Convex Finance
About
Convex Finance is a yield optimization protocol that aggregates governance token voting power to maximize rewards for liquidity providers on Curve, Frax, and f(x) Protocol. It allows users to deposit LP tokens from these protocols and earn boosted yields without having to lock governance tokens themselves. The platform provides a streamlined interface for staking, voting, and claiming rewards across multiple DeFi ecosystems.
Where Does Yield Come From?
Convex Finance helps liquidity providers earn higher rewards from three protocols: Curve, Frax, and f(x) Protocol. It gathers voting power from locked governance tokens to steer extra reward tokens toward specific pools.
The system is built on a fee redistribution model. Convex takes a slice of the reward tokens earned from the underlying protocols and shares them with different participants in its ecosystem.
For Curve Finance:
- Liquidity providers deposit their Curve LP tokens (liquidity provider tokens) into Convex.
- Convex uses its large share of locked CRV tokens (veCRV) to direct CRV reward emissions to the pools it supports.
- A 17% fee on the CRV rewards is distributed as:
- 10% to people staking cvxCRV (paid in CRV)
- 4.5% to people staking CVX (paid in cvxCRV)
- 2% to the treasury (in CRV)
- 0.5% to the person who triggers the reward collection (in CRV)
For Frax Finance:
- A similar process uses locked FXS tokens (veFXS).
- A 20% fee on FXS rewards is split:
- 10% to liquidity providers in cvxFXS pools (paid in FXS)
- 5% to holders of locked CVX (vlCVX) (paid in FXS)
- 5% to the treasury
For f(x) Protocol:
- 75% of the revenue from the f(x) Protocol goes to people staking cvxFXN.
- Convex keeps 25% of the fees from locked FXN tokens (veFXN).
- Additionally, a 17% fee on the extra FXN rewards from boosted liquidity pools is shared:
- 8.5% to cvxFXN stakers
- 8.5% to the treasury
Where does the yield come from?
- Trading fees collected by the underlying liquidity pools.
- Boosted reward tokens (CRV, FXS, FXN) that Convex directs using its voting power.
- Extra rewards paid in Convex’s own token, CVX, for providing liquidity.
Governance participation:
- The protocol’s governance token, CVX, can be locked as vlCVX. This gives holders the right to vote every two weeks on where to direct new reward emissions across all the integrated platforms.
Persons
C2tP
Convex Finance (Multisig Member)
Winthorpe
Convex Finance (Multisig Member)
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
MixBytes15-03-2021 - 19-04-2021 |
| The audit identified critical authorization vulnerabilities that were all fixed before deployment, establishing a solid security foundation for Convex's automated Curve gauge rewards platform. MixBytes' comprehensive review covered access control, logic flaws, and gas optimizations across the complex multi-contract system. |
PeckShield15-09-2022 |
| The audit uncovered one medium-severity sybil attack vulnerability and two low-severity compliance/trust issues, all of which were resolved or mitigated before mainnet deployment, demonstrating adequate security diligence for the wrapper contract. |
ChainSecurity09-01-2023 - 04-04-2023 |
| ChainSecurity identified critical reentrancy and oracle manipulation vulnerabilities that were fully resolved, along with several medium and low severity issues, resulting in a codebase assessed as providing a high level of security after corrections. |
Nomoi05-01-2023 - 20-01-2023 |
| The audit identified one high and one medium severity vulnerability in the cvxCRV staking wrapper, with several enhancements addressing edge cases and best practices; most issues were resolved by subsequent commits, indicating responsive remediation before deployment. |
PeckShield19-04-2022 |
| The audit found no critical or high-severity issues, only three low-severity vulnerabilities and one informational recommendation, all of which were promptly confirmed and fixed by the development team. The codebase was assessed as well-structured and neatly organized. |
PeckShield09-11-2022 |
| The audit found no critical or high-severity vulnerabilities, only two low-severity issues and one informational suggestion, all of which were addressed by the Convex team before mainnet deployment. |
Nomoi01-01-2023 |
| The audit revealed significant risks in the Convex sidechain platform, particularly around reward pool reentrancy and owner privilege escalation, though most severe scenarios were deemed unlikely; the protocol should implement the recommended safeguards against token malfunction and operator misuse before production deployment. |
Backers
Convex Finance allocated 3.3% of its total CVX token supply (100 million max supply) to investors, vested over 1 year. According to the official documentation, 100% of investment funds were used to pre-seed boost and are locked forever (no cvxCRV minted). No specific investor names, funding rounds, or investment amounts are disclosed in the official tokenomics documentation or GitHub repository.
Legal
Status and notes
Convex Finance operates through a 3-of-5 multisig Gnosis Safe with members from Convex Finance, Llama Airforce, Votium, and Frax Finance. Contact email: [email protected]. No operating entity name, legal form, or registration jurisdiction disclosed on official sources.