What is Convex CRV (CVXCRV)?

Deep Dive

1. Purpose & value proposition

CVXCRV solves two key DeFi challenges:
- Liquidity vs governance dilemma: Curve requires locking CRV for 4 years to get veCRV (voting rights and fee shares). CVXCRV tokenizes veCRV, letting users trade or exit positions while retaining governance benefits.
- Reward optimization: Convex auto-compounds CRV rewards and distributes 50% of Curve’s admin fees to CVXCRV holders (CoinMarketCap). Users also earn CVX tokens, Convex’s native governance asset.

2. Tokenomics & governance

• Supply: Fixed at 31.7M tokens (fully circulating) with no inflation.
• Revenue streams:
  
  • 50% of Curve’s 0.04% trading fees
  • 16% of Convex’s CRV staking rewards
• Voting: Convex uses pooled CVXCRV to vote on Curve gauge weights (which pools get CRV emissions), amplifying small holders’ influence.

3. Pros & cons

Strengths:
- Passive income from two protocols
- No impermanent loss vs providing liquidity
- Reduces gas costs via batch voting

Risks:
- Depends on Curve’s dominance in stablecoin swaps
- Smart contract vulnerabilities (Convex holds $4B+ in assets)
- Regulatory uncertainty around veToken models

Conclusion

CVXCRV offers DeFi users a capital-efficient way to earn from Curve’s ecosystem, but its value hinges on sustained demand for stablecoin liquidity and Convex’s execution. How might Layer 2 scaling solutions reshape Convex’s fee-sharing model as gas costs evolve?