vlCVX and its limitations
CVX is the governance token of Convex, a platform built to boost rewards for CRV stakers and liquidity providers. Convex boosts rewards thanks to the large amounts of veCRV that are under its control and the distribution of its CVX token as additional rewards.
CVX can be locked for 16 to 17 weeks for vote locked CVX (vlCVX) which cannot be traded or transferred. Therefore, when the market moves, vlCVX holders are unable to exit their positions and realise profits or minimise losses. CVX that is not locked can be traded, but does not benefit from the significant yield that vlCVX does.
vlCVX holders can claim a portion of Convex platform fees and can vote for Curve governance proposals, including bi-weekly Curve gauge weight votes. There is a bribe marketplace called Votium where vlCVX holders can receive token incentives for voting for bribed gauges.
Historically, the main driver of yield to vlCVX holders has come from gauge weight vote incentives. However, the yield is paid to vlCVX holders in a number of different tokens and does not automatically compound. This means that users need to sell each of the individual tokens received, buy CVX, and lock it for vlCVX in order to compound their yield. This is so costly (in terms of gas and transactions fees) and time consuming that it is unfeasible for small users to get the most out of vlCVX.
pxCVX Easy Mode to the rescue
Enter Pirex and pxCVX. Pirex is a platform by Redacted Cartel which creates futures marketplaces for yield generating tokens. The first exemplification of Pirex comes in the form of pxCVX. 1 CVX can be deposited into Pirex in exchange for 1 pxCVX which is a 1:1 liquid representation of vlCVX. Unlike vlCVX, pxCVX can be traded and sold at any time. Shortly after launch Redacted will seed a pxCVX/CVX pool on Curve.
Every two weeks (one pxCVX epoch), those holding pxCVX can claim incentives that Pirex claims, e.g., from Votium or other sources. pxCVX holders do not have to claim bribe revenue every epoch and can choose to let the revenue accumulate before claiming. Further, with the introduction of Expert Mode users will be able to trade their future yield through revenue futures notes (RFN), unlocking complete control over their returns.
In partnership with Llama Airforce, Pirex has created a pxCVX vault. Users can deposit their pxCVX in this vault and receive a uCVX vault share token in exchange. The vault automatically claims pxCVX rewards every epoch and converts these rewards for more pxCVX. When a user wishes to cash out, they can exchange their vault token for their original pxCVX and their pxCVX yield.
As rewards are distributed by the vault, the number of vault share tokens a user has does not increase, rather the number of pxCVX they can exchange their uCVX for increases (similar to BTRFLY and wxBTRFLY). Therefore, accessing pxCVX through uCVX allows for the auto-compounding of vlCVX yield into more pxCVX.
CVX can be converted directly to uCVX through pxCVX Easy Mode, which is the first Pirex offering that is now live on pirex.io. (Full functionality of Pirex is available through the smart contracts, but the UI functionality will be released sequentially).
By converting CVX to uCVX, users can hold a version of CVX which automatically compounds and can be sold at any time. Thanks to efforts such as OTC deals, auto-compounded rewards, unionized gas fees, and more, uCVX is able to offer users greater value than vanilla vlCVX.
How to get uCVX with pxCVX Easy Mode?
- Head over to pirex.io
- Connect your wallet
- Convert your CVX for uCVX (2 transactions: approve and deposit)
- Kick back and relax as your pxCVX automatically compounds
For more detailed info about Pirex, pxCVX, fees and contracts, see the Pirex Documentation here.