Convex why can be surpassed MakerDao： becoming a second largest DEFI project

Convex why can be surpassed MakerDao: becoming a second largest DEFI project

According to Footprint Analytics, Curve and Convex’s TVL are double-double-double-double-double-double-double-double-double-than-DEFI first AAVE, November and December, respectively. Following the CONVEX drums in the end of December, Makerdao, becoming secondary items second only to Curve.

Footprint Analytics – TVL of Top 5 Projects

The growth of Convex TVL and Curve maintains a high degree of association, which originates from the original intention of the CONVEX to help provide liquidity LPs on Curve to easily earn transaction fees and enhance benefits. Convex wants LP to improve the benefits without sacrificing liquidity.

As the leader of the machine gun pool, Yearn does not help but compare with CONVEX, the two are not only the competitive relationship on the surface, and there is also a depth correlation. This article will be from the data perspective, comparison CONVEX and CURVE, Yearn to analyze how CONVEX climbed to DEFI second.

Eligible for Curve, standing on the shoulders of the giant

What must be understood before entering CONVEX. Curve is the current platform in the DEX class ranked first, mainly cultivating the exchange between stable coins. Curve has gained many users with its low slip points, low-hand fees, and low immersible losses, whether it is TRADER or LP to get optimal costs on Curve.

CURVE is incentive with a user who provides liquidity by issuing token CRV. The user can obtain an incomplete VECRV by irreversible germlence CRV, but the number of obtained needs to be hooks with the pledge, and the lock bin 4 years can obtain VECRV according to the ratio of 1: 1.

The reason why users sacrificing fluidity VECRV is mainly due to locking CRVs, and it is possible to obtain the division of community governance costs. The most important thing is that the revenue of LP is up to 2.5 times. But at least 1 year of locking is a step, and ConveX can solve this pain point.

Users sell CURVE’s LP token in Convex, will get the foundation APR from Curve, accelerated CRV rewards, and CONVEX platform token CVX rewards.

CRV holders can also pledge CRV on ConveX and will receive CVX as rewards. The pledge here is also irreversible, pledged CVXCRV like Vecrv’s mapping on Convex, but it can flow in the market. The price of CRV and CVXCRV is almost consistent, and can be redeemed in a ratio of nearly 1: 1 on UNISWAP and SUSHISWAP.

Footprint Analytics – Token Price CRV VSS CVXCRV

While user revenue is improved, there is also a liquidity. For Convex collected a large number of CRVs, there will be a voting right to excite allocation to each pool on CURVE.

It can be seen from the data of Footprint Analytics that the market value of CVXCRV is faster than the CRV, which is rapidly up to 43% in the proportion of CRV. This means that nearly half of users will hold the CRV pledged to the Convex platform, and ConveX will have a significant impact on Curve’s incentive allocation.

Footprint Analytics – Market Cap of CRV & CVXCRV

In addition to solving the problem of pledge CRV fluidity, Convex also simplifies the complicated operation process of the Curve and enables a convenient experience with one-click operation. About the CURVE mechanism more in-depth analysis can be found in the Footprint Analytics combined with the blockchain NYC community.

The first dispute with Yearn’s machine gun pool

With the development of DEFI ecology, each project and emerging livelings continue to launch their own stable coins, other mainstream token, such as Eth, BTC, etc., also gradually add CURVE’s pool.

Including the factory pool, there are more than 100 pools in Curve, how to stand out in many pools, and the project compete for Vecrv voting is extremely important. This also thus triggered the battle of machine gun pools based on Yearn.

For large or project parties, there is enough VECRV to vote in the community, making CRV allocation rights between the pool. Therefore, Yearn also sets the YECRV pool to absorb CRV, similar to CONVEX, and the pledged users will get high APY and Vecrv that can be circulated on the market.

But as Yearn, Yearn, the CONVEX is more than 2 months after CONVEX. Although both are substantially the same in the mechanism, it is slightly different in the use case of Token.

Footprint Analytics – Yearn vs Convex In TVL

YFI and CVX are Yearn and ConveX platform governing token, while locking CVX can also vote for ConveX’s governance decisions on CURVE, which is equivalent to the incentive distribution of Curve pool through CVX, will originally use CRV to Curve Decision transfer to CVX. CVX’s currency price is also climbed, as of January 20, $ 39.

Footprint Analytics – CVX PRICE

Although YFI caused only 30,000 supply to lead the currency than CRV, CVX on December was also exceeded in December.　

Footprint Analytics – Yield token Market Cap

With this kind of hit, with the growth of CONVEX, its influence on Curve is more bigger. As the project party also saw the influence of Convex, which was transferred to Convex from the competition on CURVE.

Although Yearn has fallen from the convex dispute, it is not only a competitive relationship with them. It can see that Yearn’s large pool strategy is related to Convex from the underlying strategy. In order to enhance the benefits of its own factory pool, Yearn also entrust its VECRV to Convex. I have to say that Yearn has also contributed an arm in the rapid development of Convex.

Conclusion

CONVEX With:

• Resolve the income and liquidity problem of Curve pledge CRV

• Simplify the complex operation flow of CURVE

• Through CVX affects the incentive allocation of the Curve pool, focus on the market in Curve’s battlefield to Convex, and even "competitors" Yearn also incorporated CONVEX into the strategy.

Become the second largest project of DEFI, and the risk of being bundled with CURVE with Curve’s depth bindings. A protocol that is completely attached to other projects is equivalent to handling "life and death" full of people.

At this time, Yearn grows weak, but is still torching the height attributes in the DEFI world. In addition to providing more currency pools, it is also equipped with Cream in terms of lending items and cooperates with Cover in the insurance field.

For this main focus of this competition, CONVEX is an attachment of CURVE. However, with the more Vecrv held by Convex, the amount of voting rights, but revealed the traveler-based situation.