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Falling Ethereum gas fees, the debut of Convex Finance, and the DeFi sector perhaps nearing a bottom have all contributed to CRV’s astounding 150 percent gain since May 23.
DeFi tokens and protocols were heavily impacted on May 19 when the Bitcoin price fell below $30,000, and though BTC has entered what some experts describe as a ‘compression’ phase, the total value locked in DeFi and many of the sector’s tokens have yet to recover to pre-market crash levels.
Curve DAO token (CRV) is one of the few DeFi tokens that has had a big recovery in the last two weeks as a result of lower Ethereum gas fees, the debut of Convex Finance, and the DeFi sector reaching a bottom.
Data from TradingView shows that CRV has increased 55% since June 1, rallying from a low of $1.76 on June 1 to an intraday high at $2.76 on June 3 alongside a 250% increase in 24-hour trading volume.
Convex Finance launch attracts CRV holders
Convex Finance (CVX), an optimizer for the Curve Protocol that permits exchanges of comparable assets like stablecoin to stablecoin transactions, is one driver of the quick spike in price and momentum for CRV.
Introducing Convex Finance! A new platform, built by Defi Natives, to simplify your Curve-boosting experience to maximize your yields.
Read more here! https://t.co/65Dog7RdqE
— Convex Finance (@ConvexFinance) April 15, 2021
Since it’s official launch on May 17, the Convex protocol has rapidly gained a substantial user base thanks to yields as high as 52.16% and some analysts have suggested that the protocol is challenging Yearn.finance for CRV-related deposits.
Data from Defi Llama shows that in the two and a half weeks since the launch of Convex Finance, the total value locked (TVL) on the protocol has surpassed $2.3 billion with stakers on the protocol earning $4.3 million in total revenue.
Convex Finance and Yearn.finance both rely heavily on CRV to run their platforms, and the increased activity has led in a decrease in the circulating amount of CRV. This may have aided the CR price as investors scramble to stake tokens for the biggest potential return.
Curve Finance and the broader DeFi ecosystem may also profit from a significant drop in gas prices on the Ethereum (ETH) network, which previously priced out many retail traders from conducting the simple approval and confirmation transactions necessary to stake and collect rewards from DeFi protocols.
Lower fees have allowed a wider range of users to re-engage with their favorite DeFi protocols, and Curve has been a significant beneficiary of this development.