The Curve wars are heating up as inflows into vote-escrowed CRV (veCRV) tokens came in at 19.67 million CRV tokens — six times the weekly inflation rate.
Data shared by decentralized exchange Curve Finance shows that these inflows represented not only direct token locks, but also locks via platforms like Convex Finance, StakeDAO and Yearn.
For context, while CRV is the native token of Curve Finance, and plays a role in incentivizing liquidity providers and in protocol governance, users can acquire veCRV to lock up their CRV for anywhere between one week and four years.
Each CRV token locked up for a period of four years represents one veCRV token, and the longer users lock their CRV for, the more voting power they have as well as a greater the ability to boost their CRV rewards.
Curve Finance lets veCRV holders vote on CRV emissions, and the protocols within the ecosystem compete to acquire the most veCRV tokens, so they can offer higher rewards in their liquidity pool. So far, the most successful at this game, which has come to be known as the “Curve Wars,” are Convex Finance, StakeDAO and Yearn.
Convex Finance holds the largest share of veCRV, with just over 41% of tokens, followed by Yearn Finance and StakeDAO, according to data from a Dune dashboard created by “@stablecamel.”
With the massive rise in inflows to veCRV, it is not surprising that Convex Finance was one of the biggest beneficiaries, with its native token CVX surging 100% over the last 24 hours to a price of $4.55 at the time of writing.
Data from Coinglass shows that trading volume for the CVX/USDT perpetual trading pair on crypto exchange Bybit surged 9,100% over the same period to $134.5 million.
Market participants also believe that the recent forced liquidation of Curve founder Michael Egorov’s positions will be a net positive for the Curve ecosystem and its major players such as Convex.
“With the massive overhang of CRV collateral from Mitch liquidated into the market it’s just fundamentals from here on out for CVX,” wrote Jason Hitchcock, head of ecosystem at Web3 development firm thirdweb, on X.
“Convex has captured Curve, Frax, fF(x)n, Prisma, and others will come. They get a big piece of all their fees and established significant incentive markets for them.”
June 17, 03:49 a.m. ET: Headline updated for clarity