Convex Finance price prediction: What next for the platform?

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Convex Finance has become one of the frontrunners in the DeFi 'curve wars'

Convex mesh that represents internet connectivity.                                 
CVX surged during the tail end of 2021, after being listed on the Binance major exchange – Credit: Shutterstock
                                

Contents

Decentralised Finance, or DeFi, has ballooned to immense proportions over the past year. During 2021 the DeFi industry grew to more than $100bn as cryptocurrency prices surged. With crypto enthusiasts forecasting continued exponential growth for the sector, plenty of DeFi start-ups are emerging in a battle to exploit all possible opportunities in this still-nascent industry.

Convex Finance (CVX), which launched in 2021, is one such platform. It’s an incentive-based DeFi project built on top of Curve, a community governed decentralised exchange focusing on stablecoins. In simple terms, the business model of Convex Finance is to attract Curve liquidity providers and Curve DAO Token (CRV) holders to deposit their tokens with Convex Finance, in return for Convex Finance (CVX) tokens and large rewards.

With a current locked value of more than $16.6bn according to its website, Convex Finance has managed to become a major player on the DeFi scene, despite significant competition from the likes of Yearn Finance and Stake DAO. But how exactly does the project work? And what are the latest Convex Finance price predictions?

Before looking at forecasts let’s perform a quick review of the company.

What is Convex Finance (CVX)?

In order to understand fully how Convex Finance works, it’s important to understand how the Curve platform functions. In short, Curve facilitates trading through the creation of pools of cryptocurrencies provided by users. Users can then earn fees on the crypto assets they’ve deposited. These users receive veCRV tokens in return for locking up CRV. The more CRV users lock up and the longer they lock it up for, the bigger the yields and the more power they have in terms of how the system is managed.

Convex Finance incentivises users to deposit CRV with its platform instead. This is achieved by offering higher yields than they can get by going directly to Curve.

In return for depositing CRV with Convex Finance, users receive the platform’s native token, called CVX.

By acting as an intermediary to pool and deposit CRV on behalf of CRV holders, Convex Finance can increase both its yields and dominance. This is because the more CRV one deposits with Curve, the higher the rewards gained.

The more CRV is deposited and the longer it’s deposited for, the higher the Curve yields and the greater the power that the holder – in this case the Convex Finance protocol – can wield. In order to attract liquidity providers, Convex Finance offers competitive stake returns without requiring stakers to lock up their CRV tokens for a long time (ordinarily, holders must commit to staking CRV directly with Curve Finance for close to four years to gain veCRV).

Convex Finance, whose founders are unknown, has enjoyed huge success with its approach so far, and has managed to gain dominance in the “curve wars”, currently controlling more than 45% of the total supply of veCRV.

According to the crypto’s official website, CRV stakers receive trading fees and a share of “boosted” CRV. The company also says there are no withdrawal fees and “minimal” performance fees.

The CVX coin, according to its website, can be staked to earn a portion of CRV earnings. CVX is also a governance token, allowing holders to vote on issues related to the Convex Finance protocol.

How does this information impact a Convex Finance price prediction for 2022? Or even a Convex Finance price prediction for 2030?

Coin performance

The CVX coin rose rapidly after its launch, surging from $4.2587 on 19 May 2021 to $18.57 on 4 June. It subsequently dropped to $1.8823 on 20 July before increasing again to $13.94 on 16 September. Despite falling back slightly to a low of $8.821 on 3 October 2021, the coin spiked at $32.56 on 29 October. The coin hit $40.37 on 10 November before dropping to $20.88 on 22 November. The coin surged during December, after new asset launches and getting itself listed on Binance, hitting record highs of $58.99 on 1 January 2022. It subsequently dropped to a low of $23.16 on 28 January 2022.

The CVX coin stood at $29.33 as of 9 February 2022. There is a current circulating supply of 42.98 million coins and a maximum supply of 100 million CVX coins. The platform has a current market cap of $1.45bn.

But how does this information impact our Convex Finance price prediction?

Let’s take a look…

CVX price prediction

Predictions should be viewed as possibilities rather than absolutes. With this in mind, let’s look at some CVX coin price predictions.

WalletInvestor offers an optimistic CVX price prediction, and believes the crypto should rise to $84.868 in a year’s time and $312.236 in five years.

Gov.capital has a Convex Finance price prediction for 2023 of around $90.306 while its forecast for 2027 stands at $307.294.

DigitalCoinPrice, in an equally bullish prediction, thinks that CVX could be worth $40.05 in 2022 before increasing to $47.84 in 2023. The website’s Convex Finance price prediction for 2025 stands at $61.94.

FAQs

How many Convex Finance coins are there?

There is a current circulating supply of 42.98 million coins and a maximum supply of 100 million CVX coins.

Is Convex Finance a good investment?

Potentially. The coin has performed well and the platform itself has become a major player on the DeFi scene. 

It is always worth remembering, however, that the crypto market is highly volatile and the price of all tokens and coins can go down as well as up. Furthermore, any regulatory crackdowns on DeFi or stablecoins could dramatically impact the platform's proposition.  

Will Convex Finance go up?

Some analysts are predicting Convex Finance could surge to almost outlandish prices of over $300 in five years time. 

However, it is worth remembering that forecasts, especially long-term ones, are better viewed as indicators rather than absolutes.

Should I invest in Convex Finance?

Investing is a highly personal endeavour. Do your own research and try to keep up to date with any developments within the Convex Finance ecosystem that could boost its prospects.

Remember, investing can be risky, and it is important never to invest more money than you can afford to lose.

Further Reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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