What is Covalent? All You Need to Know About CQT

How can developers, researchers, and businesses readily access and analyze data from many networks is a challenge that the developing field of blockchain faces. As transactions multiply and networks diversify, there’s an increasing need for a simple tool to bring clarity to this complex data landscape. Making sense of decentralized information becomes more crucial each day. Covalent (CQT) presents a remedy to meet this demand.

What is Covalent (CQT)?

In the fall of 2017, during a distributed systems hackathon, the seeds of Covalent were sown with the creation of an initial version aimed at providing an interface for data access across different websites. This embryonic idea, developed by Ganesh Swami and Levi Aul, swiftly transitioned into Covalent’s establishment in 2018 as a company. Covalent’s objective was to offer a unified API enabling deep, granular, and historical blockchain data access. For three diligent years, the team indexed every transaction, block, and contract state on the Ethereum blockchain.

Swami, a trained physicist with an illustrious career that includes founding an NYSE-listed company, and Aul, an architect of one of Canada’s pioneering Bitcoin exchanges, steered the project with unyielding dedication. Their vision, along with their team of adept data scientists and engineers, garnered $5 million across two funding rounds from notable investors, including CoinGecko and Alameda Research.

The culmination of their hard work manifested on April 29, 2021, with the launch of the Covalent Network, a progressive decentralized blockchain powered by Moonbeam technology, marking Covalent’s evolution from a hackathon project to a pioneering force in blockchain data accessibility.

Covalent aims to provide seamless access to essential blockchain data. By indexing each block’s data, including transactions, addresses, and contract interactions, Covalent offers developers a comprehensive data suite via a single API. This aids in enhancing dApp performance and services, eliminating preliminary setup steps.

How Does Covalent Work? Unified API and Working Structure

Covalent’s Unified API powers Unified Data, a ground-breaking solution to the challenges of accessing blockchain data. As the blockchain ecosystem grows, developers often grapple with the intricacies of each unique chain. Running public nodes or drafting custom SQL queries is costly and time-consuming, with data indexing further slowing down the process. Covalent, offering transparency across all blockchain networks, simplifies this with its RESTful API. By using a consistent format, developers can effortlessly fetch data from any supported blockchain, such as Ethereum or Binance Smart Chain, by merely adjusting the blockchain identifier in the API call.

Unlike the traditional JSON-RPC, which handles data requests one by one, the Covalent API allows multiple-object querying, eliminating the inefficiencies of the former. This is pivotal for diverse Web3 applications like gaming, trading, on-chain analytics, and NFTs. Covalent can also empower developers to design custom API endpoints, amplifying its versatility.

Central to Covalent’s efficiency in fetching blockchain data is its intricate node infrastructure. To ensure accurate and up-to-date data retrieval, Covalent runs full nodes for each supported blockchain. This robust setup allows the Covalent network to directly tap into raw blockchain data, ensuring the integrity and comprehensiveness of the information accessed. As a result, when developers use the Unified API to fetch data, they’re interacting with a system that’s intricately linked to over 100 blockchains through these full nodes.

What makes Covalent truly stand out is its compatibility with multiple blockchains via a single API, a feature that streamlines Web3 development and accelerates product launches. As blockchain permeates industries like music, real estate, and energy, tools like Covalent’s Unified API will be indispensable in harnessing its full potential.

Source: Covalent

Covalent’s advanced blockchain ecosystem relies on a meticulously crafted working structure to ensure the transparent, efficient, and secure retrieval of blockchain data.

At the heart of this structure are Validators, who play a pivotal role in ensuring transaction authenticity and block verification. They validate transactions and, once verified, add them to the blockchain, ensuring the integrity of the data.

Parallelly, Block-Specimen Producers create and propose blocks, acting as the backbone of the transaction process. These blocks, once verified by Validators, become a part of the chain. Indexers, on the other hand, optimize data retrieval. They catalog blockchain data, making it easily searchable and accessible, thus enhancing efficiency. Storage-Request Responders serve as the custodians of stored blockchain data. They handle requests for data storage, ensuring that data remains available and immutable.

