Investors appear to be rallying around decentralized finance (DeFi) protocol Convex Finance (CVX), which has inked 8.98% growth to $5.57, per CoinMarketCap's data. Convex Finance's growth is a testament to the encompassing growth rally in the industry today, which has also spread to the less popular DeFi protocols.
Convex Finance was designed as a protocol that allows Curve liquidity providers to earn a share of trading fees on Curve without staking liquidity there. Besides its role as a crucial liquidity-rewarding outfit, Convex Finance also operates a very unique decentralized autonomous organization (DAO) system for making decisions concerning new initiatives in its ecosystem.
According to a recent update by the protocol, voting for a new proposal is currently underway for vlCVX token holders regarding the removal of gauge-weight hard caps. As it noted, it started its self-governance journey by setting the gauge weight at an initial 30% at inception, a cap that was increased to 50% in 2021.
More recently, the DAO raised the cap to 70% and, at the moment, it believes removing all forms of the cap is the next phase for the protocol.
Justifying the proposal
In its justification of the need to remove the hard cap on the gauge weight, Convex Finance said in the 11 months after the latest cap upgrade, it has experienced immense participation in governance voting and activities.
It noted that side chains have also been deployed, a testament that higher caps are proven to provide a more effective protocol and ecosystem functioning.
The proposal to remove the gauge weight hard cap is currently passing by 99.27%, while 0.57% of the committed tokens are currently against the move. Should the votes pass as it stands, the next steps will begin on April 13.