Convex Dominated Curve’s TVLJan 3, 2022
Recently, the “Curve Wars” have been a hot topic. Simply put, Curve’s stablecoin AMM rewards its liquidity providers with CRV, which can be 1) sold to realize yield or 2) staked into veCRV (voting escrowed CRV), where a weekly vote decides how rewards are allocated across Curve’s pools. Major stablecoin projects have realized this weekly vote allocation is critical to keeping their Curve liquidity high. (Losing that vote means LPs’ yields drop, and capital may move elsewhere.) Now, a so-called “war” has ensued, with various protocols openly bribing votes and rewarding veCRV holders with their native tokens.
In April 2021, Convex pioneered this bribing game with a 1% airdrop in exchange for support from veCRV holders. Now, it has grown to have great sway on Curve’s valuable governance vote: 85% of Curve TVL is now routed and staked via Convex. And nearly half of all veCRV supply is owned by Convex (more on that below).
To dive deeper, check out our latest Convex report.