FiRM is seeing increasing adoption and Inverse Finance DAO introduces further opportunities for users of the Curve platform to unlock capital thanks to the new staked CVX market.
What Is Staked CVX?
Convex Finance introduced the CVX token which is issued to users who permanently stake CRV tokens through Convex. To take part in Curve’s governance and emissions system, users are required to lock CRV tokens for up to four years. For users unwilling to lock CRV, CRV can instead be staked in return for CVX which itself can be staked on Convex Finance to earn a share of the earnings generated by Curve, Frax CRV and FXS LP's.
Now, CVX stakers can actually deposit their CVX on FiRM in order to borrow DOLA at a fixed rate while continuing to receive staked CVX rewards.
How Does Staked CVX Work In FiRM?
Users simply deposit CVX as collateral to borrow DOLA and thanks to FiRM’s personal collateral escrows, the CVX tokens are then staked for you. FiRM does not custody the collateral, instead it is locked in a personal escrow under the user’s, now limited, control. The personal escrow allows the user to maintain custody of their collateral while still subjecting it to the rules of FiRM, enabling replenishments and liquidations. DOLA borrowers in FiRM pay a fixed rate in DBR. Read more about it in the docs.
How Do I Borrow Against Staked CVX?
You can combine deposits, borrows and purchasing DBR for convenience in FiRM’s interface. Prepare the position as you prefer and FiRM will let you confirm approvals and transactions in sequence when you’re done.
Deposit CVX into the FiRM market.
Purchase DBR for your desired duration.
You can perform any of these actions individually after the position has been created. To reduce the position, just click the “Unstake” button.
It is important to do your own research (DYOR) before depositing your CVX tokens into FiRM. There always is some risk involved in any investment, and you should make sure that you understand the risks before you proceed.
I hope this blog post has been helpful. If you have any other questions, please feel free to ask in Discord. Feel free to drop in to the community and ask questions on our Discord server. You can find more detailed information in our docs and here is a link to a more general FiRM & DBR explainer.