What is Covalent (CXT): Advancing the Data Infrastructure Space

Covalent Network has emerged as a leading data infrastructure layer in the blockchain industry, tackling critical long-term challenges around data accessibility and availability. Its strategic partnership and integration with the Sei ecosystem have solidified Covalent’s role as a premier solution for data availability and indexing in the crypto sector.

TL;DR

Covalent is a top-tier modular data infrastructure and decentralized network, purpose-built to simplify Web3 development and make blockchain data more accessible. With its Block Specimens technology, Covalent streamlines data storage and retrieval, delivering high performance and scalability. Its multi-chain support gives developers comprehensive data coverage and flexibility. The transition from the CQT token to CXT is central to governance, staking, and accessing Covalent Network services, building a robust ecosystem. By making data access seamless and offering a powerful toolkit, Covalent enables developers to create innovative blockchain applications and drives the crypto ecosystem’s expansion.

What is Covalent?

Covalent stands out as a modular data infrastructure layer, acting as a blockchain data platform designed to simplify access to complex blockchain information. It aggregates data from numerous blockchains, processes it for accuracy, and delivers it through a unified API, empowering developers to build advanced applications efficiently. This streamlined process saves time and resources, ensures data reliability, and makes Covalent a go-to choice for developers seeking robust and efficient blockchain data access.

Covalent addresses core challenges in blockchain technology. Accessing blockchain data is often complex, requiring significant technical expertise and resources. With Ethereum protocol upgrades like Dencun, long-term data availability has become a pressing concern, making historical data access on Ethereum and other base layers more difficult and costly. Covalent solves this by offering a unified, multi-chain platform for accessing and analyzing blockchain data, standardizing it in a user-friendly format.

How does Covalent work?

Covalent bridges the gap between raw blockchain data and actionable insights as a data aggregator, standardizing data from multiple blockchains into a single API. This makes it easy for developers to integrate blockchain data into their applications. Covalent’s process involves three main components.

First, data aggregation: Covalent collects key data points across various blockchains—such as transactions, token balances, NFT metadata, and other relevant metrics. Second, standardization and processing: Covalent not only gathers data but also processes and cleans it, ensuring consistency and clarity regardless of the originating blockchain. Third, GoldRush API: Formerly the Unified API, the GoldRush API delivers this processed data, allowing developers to integrate blockchain data without managing each chain’s complexity.

Covalent’s data infrastructure is engineered for efficient collection, processing, and delivery of blockchain data to applications. Core components include remote procedure call nodes for data retrieval, a block specimen producer for data optimization, a query node operator for managing data requests, and a block result producer for generating query outputs. This architecture lets Covalent aggregate data from multiple chains, process it into a standardized Block Specimen format, and offer rapid access through its GoldRush API.

Why is Covalent so popular?

Covalent is popular because it solves a major challenge for blockchain and Web3 developers: making blockchain data easily accessible and analyzable. Its unified platform saves developers and analysts significant time and effort.

One of Covalent’s main strengths is its multi-chain compatibility. Unlike many platforms restricted to a single blockchain, Covalent aggregates data from a wide array of chains, including Ethereum, Solana, Base, Avalanche, and more. This comprehensive data access gives developers a holistic view of the crypto ecosystem and eliminates the hassle of managing multiple data sources.

Another key advantage is Covalent’s network and storage efficiency through block specimens. Traditional blockchain data storage is resource-intensive and cumbersome, especially with Ethereum state expiry. Covalent addresses this with its innovative “block specimens” approach, capturing and storing granular block-level data. This method slashes storage requirements while preserving data integrity.

Covalent also leverages its verifiable data infrastructure to tackle AI model bias. As AI models advance, concerns about output bias grow. Covalent’s verifiable data, including its “Ethereum Wayback Machine,” provides clean, unbiased datasets, enabling developers to create more reliable AI models.

The Evolution of the CQT Token to CXT: Covalent’s Transformation

The shift from CQT to CXT marks a pivotal moment in Covalent’s development. This strategic upgrade enhances platform capabilities and opens new growth opportunities. Motivated by improved tokenomics, expanded utility, and better community alignment, the transition was designed for a seamless user experience.

