aren’t LPs (liquidity providers).

Individuals can purchase CRV tokens and stake CRV tokens on the Convex Finance platform. Convex rewards users that stake CRV tokens with cvxCRV tokens.

These cvxCRV tokens allow holders to receive:

• veCRV rewards from the Curve exchange
• A portion of Convex platform earnings
• Additional CVX tokens
• Airdrops to veCRV holders.

Although there are a number of benefits for staking CRV tokens on Convex, there is one notable catch – once CRV tokens become cvxCRV tokens they can’t be converted into CRV tokens again. Essentially, once an individual stakes their CRV tokens on Convex, they receive permanent rewards from both Curve and Convex’s trading fees and tokens.

Additionally, CVX tokens can be traded on multiple cryptocurrency exchanges. CVX tokens, like other cryptocurrencies, experience daily price fluctuations. These fluctuations make trading CVX tokens an appealing option for arbitrage and swing traders.

Where To Buy Convex Finance (CVX) Tokens

CVX tokens are frequently traded on several of the popular cryptocurrency exchanges. The unique incentives created by Convex make it an appealing DeFi protocol – in recent months CVX has grown to become one of the most traded cryptocurrencies on the market.

Before purchasing CVX tokens, users will need to deposit fiat money onto an exchange, sequentially, CVX tokens will be credited to their relevant CVX digital wallet on the exchange.

The crypto exchanges below are the safest place where you can buy, sell and store CVX tokens.

• Gate.io
• Huobi
• KuCoin
• Crypto.com

CVX is an ERC-20 token which means it can easily be stored on any Ethereum-compatible wallet. Some of the most popular wallets include Trust Wallet and MetaMask.

About Convex Finance (CVX)

How long has Convex Finance (CVX) existed?

Convex Finance was initially launched on the 17th of May by Ricardo Rosales. The protocol has performed incredibly well since its launch and has already amassed a market cap that is among some of the largest in the world. The TVL (the total value of cryptocurrency locked in a contract) in the Convex Finance protocol is significantly larger than most protocols.

What’s controversial about Convex Finance (CVX)?

There are so many emerging projects entering the crypto space. Many projects take advantage of or exploit unwitting retail investors that lack fundamental knowledge of the crypto space.

Individuals are encouraged to do as much research as possible before investing in any crypto project. A few key research areas should include the project’s founders, the tokenomics of the project, influential partnerships, the whitepaper, as well as any other important factors surrounding the project.

Let’s take a look at the top controversy surrounding Convex Finance (CVX):

• CRV tokens can’t be redeemed – Users can stake their CRV tokens on the Convex platform. Upon staking their CRV tokens, these tokens are then converted into cvxCRV tokens. These cvxCRV tokens can’t be converted back into the original CRV tokens.

  Essentially, CRV stakers receive a permanent claim to rewards but aren’t able to convert their cvxCRV tokens back into CRV. Many people consider this to be quite innovative but others aren’t in favor of it.

  cvxCRV tokens only hold their value, and offer users beneficial utility, based on the success of Curve and Convex Finance’s platform.

How many Convex Finance (CVX) Tokens tokens are there?

At the time of writing, Convex Finance (CVX) has a circulating supply of 62,648,152.67 CVX (63% of the total supply).

The total supply of Convex Finance (CVX) is 90,829,147.

The max supply of Convex Finance (CVX) is 100,000,000.

Can Convex Finance (CVX) be mined?

Convex Finance (CVX) is not a mineable cryptocurrency.

CVX tokens can, however, be earned by participating in DeFi products such as liquidity provision, staking, and farming. Users can earn generous yields by participating in these DeFi products.

What is the market cap of Convex Finance (CVX)?

Convex Finance (CVX) Market Cap = 62,648,152.67 CVX x $8,87 = $555 million (80th largest market cap).

CVX has cemented a spot on the list of the top 100 cryptocurrencies by market capitalization, however, the CVX price is currently trading at more than 10x below its October 2021 all-time high of $80.

Biggest Competitors Of Convex Finance (SNX)

The Convex Finance protocol has quickly established itself in the DeFi space. The protocol offers users a simple way to earn rewards from their CRV tokens. Essentially, Convex Finance is actively trying to accumulate as many CRV tokens as possible.

However, Convex Finance isn’t the only protocol that is trying to acquire CRV tokens.

Convex Finance’s biggest competitor is:

• Yearn Finance

What Are The Future Plans For Convex Finance (CVX)

Convex Finance has quickly become a leading DeFi protocol that offers CRV holders boosted CRV incentives. Curve is currently a leading decentralized exchange in the world and has a total value-locked of more than $8 billion.

Convex Finance achieves these boosted CRV rewards by pooling all individuals’ CRV tokens, as well as applying veCRV tokens to the pools.

In recent months, the protocol has experienced a significant decrease in its TVL – currently, the TVL of Convex Finance is $5 billion but the TVL exceeded $20 billion in 2021.

At the moment, users can expect the project to keep progressing significantly in the upcoming months. The protocol is actively trying to acquire as many CRV tokens, and increase the number of users that are making use of the Convex Finance platform.

Additionally, the success of the protocol has led to Convex Finance becoming known as a reputable and trustworthy platform that prioritizes and rewards its users.

The future success of the platform is largely reliant on the success of the Curve platform. Going forward, Convex will look to continuously improve its working model, additional rewards, and the overall user experience.

The CVX token continues to become one of the most popular cryptocurrencies on the market. The success of the CVX token can be attributed to the generous rewards model that Convex has created, as well as the large number of CRV holders that the Convex platform is attracting.

Pros And Cons Of Convex Finance (CVX)

Pros:

• Boosted CRV rewards – The Convex Finance protocol offers CRV holders a lucrative and profitable way to earn generous DeFi rewards. CRV holders can stake CRV tokens on the platform and receive cvxCRV tokens in return. These cvxCRV tokens have an array of benefits and token holders are eligible for rewards that are generated from both the Curve and Convex platforms.
• Low supply – The total supply of Convex Finance supply is only 100,000,000 – this is significantly lower than most other cryptocurrency projects, and is even lower than the supply of Bitcoin. A low supply typically results in positive price action due to scarcity – this is only the case when it’s a solid and sought-after crypto asset.
• Specialized utility – The Convex platform specializes in providing CRV stakers with enhanced yields for their tokens. The Convex platform prioritizes acquiring CRV tokens from the Curve Finance platform.

  The CRV tokens are then pooled and CRV staked on the platform allows users to earn boosted CRV yields.

• High TVL – The protocol has amassed more than $5 billion in total-value locked (TVL). This makes Convex Finance one of the protocols with one of the highest TVL – when compared to other protocols, Convex Finance has a significantly higher TVL.

Cons:

• Competitors – Convex is providing CRV stakers with more rewards but the project is only one of the protocols competing to acquire as much CRV as possible. One of the biggest competitors to Convex is Yearn Finance (currently 123rd largest market cap).