On Curve Finance, curve tokens (CRV) are given out as yield farming rewards to liquidity providers and can be exchanged for vote-escrowed CRV (veCRV).
Convex Finance is introducing adjustments to its Curve protocol staking mechanism that will increase user earnings and give them greater control over the rewards they receive.
In order to increase the incentives for staking, Convex Finance is also recommending adjustments to the platform fees and rerouting some of the existing payouts.
The cvxCRV, which stands for the Convex and Curve token derivative staking system on Curve, will have these upgrades applied. With the upgrades, users will be able to change their payouts to include a mixture of curve (CRV) and convex (CVX) tokens and add more incentives to their cvxCRV staking.
With a total value locked (TVL) of $23 billion, Curve Finance, an Ethereum-based stablecoin exchange, was previously the largest DeFi protocol. Convex enables users to access liquidity and earn fees from Curve Finance. In keeping with a general market decline, Curve's TVL had decreased to $3.2 billion as of Wednesday. During its lifetime high in 2021, Convex locks over $3 billion and stored over $21 billion.
On Curve Finance, curve tokens (CRV) are given out as yield farming rewards to liquidity providers and can be exchanged for vote-escrowed CRV (veCRV). Users who possess veCRV can take part in platform governance, earn greater prizes and fees, and qualify for airdrops.
Users are encouraged to lock their CRV for a long time in order to get more veCRV and platform benefits because the tokens are time-locked. This strategy, however, effectively locks up liquidity, costing users opportunity.
Convex pools all user assets to address this issue, enabling it to buy curve tokens, exchange them for veCRV, and optimize benefits for its liquidity providers. Users of Convex can now get Curve rewards without having to keep their Curve tokens locked up for extended periods of time.