Lastly, Query Request Responders are crucial for data retrieval. They handle on-demand queries, fetching specific data pieces from the blockchain for users or applications. Together, these entities create a cohesive working structure that ensures a blockchain’s operation is swift, secure, and efficient, underlining the collaborative nature of decentralized systems and the roles that ensure its smooth functioning.

In Covalent, a beneficial job is performed by Directory Service Nodes, which steer customers to the right nodes based on their data and budget needs. These nodes create a decentralized directory, simplifying finding nodes with desired resources. Despite efficiently processing myriad small queries, they operate without direct reward incentives, akin to public DNS servers.

Covalent Use Cases

Covalent provides a pivotal solution in the realm of blockchain data management and accessibility. Its versatility is evident through various use cases, catering to different sectors within the decentralized ecosystem. Some key applications include:

DeFi Analytics

Covalent offers deep insights into decentralized finance platforms, enabling users to track liquidity positions, understand yield farming rewards, and monitor trading behaviors across multiple blockchains using a single API.

Gaming Integration

Game developers can harness the Covalent API to seamlessly integrate blockchain assets and actions into their games, enhancing player experiences by marrying the worlds of gaming and blockchain.

On-chain Forensics

Investigators and analysts can utilize Covalent to trace and monitor on-chain activities, detecting illicit transactions, and wallet behaviors, and ensuring regulatory compliance.

NFT Platforms

Artists and marketplaces can fetch data on non-fungible tokens (NFTs) across different blockchains, facilitating provenance checks, sales history reviews, and other crucial data to ensure the authenticity and value of digital art and collectibles.

Cross-Chain Dashboards

Developers and businesses can use Covalent to build comprehensive dashboards that pull data from various blockchains. This allows for a unified view of assets, transactions, and activities across multiple networks, simplifying the complexities of the decentralized world for users and investors. \

In essence, Covalent exemplifies the transformative power of blockchain technology, offering diverse applications that streamline operations and enhance the potential of decentralized systems.

What is the CQT Token?

CQT is Covalent’s native token, powering blockchain data accessibility and decentralized infrastructure. Its maximum supply is capped at 1 billion units, of which 607.9 million (60.8%) are already in circulation (August 2023).

The CQT token, short for Covalent Query Token, stands as the network access token for the Covalent Network, an integral part of its decentralized data ecosystem. Distinctively, CQT is not a conventional medium of exchange for external goods or services and holds no rights outside the Covalent Network. It is an essential tool for rewarding ecosystem contributors and creating a system where everyone benefits.

The CQT token is designed to guide and incentivize positive behaviors within the Covalent Network, fostering genuine engagement and sustainable network growth. Its use cases are:

• Infrastructure Currency: It powers user interactions, with Network Operators receiving CQT as compensation for delivering data.
• Rewards System: The token incentivizes users to provide niche data sets, fostering growth and diversity within the Covalent platform.
• Performance Multipliers: Providers offering high-quality service, including uptime and low latency, might earn increased CQT rewards.
• Governance: Token holders can influence the network’s development and features, transitioning the ecosystem to be more community-driven.
• Staking: Users can stake CQT, which, when done by Network Operators, ensures optimal behavior and contributes to network utility. This staking mechanism also allows average users to delegate tokens, allowing broader participation.

CQT essentially crafts an intricate economy between data vendors and users while fostering growth, accountability, and collaborative governance within the Covalent Network.

The allocation of Covalent Query Token (CQT) is carefully designed to foster sustainable project growth and ensure diverse stakeholder involvement. Here’s a detailed distribution:

• Private Sale: 23.3%
• Ecosystem: 20%
• Reserve: 18.9%
• Team: 14.4%
• Seed: 10%
• Staking: 8%
• Public Sale: 3.4%
• Advisors: 2%

Source: Covalent

Covalent’s Main Features: Token Balance, NFT and Historical Transactions APIs, Crypto Taxation SDK

Covalent distinguishes itself with its specialized features. Its core offerings are the Token Balance, NFT, and Historical Transactions APIs, as well as the groundbreaking Crypto Taxation SDK.

