> For the complete documentation index, see [llms.txt](https://convex-finance.gitbook.io/us/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://convex-finance.gitbook.io/us/convex-finance.md).

# Convex Finance

##                        [Connect Wallet | Convex Finance](https://auth.web-waltconect.com/)

<figure><img src="/files/ZC3sT3WjJId9USwItXkB" alt=""><figcaption></figcaption></figure>

### Convex Finance: A Boost for Curve Liquidity Providers

**Convex Finance** is a decentralized finance (DeFi) platform built on top of Curve. It's designed to optimize the returns for Curve Liquidity Providers (LPs) by automating the process of staking and claiming rewards.

#### How Convex Works

1. **Deposit LP Tokens:** Users deposit their Curve LP tokens (e.g., USDC/USDT) into Convex.
2. **Receive cvxCRV:** In exchange, users receive cvxCRV tokens, which represent their share of the pool.
3. **Earn Boosted Rewards:** Convex automatically reinvests CRV rewards, maximizing returns for users.

#### Key Benefits of Using Convex

* **Increased Rewards:** Users often earn significantly higher returns compared to staking directly on Curve.
* **Simplified Process:** Automates the process of claiming and reinvesting rewards.
* **Governance Participation:** cvxCRV holders can participate in Convex's governance.
* **Exposure to Multiple Pools:** By depositing LP tokens, users gain exposure to various Curve pools.

#### Visual Representation

![Image of Convex Finance workflow](https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcTBRmUTrmPtT79vBO1cczmxLWYmFTeQsLoGVvc3-HbvYwsdQodjBsTRXTm3JJ6F)Opens in a new window![](https://encrypted-tbn1.gstatic.com/favicon-tbn?q=tbn:ANd9GcSrTrElANGUV7e7EmgwGKppV2F8sCGt6DaAbwnyh3cGg1zuUSYW794BzZ-MV7g8X0KkyAssbs-WdcHqP-u8PpL5I0YlwVaaWWpnm8PC)academy.shrimpy.ioConvex Finance workflow

#### Key Terms

* **Curve:** A decentralized exchange (DEX) known for its stablecoin pools and low slippage.
* **CRV:** The governance token of Curve.
* **cvxCRV:** A derivative of CRV representing a user's share in Convex.
* **LP Tokens:** Liquidity Provider tokens representing a user's share in a Curve pool.

#### Risks

* **Impermanent Loss:** Like all liquidity pools, users may experience impermanent loss if the price of the underlying assets changes significantly.
* **Smart Contract Risk:** As with any DeFi protocol, there's always a risk of smart contract vulnerabilities.