Yield Accrual

As part of the ERC-4626 Tokenized Vault Standard, afCVX accrues yield through its redemption ratio. Since the yield from Vote Incentives and Convex will constantly accumulate and be compounded, this means that afCVX’s value effectively always increases relative to CVX.

Example:

1) Say your stake at the very beginning when 1 CVX = 1 afCVX. You deposit 100 CVX and receive 100 afCVX back.

2) If APY were to stay completely constant at for example, 40% for an entire year, the ratio between CVX and afCVX would change by 40%. So 1 afCVX = 1.4 CVX, or 1 CVX = 0.714 afCVX.

3) At this point, you could trade your 100 afCVX back to Asymmetry’s smart contracts and receive 140 CVX in return.

4) This means as long as you are holding afCVX, you are optimizing your CVX yield! Plus, you do not need have to hold afCVX from Asymmetry directly. For example, you can purchase afCVX on an exchange; as every afCVX token is exactly the same, you will automatically receive the benefits of staking just by holding the token!

Some users with eagle eyes may notice that after the system calls the borrow function, the exchange ratio moves slightly up, relative to CVX. This is because the CLever system holds onto a 1% "early repayment fee" in the event that users withdraw early. While it's unlikely that this fee is ever fully paid, the system must take the most conservative approach to ensure solvency at all times. This is refelcted by the 'afCVX Vault Power' on the afCVX page - detailing as afCVX yield grows over time as non-liquidating leverage builds with system maturity.

Why does the ratio fluctuate?

The afCVX:CVX ratio may now fluctuate on a day-to-day basis after Asymmetry's Governance community voted to enact a 10% performance fee to the product. In addition, the ratio may jump around CLever harvests, which have recently changed and are now spaced out now that they split their harvesting across Votium and StakeDAO, of which have different harvesting cadence.

The ratio may fluctuate on a day-to-day basis due to multiple CLever harvests and the performance fee, but rest assured that afCVX's interest will always accrue as normal over the course of weeks and months as it always has done since inception — Proving and establishing itself as the easy and hands-free way to earn on your CVX.