Convex Finance (CVX) is one of the leading DeFi protocols in the crypto market as of January 2022, ranking second in terms of TVL behind Curve. Convex Finance is a platform which lets users deposit liquidity to earn rewards and generate rewards from putting their crypto holdings to use. The yield-boosting dApp saw its TVL cross the $20 billion mark at the start of 2022 and has seen stellar growth ever since it launched in May 2021.

Its TVL surged from $68 million upon launch to surpass $1 billion within a month and crossing $10 billion in five months. The continued DeFi boom and demand for its services among users helped its TVL exceed $20 billion by the end of 2021.

What makes Convex Finance so attractive as a DeFi platform is that it lets users access liquidity and earn rewards for staking Ethereum-based stablecoin Curve (CRV) without the need to lock CRV tokens in its platform. Curve, which is the largest DeFi protocol in the market, enjoying a TVL of over $24 billion to date, has seen the demand for its native token surge significantly in recent months.

While Curve's platform locks up liquidity by making users lock their CRV holdings for a long period of time to earn rewards, Convex Finance works around this drawback by pooling all user assets together to purchase CRV tokens and convert them into veCRV to maximize rewards for its liquidity providers, eliminating the need for long lock-in periods.

Convex Breakdown

CVX, the native token in use within Convex Finance in which users earn fees for their staking activities. It currently ranks 205 in terms of market capitalization as of early January 2022, enjoying a market cap of around $2.1 billion.

The CVX token saw its value surge to a new ATH by late December 2021, powered by rising adoption of the Convex Finance protocol among users even as the platform announced the addition of new assets. The CVX token is also gaining popularity among crypto traders after being listed in several leading exchanges lately, including Binance, Huobi and OKEx.

Meanwhile, the CVX price has also been rising steadily as the total value locked within Convex Finance continues to grow. An uptick in users looking to stake their crypto holdings on the platform to earn rewards has helped drive up the CVX rate. As long as the DeFi market continues to grow and experience rising adoption among investors, we can see the CVX token remain an attractive investment in the crypto market.

Convex Finance History

The yield optimization and automation protocol Convex Finance was introduced to the market in mid April 2021 when its pre launch announcement went live. The protocol was launched in May 2021, with an airdrop of CVX tokens to holders of veCRV during the snapshot block. veCRV holders who voted for whitelisting Convex Finance on Curve also received airdrops of CVX tokens upon the launch of this DeFi protocol.

With a vision to allow users to receive boosted CRV rewards and liquidity mining rewards with minimal effort, Convex Finance soon went on to become the second largest DeFi protocol in the market a few months after its launch. Its native token CVX is used for staking, paying performance fees and also functions as the governance token within the platform, allowing its holders to participate in votes regarding its development and updates.

Unlike Curve LPs, Convex Finance lets users maximize their rewards and make the most of CRV token holdings without the need to lock in the tokens. Convex Finance also has other distinct advantages, including offering zero deposit and withdrawal fees to its users as well as a low performance fee which gets distributed among CRV stakers and holders of its native token, CVX.

Convex Price Factors

Launching new assets on the Convex Finance protocol boosts the user activity on its platform and sends the value of CVX higher. Adding support for new assets drives up the TVL within Convex Finance, making its native token CVX more valuable in the market. As long as the DeFi market continues to grow and more users participate in staking on the protocol, the CVX price will continue to climb higher.

In the future as well, the CVX rate can surge as the protocol announces support for new projects, including Frax and even TerraUSD (UST) going forward. Some crypto experts believe that Convex Finance could see its TVL cross that of Curve as well - the market leader in the DeFi sector.

The CVX price can also receive a boost as it gets listed on multiple exchanges, which powers investor interest in CVX as an instrument to trade. For instance, Convex Finance rate touched an all-time high on December 27, 2021 - a few days after its token was listed on leading crypto exchanges Binance and Huobi.

Trading Convex

Unlike traditional cryptocurrencies, trading the CVX token requires greater knowledge of not only the crypto market but also that of DeFi. Decentralized finance offers several interesting opportunities and shot into the limelight during 2021, helping power the launch and rise of Convex Finance in a few months. However, the future moves in the Convex Finance token and its price will depend on the continued interest and adoption of DeFi among investors.

Take your time to understand how the DeFi sector operates and what factors can influence ups and downs in DeFi tokens such as the CVX before you begin trading it. As a next step, look for and select an appropriate cryptocurrency exchange or broker that lists CVX among its offerings. Open an account with the platform of your choice and convert your trading capital from fiat to start buying, selling and trading CVX against other cryptocurrencies, stablecoins and fiat currencies.