CQT holders had their tokens automatically converted to CXT at a 1:1 ratio. The main change is that CXT now powers all interactions on Covalent Network, including staking, governance, and data access.

This evolution lays the foundation for a more robust, scalable Covalent Network. With CXT, the team can accelerate feature development, strengthen partnerships, and drive ecosystem value. The transition involved a complex technical overhaul, including contract upgrades, token distribution, wallet integration, and continuous network uptime.

The move attracted significant community attention, with largely positive feedback. While some users had initial questions about the impact on their assets, proactive communication and support from the Covalent team ensured a smooth transition and maintained community confidence.

CXT Tokenomics

CXT is the native token of Covalent Network, and its tokenomics are notable. The total supply is capped at 1,000,000,000 CXT, with 850,000,000 CXT currently circulating. Distribution breaks down as follows: team 14.4%, private sales and seed funding 33.3%, public sale 3.4%, advisors 2%, staking rewards 8%, reserve 18.9%, and ecosystem 20%. Importantly, CXT has no inflationary or deflationary mechanisms—the supply remains fixed at one billion. The transition from CQT to CXT has reinforced Covalent’s economic foundation.

CXT Utility

CXT serves several functions within the Covalent ecosystem. For governance, holders can vote on proposals to adjust system parameters, such as adding new data sources, enabling specific geolocations, or setting data modeling requirements. This decentralized governance ensures the platform adapts to its community’s needs.

For staking and validation, CXT allows holders to help secure the network and earn rewards. Validators maintain data integrity and receive rewards in CXT. Token holders can delegate their CXT to validators, participating in network security and earning a portion of staking rewards. The staking APR is variable, typically between 8% and 18%, depending on total staked amounts and the emission rate.

CXT is also required to access Covalent’s data services. Users pay for data queries, API calls, and other interactions with CXT, directly tying token utility to the value created by the network. The token also incentivizes ecosystem contributors, such as developers and data providers, supporting network growth.

The Future of Covalent Network

With a foundation built on data excellence, developer-centric design, and an active community, Covalent is well positioned to shape blockchain data infrastructure and lead industry innovation. The Covalent roadmap focuses on two priorities: expanding its product suite and increasing CXT accessibility.

On the product front, Covalent is integrating advanced AI features—training large language models and building efficient data pipelines—to lead in decentralized AI and reduce model bias. For CXT accessibility, Covalent is expanding the token’s availability across more trading platforms, ensuring broader exposure for crypto enthusiasts to its innovations.

Conclusion

Innovations like the Ethereum Wayback Machine and Block Specimen have made Covalent a key player in blockchain data infrastructure. By resolving issues of accessibility, reliability, and data utility, Covalent empowers both developers and enterprises to unlock the full potential of blockchain technology. Its approach to data aggregation, processing, and delivery has made Covalent a popular choice for building robust, scalable applications.

The CXT token, as the successor to CQT, is integral to the Covalent ecosystem—driving governance, network security, and participation incentives. As Covalent expands its reach and capabilities, CXT is set to play an even greater role in the platform’s future. Covalent’s combination of verifiable data infrastructure, multi-chain compatibility, and sound tokenomics positions it as a leader in blockchain data infrastructure, accelerating Web3’s growth and maturity. The successful CQT to CXT transformation underscores Covalent’s ongoing commitment to innovation and continuous improvement.

FAQ

What is the CQT cryptocurrency?

CQT is an Ethereum-based cryptocurrency with a fixed supply of 1 billion tokens. There are currently no tokens in circulation.

What happened to CQT Crypto?

CQT is now obsolete and has no value. It was replaced by CXT, and trading CQT is no longer recommended.

Is Covalent cryptocurrency a good investment?

Covalent (CQT) offers strong investment potential. Its blockchain data protocol and institutional adoption point to a promising future, but investors should keep market volatility in mind.

What is CryptoQuant used for?

CryptoQuant delivers in-depth cryptocurrency market analysis and on-chain data for investors and industry professionals, focusing on actionable insights and data tracking.