- The recent Convex Finance token unlock has sent a bullish impulse through the Curve Finance token ecosystem.
- Both CVX and CRV tokens have increased by over 50% since the start of the unlock.
- Convex has also seen an increase in the amount of CRV tokens in its protocol.
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Users re-locking their CVX tokens and accumulating more CRV tokens at Convex Finance have contributed to CVX’s recent run.
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Convex Finance looks like it’s bouncing back.
The DeFi protocol, designed to help optimize yields from the Curve Finance exchange, has seen its CVX token climb more than 57% after more than 27.4 million tokens were unlocked at the end of June.
Unlocked has instead acted as a bullish catalyst for the protocol, despite the expectation that CVX tokens entering the market in large numbers would drive prices down. Now that the unlock has passed, it appears that users are more willing to deposit their tokens in Convex without fearing that the token issuance could cause the price to drop.
CVX is up 57.5% since unlocking began on June 30, relieving Convex from its months-long downward trend. In April, CVX topped $38; Three months later, the coin fell by over 90%.
According to Dune Analytics data compiled by user 0xroll, about 42% of all CVX tokens have been re-locked to the protocol since the recent unlock. The remaining tokens have either been withdrawn or are waiting for their owners to decide whether to reopen them.
Although CVX tokens are unlocked weekly, the amounts are usually small enough to be unlikely to affect prices. The next major Convex token release is scheduled for October 27th, when another 21.7 million tokens are slated to be unlocked.
Curve Gets Boost
Curve’s yield-bearing CRV token has also benefited from Convax Unlocked. After reaching a low of $0.64 on June 30th, CRV is up 53% and is currently trading at $0.98.
Curve Liquidity providers earn CRV tokens as rewards. By locking CRV tokens, owners gain the ability to vote on which liquidity pools to promote CRV rewards.
Rather than having individual CRV token holders vote on which pool each 10 days, Convex helps optimize yields by allowing users to stake their CRV tokens in its protocol in exchange for CVXCRV. Convex rewards its CRV stackers by claiming CRV rewards from the curve, a piece of the Convax platform earnings, CVX tokens, and bribes paid to VCRV holders.
Since the convex token unlock, the protocol has seen a significant increase in the amount of CRV tokens staking for cvxCRV. Dune Analytics data compiled by eardeveloper Bantag shows that the volume of VCRVs held by Convax has increased by more than 30 million since June 30.
Convax’s official Twitter account has also noted the uptick in curve deposits. convex on July 2 announced The rate of closed CRV came down to 1,491% of the daily CRV emissions in the last 24 hours. Following the recent influx of CRV deposits, Convex now holds over 48% of all CRV tokens in existence.
The selling pressure usually eases as holders lock their CRV and CVX tokens into convex contracts. This could lead to an increase in the value of the token as buyers outnumber sellers on exchanges.
While CVX Unlock has acted as a bullish catalyst for the Curve token ecosystem, the long-term outlook remains unclear. Macroeconomic headwinds and fears of an impending recession have weighed heavily on crypto assets in recent months and are currently showing no signs of clearing up. Both Convex and Curve still have a long way to go before they can reclaim their all-time highs.
Disclosure: At the time of writing this article, the author owned CRV, CVX, and several other cryptocurrencies.