Convex Finance Token Soars 50% Upon Weekly Inflows Of veCRV Explode

Currently, CVX is trading at $3.93, up 47.74% over the previous day. The last time this price level was observed was during a brief upswing in the overall cryptocurrency market towards the end of March.

Source: CoinMarketCap 

Additionally, CVX's market capitalization increased to $368 million, positioning it as the 155th largest cryptocurrency. The asset's daily trading volume reached $210 million after rising by 2,800%.

According to data, the total value locked (TVL) in the decentralized finance (defi) protocol of Convex Finance increased by 1% in the last day and is presently at $1.31 billion.

In order to earn a portion of the trading fees in vote-escrowed CRV (veCRV) tokens, Convex Finance enables liquidity providers on Curve Finance to stake their tokens on the platform without placing their liquidity on Curve Finance.

Users can purchase veCRV to lock up their CRV for a period of time ranging from one week to four years. CRV is the native token of Curve Finance and it serves as a mechanism for rewarding liquidity providers and supporting protocol governance.

Every CRV token that is locked up for four years corresponds to one veCRV token, and users who lock their CRV for longer periods of time have more voting power and can increase their CRV rewards.

Curve Finance allows holders of veCRV to vote on CRV emissions, and the ecosystem's protocols fight to obtain the greatest number of veCRV tokens in order to increase the rewards they can provide in their liquidity pool.

Data from a Dune dashboard made by "@stablecamel" shows that Convex Finance has the largest share of veCRV, with just over 41% of tokens, followed by Yearn Finance and StakeDAO.

Convex Finance, whose native token CVX has surged 50% over the last 24 hours to a price of $3.93 at the time of writing, is one of the biggest beneficiaries of the massive rise in veCRV inflows.

The trading volume for the CVX/USDT perpetual trading pair on the cryptocurrency exchange Bybit increased by 9,100% to $134.5 million during the same period, according to data from Coinglass.

Additionally, market participants think that Michael Egorov, the founder of Curve, will benefit the Curve ecosystem overall from the recently forced liquidation of his positions.

Meanwhile, Santiment provided data indicating a 151% increase in total open interest in CVX over the previous day. This demonstrates that traders are attempting to profit in the short term from the asset's abrupt movements, which leads to high price volatility.

The overall funding rate aggregated by CVX fell from 0.01% to negative 0.17% over the last day, according to data from the market intelligence platform. As can be seen from the chart, traders are currently placing bets on a decline in CVX's price.