Modular Data Infrastructure For AI
About the Project
Covalent is the leading modular data infrastructure layer designed to tackle the Long-Term Data Availability and verifiability issues in the AI domain. The Covalent Network embodies the progressive decentralization ethos, transitioning towards a community-owned and community-run protocol. By capturing and indexing blockchain data, the network ensures that this information is efficiently stored across multiple nodes, allowing for instant access through the GoldRush API (formerly known as the Unified API). This platform is not only compatible with industry-standard data tools but is also multi-chain compatible, storage-efficient, and capable of running on commercial and retail infrastructure with low resource requirements. Covalent’s mission is to ensure the sustained accessibility and availability of historical blockchain data, particularly as Ethereum and other blockchains evolve with technologies like rollups, Danksharding, and state expiry.
Covalent’s approach to data verifiability is pioneering, employing cryptographic proofs for every piece of work or transformation completed on the network. This ensures that Network Operators provide accurate data and behave honestly. The Covalent Network is one of the first data middleware protocols to implement such a proof-based system, which is crucial for maintaining the integrity and transparency of blockchain data. Additionally, the network is built for modularity and extensibility, using a novel canonical data storage format called "Block Specimens" that decouples the data storage layer of blockchains. This allows for further downstream enrichment of blockchain data without the need for resource-heavy nodes, promoting innovation and composability in the blockchain ecosystem.
Use Case
The primary use case of the Covalent Network is to ensure long-term data availability and verifiability for blockchain networks, particularly as blockchain technologies advance and traditional methods become inadequate. As blockchain data becomes more complex and the need for deep, granular historical data increases, Covalent provides a robust solution that captures every contract state, transaction, and storage slot across over 100 blockchains. This data is then made accessible through the GoldRush API, which allows developers to query this comprehensive dataset efficiently. This capability is crucial for enterprise customers and blockchain networks that rely on accurate and reliable data for their operations. Covalent has already partnered with significant players in the blockchain ecosystem, such as Consensys, Rainbow, Raleon, Rotki, Utopia, and Tally, demonstrating the high value of its data services.
Furthermore, Covalent's network design addresses the challenges of querying blockchain data directly, which is often time-consuming, expensive, and complex. By offering a unified, canonical analytical storage representation of all blockchain data, Covalent simplifies data access and manipulation, making it more accessible to traditional institutions and applications. This approach not only facilitates the sustained accessibility of historical data but also supports the growing needs of decentralized finance (DeFi) projects, decentralized autonomous organizations (DAOs), non-fungible tokens (NFTs), and other blockchain-based innovations. As the interoperability and complexity of blockchain transactions continue to increase, Covalent's solution becomes indispensable for providing a unified and transparent view of blockchain activity, ensuring the seamless operation and growth of the blockchain ecosystem.
Tokenomics
The Covalent X Token (CXT) is the backbone of the Covalent Network's economic model, designed to ensure both robust functionality and security. As an ERC20 token on Ethereum, CXT serves multiple purposes, including staking, governance, and network access. Validators and delegators stake CXT to earn rewards and secure the network, thereby maintaining its integrity. This staking mechanism not only incentivizes honest behavior but also deters malicious activities by implementing a slashing policy for dishonest actions. Additionally, CXT is used for governance, allowing token holders to vote on proposals that influence system parameters, ensuring a decentralized decision-making process.
CXT's economic model is further reinforced by its fixed supply of 1 billion tokens, with no planned inflation or deflation, creating a predictable economic environment. The initial distribution was carefully structured to promote long-term network sustainability, with tokens allocated across various categories, including seed, private sales, public sale, team, advisors, reserve, staking, and ecosystem. As of June 2024, over 85% of the CXT supply is circulating, highlighting the token's active role in the ecosystem. The unique burn-and-mint mechanism ensures that demand for CXT is driven by network usage, as stablecoin payments for API calls are converted to CXT and distributed to nodes. This structure supports the continuous demand for CXT, aligning network growth with token value appreciation.