The State of Covalent: A Year in Review

A little more than one year ago, the Covalent (CQT) token sale on CoinList added more than 14,000 new token holders to the Covalent community, with over $10M in CQT tokens purchased during the sale.

Since then, Covalent has been on a growth tear, attracting a community of over 32,000 Web3 builders and providing their trusted blockchain data API to over 3,000 Web3 applications.

For those not familiar with the project, Covalent is a unified API that brings visibility to billions of Web3 data points. By fully indexing multiple blockchains and accessing their data from a unified API, Covalent captures granular information recorded within smart contracts, making it easier for developers to gain a more complete and accurate overview of the full blockchain ecosystem.

As we enter the second half of 2022, we take a look at the latest progress and developments in the Covalent ecosystem since their launch on CoinList.

Let’s dive in:

1. 32,000+ Developers And A Mature API Stack for 40+ Blockchains

Since 2021, Covalent has made impressive inroads attracting developers with its Unified API. Initially starting with just 500 developers, today the Covalent Network proudly supports a growing community of over 32,000 Web3 builders. These developers are building next generation products for users around the world, under marquee names like Rainbow Wallet, XDeFi, Bitski, Paraswap, Prysm, Zerion, Rotki, and more. Covalent is now a trusted API provider for over 3,000 applications.

The Covalent community also introduced Class A and Class B endpoints, enabling new and diverse use cases. As a result, the importance of educating new developers about Covalent’s API capabilities is more important than ever.

2. Capturing Mindshare Through Hackathons

Covalent has sponsored 40+ hackathons since its token sale on CoinList in 2021. The hackathons included a mix of its flagship events like #OneMillionWallets; and externally hosted hackathons, such as EthGlobal. As a result, over 600 projects have used the Covalent API during hackathons, capturing massive developer mindshare.

3. Growing Demand for CQT Staking

To understand the Covalent Network, users must first understand why Covalent came into existence. Covalent is set out to solve a challenge that’s often overlooked: The read-scalability problem.

Comprehending blockchain nodes at the developer level can be complex. Covalent’s thesis is that solving the read-scalability issue would enable new Web3 use cases, and its Unified API product is a code-free solution for developers. Indexing and organizing blockchain data manually is a process that can take anywhere from a few hours to thousands of hours. The Unified API queries this information, providing an additional layer of simplicity in a time where project innovation is more critical than ever.

The standardized Block Specimen data model is a canonical storage format that facilitates re-execution and enrichment outside the execution environment of a blockchain node. This unified, battle-tested, and normalized storage format underpins Covalent’s Unified API. Specifications of Block Specimens as well as a reference implementation are open-sourced.

Additionally, the delegated Staking upgrade to the Network was announced and successfully launched on May 4th, 2022.

Staking is the economic engine that powers the decentralized Covalent Network. Since its introduction, the staking parameters have increased every two weeks.

Every time the Network opened its staking allocation caps, they filled up in less than 24 hours, demonstrating pent-up demand for CQT among the Covalent community.

DEXs, NFTs, and stablecoin transfers typically take up gas usage on blockchains. Despite this, Covalent’s Block Specimen production entered Moonbeam’s Top-5 Identified Gas Paying Smart Contracts only a month and a half after staking was introduced.

4. Looking Ahead

For the remainder of 2022, the Covalent community is looking to build on the momentum and continue on its mission of bringing complete visibility to blockchain data. Here’s what to expect:

• Covalent Network Update: Moving into the latter half of 2022, development of the Covalent Network will continue. The current focus is ensuring increased functionality by enabling tracing and contract state snapshots with data. These capabilities will make the Covalent Network a critical infrastructure piece, especially as blockchain networks begin to explore modularity options.
• More Blockchain Indexing: Driven by our governance process, Covalent will continue adding new blockchains to its roster of indexed blockchains including scaling rapidly into layer-2 indexing with key partners. Submit your proposal here to propose a new chain to be supported by Covalent API.
• Product Robustness: Covalent Network's modular architecture allows various components to be iterated, including the front-end of its Network: the Unified API. The data throughput of the API, response speed, and response stability must continuously be improved, especially to onboard the new cohort of Web3 developers. According to Ganesh Swami, Co-Founder of Covalent Network, the API was not ready for Fortune 50 companies in 2021 and early 2022. The scale and magnitude of those customers with their existing user base of tens of millions of users is much bigger than existing Web3-native projects. However, Fortune 50 companies generated a stepwise increase in API usage and Network protocol revenue, making them an essential source of growth..
• Future products: There’s a broad industry need for cryptographically secure and verifiable data. Covalent data architecture enables the community to develop more products atop the decentralized network to address newer and as-of-yet unknown use-cases.
  

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