Convex Finance

Convex Finance is a decentralized finance application built on Ethereum that sits on top of the Curve protocol, a large liquidity and stablecoin exchange. It is designed for two groups: people who provide liquidity on Curve and want to earn more CRV rewards without locking up their own CRV tokens, and people who hold CRV and want to earn a share of boosted yields. The problem it addresses is that maximizing Curve rewards normally requires locking large amounts of CRV for long periods, which Convex allows users to avoid.

Curve liquidity providers deposit their Curve LP tokens into Convex, which pools everyone's CRV together to maintain a large, permanent lock on Curve, capturing the maximum possible boost for depositors collectively. CVX is the native governance token of Convex; holding and locking it gives users a share of the protocol's revenue and a say in how the protocol votes with its accumulated Curve governance power, a practice sometimes called metagovernance. The protocol lives entirely on Ethereum and has no independent consensus mechanism of its own.

Convex generates fees by taking a percentage of the CRV rewards earned by liquidity providers who deposit through the platform. Over the trailing 30 days the protocol collected 1,252,104 dollars in total fees, of which it retained 861,944 dollars as protocol revenue, implying a take rate of approximately 68.84 percent over that same period. Of the 30-day revenue, 855,238 dollars was directed to token holders and 390,160 dollars went to the supply side, meaning the liquidity providers themselves. Annualizing the 30-day fee run-rate produces a figure of 15,233,932 dollars, while annualized revenue comes to 10,486,985 dollars.