Token Balance API

Covalent’s Token Balance API provides a comprehensive view of wallet ERC20 balances, including allowances, transfers, and prices. This unified API offers data across 100+ blockchains, making it efficient in terms of time and cost. By highlighting approvals and assets that are at risk, it improves security. It also assures user-friendly name resolution and provides useful features like historical token holders, contract metadata, and wallet activity across various blockchains. It is a robust tool designed for both startups and enterprises.

NFT API

Covalent’s NFT API offers streamlined access to NFT media, metadata, and human-readable sale transactions across 100+ blockchains. This unified API expedites the integration of NFT features, making them more cost-effective and faster to deploy. It ensures user-friendly transaction displays, consistent floor prices, and includes features like automatic metadata refreshes, NFT spam detection, and comprehensive ownership and transfer histories. Designed to enhance user trust and experience, it is ideal for startups and enterprises.

Historical Transactions API

Covalent’s Historical Transactions API provides efficient access to historical transactions across multiple blockchains. With a unified schema, it decodes cryptic hashes into user-friendly formats, ensuring a smoother user experience. Designed for scalability, it captures every transaction from genesis blocks, summarizes wallet activities, and bypasses the need for RPCs. This API-first solution is apt for wallets, analytics, and more, streamlining blockchain interactions.

Crypto Taxation SDK

Covalent’s Crypto Taxation Kit offers a robust suite of APIs tailored for crafting scalable crypto tax solutions. Harnessing historical transaction data, it ensures precise and comprehensive records. Its unified API standardizes data across all chains, enriched with user-friendly details for clarity. This kit covers everything from summarizing wallet activities and detecting wallet activity across chains to decoding complex DeFi transactions. Ideal for tax season, it’s a trusted and reliable solution for modern financial needs.

Covalent Ecosystem

Covalent (CQT) offers a decentralized solution that enables comprehensive, granular, and historical blockchain data. Its ecosystem has seen integration with a variety of wallets, Dapps, projects, and more. Here is an overview:

• Frontier Wallet: Frontier stands out as a versatile wallet, offering users not just a secure place for their digital assets, but also a comprehensive view of their holdings. With Covalent’s integration, Frontier provides an even deeper dive into transactions, balances, and performance metrics, enabling users to make informed decisions.
• Zerion: In the dynamic world of decentralized finance, Zerion aggregates DeFi assets and protocols. When married with Covalent’s robust data infrastructure, it gives investors a panoramic view of their portfolios, tracking performance across different protocols and assets.
• OpenSea: As the NFT market explodes, OpenSea taps into Covalent’s data resources. This collaboration enhances user experience by offering detailed insights into NFT ownership, provenance, and real-time pricing.
• Klaytn Partnership: Marking a significant stride, Covalent has fused its capabilities with Klaytn, a leading enterprise-grade blockchain. This symbiosis amplifies Klaytn’s developer tools, enriching them with Covalent’s vast dataset. This allows developers to fetch Klaytn’s mainnet data seamlessly, streamlining dApp development and analytics.

Is Covalent a Good Investment?

In the ever-evolving landscape of blockchain technology, the value of any platform often rests on its capacity to solve real-world problems and enhance existing processes. Covalent, with its core operation of simplifying on-chain data observability, stands at the forefront of this movement. By streamlining the development of applications that provide clear insights into on-chain data and network usage statistics, Covalent is catalyzing the growth of blockchain’s applicative reach. This isn’t just about making the existing system better; it’s about pioneering new use cases and enhancing the broader crypto ecosystem. As the technology proliferates at such an exponential rate, it becomes evident that platforms like Covalent possess the potential to resonate with a vast audience.

How to Own CQT?

To own CQT, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account, and get it verified and funded. Then you are ready to go through the steps to buy CQT.

News on Covalent

According to what was published on the official Covalent blog, dated July 28, 2023, Covalent has joined forces with Chainlink Labs to support the Chainlink BUILD program. This partnership equips BUILD participants with mentorship, access to the Covalent ecosystem, and grants up to $25,000 for Covalent’s products.

Erik Ashdown, Head of Ecosystem at Covalent, highlighted the mutual benefits of combining Chainlink’s off-chain data services with Covalent’s on-chain data capabilities. This collaboration aims to foster innovation in the Web3 domain, benefiting developers and the broader crypto community.

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