New Project Preview | Interpreting Convergence: A Governance Aggregation and Profit Redistribution Layer Similar to Convex.

New Project Preview | Interpreting Convergence: A Governance and Profit Redistribution Layer Similar to Convex.

The protocol issues billions of dollars in native tokens every year, and in order to capture a portion of the emissions, Convergence is launching a layer similar to Convex that aggregates governance and redistributes earnings to stakers. Crypto analyst DeFi Made Here has written an analysis of the protocol mechanism and its token economics.

Convergence aims to create a governance black hole, starting with Tokemak and then focusing on the Curve ecosystem. Overall, Convergence will: 1) aggregate protocols and run meta-governance (governance of underlying protocols) like Convex; 2) run its own governance and direct emissions like Curve; 3) establish a POL like Olympus by issuing discounted bonds with $CVG.

Convergence issues cvgAsset (liquid wrapper) for every deposited asset at a 1:1 ratio. The underlying assets will be permanently pledged/locked, and their governance will be delegated to the $CVG (native token) locker. The native yield from pledging/locking assets will be boosted and redirected to cvgAsset pledgers. Similar to users providing Curve liquidity on Convex for higher yields, Convergence will allow them to stake their LP for each aggregated protocol. LPs will earn higher yields depending on the design of the underlying protocol.

One notable feature of Convergence is its treatment of POL. The protocol will issue bonds instead of liquidity mining to accumulate governance power in the treasury. The bond program is designed to last for 4.5 years/30% of supply. The treasury is not meant to provide any support or redemption. Instead, it will be used to generate revenue, further allocated every three months in the form of $CRV, $CVX, $FXS, $SDT, and $CNC to the $CVG locker. The $CVG locker will also manage the protocol, run meta-governance, and direct $CVG emissions. $CVG can be locked for up to 96 weeks and has a very unique locking design.

Reference: https://twitter.com/DeFi_Made_Here/status/1665711633870585859

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

Crypto Lending Dealt Another Blow as Chinese Court Strikes Down Industry in Second Major Ruling

Mr. Ming, the lender, was left with no options after the borrower was unable to repay his 80,000 Tether loan.

DeFi

SafeMoon Riding Through Recent Exploits while Facing the SEC's Charges

SafeMoon promises to address concerns as authorities investigate those responsible for $8.9 million in losses.

Blockchain

The study found that 5% of the Monero currency circulating in the market was mined by malware

According to the study, mining was done through encrypted hijacking, using other users’ computer processing pow...

DeFi

Simplifying DeFi: The Rise of MC2 Finance

Smart decentralized wealth management platform MC2 Finance joins Cointelegraph Accelerator program

Finance

Australian Government to Regulate Crypto Exchanges: A Balancing Act Between Innovation and Consumer Protection

The Australian Treasury has just released a new paper on cryptocurrencies, detailing upcoming rules that will require...

Policy

UK’s FinProm A Welcome Change in Compliance, Yet Challenges Persist According to Transak's Head of Compliance

Fashionista talks to James Young, the compliance head of Transak, about how the UK FCA's new financial promotion rule...