- The L2 protocol becomes the second sidechain to be integrated with Convex Finance
- The development would allow blockchain interplay as CVX investors shun HODLing
In the last quarter of 2022, Convex Finance [CVX] committed to integrating several sidechains on its network. So, on 9 March, the liquidity provider announced that it had launched on Polygon [MATIC] to further foster the mission.
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Sidechains are secondary blockchains with their own consensus protocol, allowing the parent blockchain to improve its security and privacy.
Pool in the pool— that’s the way
According to the Medium-channeled statement, the integration would improve liquidity provision on Curve Finance [CRV], and also boost token staking on the protocol.
The disclosure means that Polygon becomes the second sidechain and layer-two (L2) Ethereum [ETH] scaling solution to be involved.
In November 2022, Convex added Arbitrum to the fray. This led the former to create a cross-chain interface so users can interact with its Liquidity Pools (LPs).
Convex confirmed that the case Polygon would be similar to the interaction with Arbitrum. However, information from DeFi Llama revealed that the Convex Finance Total Value Locked (TVL) remained still in the fifth position.
Source: DeFi Llama
The TVL represents the number of assets deposited by liquidity providers in smart contracts into a protocol. At the time of writing, the TVL had decreased by 5.60% in the last 24 hours. An interpretation of this points to hesitation in positively impacting the DeFi sector capital and applications.
Convex added that the development would enable the single-sided staking in line with its recently-passed cvxFXS proposal. Furthermore, the blockchain yield optimizer pointed out that the current Arbitrum pools would align with the Polygon integration to aid user access. The communique mentioned,
“Convex will be migrating the current Arbitrum pools to new pools, with the aim of aligning the code base with Polygon to prevent confusion for integrators.”
Hitting the tops and bottoms
Meanwhile, the Convex development activity picked up a significant increase as a result of the update. The metric explains developers’ contribution to upgrades within an ecosystem.
Read Convex’s Finance [CVX] Price Prediction 2023-2024
As revealed by Santiment, the Convex development activity rose to 0.309 even though it dropped to 0.238 at press time. This brief jump implied an impressive dedication from the Convex Finance development team.
Source: Santiment
The network growth also posed a similar trend to the development activity. The metric illustrates the adoption of a project. So, the downturn implied that Convex only gained traction for a short while with minimal notable growth.
Regardless of the development, CVX investors have remained resolute in neglecting to hold the token for the short term. This was because the exchange outflow was 2444— a decrease from the 1 March high. At press time, the CVX traded at $4.92, following the wider market price collapse.
Source: Santiment
