CVX is the governance and revenue-sharing token of the Convex protocol.
CVX is a low-cap asset that represents the blockchain`s native currency or monetary fee used to execute transactions on the network. This asset is exposed to the underlying risks of Convex, a protocol rated as Watch out.
CVX has a fixed supply. CVX is used as the governance token of the Convex protocol, and is highly sought-after since CVX holders can vote on which Curve pools receive incentives.
CVX is highly correlated to the overall market.
The CVX token is used to govern the Convex protocol as well as provides holders the ability to submit potential changes to the allocation of pool rewards on the Curve platform. The amount of voting power a user has is determined by how many CVX tokens are locked (16 week periods). CVX lockers (vlCVX) currently receive the same governance voting power as 5.49 CRV tokens.
The total supply of CVX is capped at 100M tokens. CVX is minted pro-rata for each CRV token claimed by Curve liquidity providers (LPs) on Convex, with the ratio of CVX to CRV emitted reduced for every 100K CVX minted. The token distribution includes 50% reserved for Curve LP rewards, 25% for liquidity mining (distributed over 4 years), 9.7% to the treasury (vested over 1 year), 2% to veCRV holders (instantly claimable airdrop), 3.3% for investors (vested over 1 year), and 10% to team (vested over 1 year).
CVX has value accrual mechanisms through its platform fees and bribe mechanism. Convex operates on top of the Curve platform as it is strategically designed to be a liquidity blackhole to rapidly accumulate CRV tokens (now the single largest CRV holder) and always locks CRV for the max duration of 4 years. This means holders of locked Convex (vlCVX) have the power to promote certain pools on the Curve platform through its majority ownership of CRV tokens. vlCVX voters determine the different allocations of CRV tokens to each pool, which boosts rewards for Curve liquidity providers (LPs). CVX is also entitled to fees generated by Curve LPs deposited through Convex. In addition, several protocols are now bribing vlCVX holders as a cheaper alternative to buy governance votes for Curve. Convex works closely with the Votium bribe marketplace to incentivize users to vote for certain Curve pools based on the amount of bribes (paid in protocol tokens) allocated to each pool.