Convex Finance

Convex Finance is a decentralized finance (DeFi) platform that provides staking rewards on the Curve Finance exchange. The protocol operates on the Ethereum blockchain and acts as a yield optimizer for CRV token holders and Curve liquidity providers.^[1]

History

Convex Finance was first introduced in April 2021 by a group of anonymous developers with the aim of boosting rewards for CRV holders and liquidity providers using a simple and easy-to-navigate interface. The project’s native token, CVX, was introduced and subsequently launched for airdrops, incentives, and rewards on the Convex Finance platform. The platform went live in May 2021 and recorded $68 million in total value locked (TVL) in that first month. It reached its peak of $21 billion in January 2022. Convex Finance later announced that it had distributed a total of $872.8 million in fees and rewards to its users in May 2022.^[2]

Launch Airdrop

Convex Finance will airdrop a portion of CVX tokens to all current veCRV holders. Additionally, all addresses that vote to whitelist Convex in a subsequent Curve.fi governance vote will receive additional CVX tokens.^[3]

veCRV Holder Airdrop

Distribution will be weighted by the amount of veCRV held at snapshot for the total of 1% of CVX supply. Snapshot was taken at block 12296676 on April 23rd 2021.
Platforms who hold veCRV on behalf of multiple users will have their distribution allocated directly to their users.
The following veCrv holders are eligible for the airdrop and can be claimed by the individual user:

veCRV
yveCRV
yveCRV/ETH SLP
yveCRV/ETH SLP in Sushiswap’s Masterchef
yveCRV/ETH SLP in Pickle
yveCRV/ETH SLP in Pickle and staked in Pickle’s Masterchef
yvBoost (yvecrv vault)
yveCRV deposited on Unit Protocol
yveCRV/ETH SLP deposited on Unit Protocol
sdveCRV
sdveCRV staked in Stake DAO’s Masterchef

Whitelist Vote Airdrop

Distribution will be evenly distributed to users whose veCRV was used to vote to whitelist Convex Finance contract for a total of 1% of CVX supply.
Platforms who hold veCRV on behalf of multiple users will have their distribution allocated directly to their users.
The following veCrv holders are eligible for the airdrop and can be claimed by the individual user:

veCRV
yveCRV
yveCRV/ETH SLP
yveCRV/ETH SLP in Sushiswap’s Masterchef
yveCRV/ETH SLP in Pickle
yveCRV/ETH SLP in Pickle and staked in Pickle’s Masterchef
yvBoost (yveCRV vault)
yveCRV deposited on Unit Protocol
yveCRV/ETH SLP deposited on Unit Protocol
sdveCRV
sdveCRV staked in Stake DAO’s Masterchef^[3]

Overview

Convex Finance was built to boost rewards for CRV stakers and liquidity providers in a simple and easy-to-use interface. Convex aims to simplify staking on Curve, as well as the CRV-locking system with the help of its native fee-earning token, CVX.^[3]

Tokenomics

CVX Token

CVX token is the native cryptocurrency fueling Convex’s ecosystem. These tokens are minted pro rata for each CRV token claimed on the Convex platform by Curve’s liquidity providers. In addition, holders are offered a share of Convex platform fees with these tokens.^[2]

Convex Finance has a maximum supply of 100 million CVX coins with a market capitalization of $409 million. CVX/CRV mint ratio reduces every 100,000 CVX.

CVX tokens can be staked on Convex Finance to earn cvxCRV. This provides a share of Curve’s LP CRV earnings in addition to a portion of the fees as well. More value will be distributed to cvxCRV holders as the Convex platform continues its growth. In the future, CVX will be used for voting.

Convex Finance has its native governance and utility token called CVX. Holders of CVX have voting rights in the protocol's governance and decision-making processes. They can participate in proposing and voting on proposals related to the protocol's development, fee structures, and parameter adjustments. CVX holders also benefit from various incentives, such as reduced fees and additional rewards.
Tokenomics

cvxCRV (Tokenized veCRV)

Tokenized deposits, minted 1:1 for each CRV locked in the platform.
Stake to receive platform fees(CRV), CVX, and veCRV rewards(3Crv).

Convex Token (CVX) Distribution

Max Supply: 100 million
50% Curve LP rewards Rewarded pro-rata for CRV received on Convex
25% Liquidity mining Distributed over 4 years. Incentives for CVX/ETH and cvxCRV/CRV pools
9.7% Treasury Vested over 1 year. Used for future incentives or other community driven activities
1% VeCrv holders Instantly claimable airdrop
1% VeCrv holders who vote to whitelist Convex Instantly claimable airdrop
3.3% Investors Vested over 1 year. 100% of investment funds used to pre-seed boost and locked forever(no cvxCRV minted).
10% Convex Team Vested over 1 year^[3]

Fees

There will be a 16% total platform fee with 10% going to cvxCRV stakers, 5% going to CVX stakers, and 1% going to harvest caller. The 1% to harvest caller is to reimburse gas for calling contract functions to gather and distribute rewards to rewards contracts.

10% to cvxCRV stakers, given as CRV
5% to CVX stakers, given as cvxCRV
1% to harvest caller, given as CRV^[3]

Partnerships

Frax Finance

Frax Finance has deployed a portion of their treasury to the FRAX pool on Convex Finance. They’ve committed to holding/staking their earned cvxCRV and CVX rewards for the long term, and work to align incentives for both protocols.^[4]

BadgerDao

The team at BadgerDao deployed new vaults purpose built for Convex Finance. BadgerDao’s Helper Vaults can be used to auto-compound your staked cvxCRV and CVX earnings. Users can also choose to use any of BadgerDao’s 8 other setts that take advantage of Convex rewards (CRV, CVX), as well as BADGER tokens.^[4]

OlympusDao

With OlympusDao’s passing of OIP-14, excess treasury funds (FRAX tokens) will be deployed into Convex Finance’s liquidity pools to start earning trading fees, CVX, and CRV. OlympusDao hopes to deploy more capital from their treasury to Convex liquidity pools in the future, and maintain a CVX position.^[4]