Diphunter ¤@Diphunter18
The rise of @ConvexFinance solved one problem, but immediately "created" another.
Convex had accumulated one of the largest veCRV positions in the entire Curve ecosystem.
Someone now had to decide how all of that voting power would actually be used.
That's where CVX and vlCVX come in.
$CVX is the native token of Convex.
By locking CVX, users receive vlCVX (vote-locked CVX), giving them the ability to participate in Convex governance and vote on how Convex allocates its massive veCRV position across Curve Gauges.
At this point, the Curve Wars entered an entirely new phase.
Protocols were no longer competing only for veCRV.
They were competing for influence over the protocol that controlled one of the largest veCRV positions in existence.
What makes this particularly interesting is how the incentive structure reinforced itself over time.
More users deposited $CRV into Convex.
That increased Convex's veCRV position.
A larger veCRV position meant greater influence over Gauge allocations.
Greater influence made Convex increasingly valuable for protocols that depended on deep Curve liquidity.
As more protocols relied on Convex, additional incentives flowed into its ecosystem.
Those incentives attracted even more users to deposit CRV.
And the cycle repeated.
This became one of the strongest governance flywheels in DeFi.
It was driven by coordination.
The more governance power Convex accumulated, the more useful it became.
And the more useful it became, the more governance power it attracted.
That feedback loop is a big part of why Convex grew so quickly after launch.
It also changed the strategic thinking of many protocols.
Owning CRV was no longer the only path to influence.
Participating in Convex governance became an alternative way to shape where Curve liquidity would flow.
For protocols building stablecoins, lending markets, or other DeFi infrastructure, that influence could directly affect liquidity, trading conditions, and ultimately adoption.
Looking back, Convex didn't replace Curve's governance.
It became the coordination layer sitting on top of it.
Curve still determined how liquidity incentives worked.
Convex increasingly determined how a large share of that voting power was coordinated.
Once governance itself became this valuable, the next step was almost inevitable.
Protocols stopped asking how to accumulate every vote themselves.
Instead, they started asking a much simpler question,
What if we simply rewarded the people who already controlled the votes?
That's exactly where the series goes next.
