What is Covalent? (CXT)

With a library of over 100 billion rows of structured, verifiable data spanning 100+ blockchains, Covalent simplifies access to on-chain information for developers and businesses.

Developers also use Covalent to build tokenized on-chain AI agents to help optimize DeFi yields, detect fraud, evaluate NFT rarity, and automate compliance, driving decentralized innovation.

Covalent’s performance is evidenced by its ecosystem achievements, including (as of January 2025):

• 22 billion paid API queries processed in four months.
• 15% month-over-month revenue growth used for CQT, Covalent’s native token, buybacks.
• 30%+ of CQT supply staked for projects like the Ethereum Wayback Machine.

Trusted by customers like Ondo Finance and THORChain, Covalent serves as a cornerstone of the Web3 data economy, supporting blockchain transparency, efficiency, and innovation.

Who Created Covalent?

Covalent was founded in 2017 by Ganesh Swami and Leopold Boucher. Through Covalent, the co-founders aimed to make blockchain data more accessible and usable for developers, businesses, and end-users.

The project launched its native token, CQT, in 2021 through a token sale that aimed to promote decentralized data access.

How Does Covalent Work?

Covalent aims to simplify blockchain data accessibility by providing developers with tools to retrieve and use complex on-chain data efficiently.

Thanks to its modular architecture and APIs, Covalent eliminates the need for developers to build custom data pipelines, which helps reduce technical overhead.

Unified API

Covalent’s Unified API provides a single endpoint to access data across multiple blockchains.

The API features standardized data to ensure consistency across different networks and is built to be easy to use so that developers can easily retrieve historical data for the blockchain they are querying, including wallet balances, transactions and more.

Covalent currently supports over 100 blockchains, making it one of the most used blockchain data solutions.

Data use cases

Covalent is built to support many decentralized applications (dApps) across blockchains and AI ecosystems, and can be used for:

• DeFi yield optimization: AI agents can be built to analyze and maximize returns.
• Fraud detection: Tools that can identify transaction anomalies.
• NFT rarity evaluation: Provides data for determining the rarity and value of NFTs.
• Compliance automation: Offers verifiable on-chain data to help regulatory compliance.

The Ethereum Wayback Machine

One of Covalent’s main initiatives is the Ethereum Wayback Machine that allows users to explore historical blockchain states.

This project relies on staked CQT to help preserve blockchain history and transparency.

What is Covalent’s Consensus Mechanism?

Covalent uses a Proof of Stake (PoS) consensus mechanism to secure its network and validate data queries.

Validators stake CQT tokens to process API requests and get compensated for their work. Delegators can contribute their tokens to support validators and earn a portion of the rewards.

If the validators act maliciously, a portion of their staked CQT can get slashed (or destroyed). This model helps ensure that the data retrieval is accurate, transparent and tamper-proof.

How Does CQT Work?

Covalent’s native token, CQT, is integral to the platform’s ecosystem and can be used for:

• Governance: holders can participate in the future of the network by voting on proposals related to the network's development, upgrades, and overall direction.
• Staking: Validators and delegators earn rewards for their contributions to network security and query processing.
• Transaction Fees: CQT is used to pay for API queries and other transaction fees.

Tokenomics

CQT has a maximum supply of 1 billion tokens.

To date, Covalent has had a 15% month-over-month revenue growth, which has helped support CQT buybacks. After the buyback, the CQT tokens are burned which creates a deflationary effect that affects the token price.

New Developments and Ecosystem Growth

Covalent continues to expand its ecosystem with initiatives that drive innovation:

• Paid API Growth: 22 billion API queries processed in just four months highlight Covalent’s scalability and demand.
• Customer Adoption: Partners like Ondo Finance and THORChain useCovalent’s platform for advanced data solutions.
• AI Integration: Covalent’s tools are increasingly used to build tokenized AI agents, bridging the gap between blockchain and artificial intelligence.

Covalent essentials

• Covalent simplifies on-chain data access for developers and businesses with a Unified API that supports 100+ blockchains, reducing technical overhead and enabling use cases like DeFi optimization, fraud detection, and compliance automation.
• Covalent’s native token, CQT, powers staking, governance, and transaction fees. With 22 billion API queries processed in four months, 15% monthly revenue growth, and partnerships with Ondo Finance and THORChain, Covalent demonstrates its scalability and value in the Web3 ecosystem.
• Initiatives like the Ethereum Wayback Machine preserve historical blockchain data, while tokenized AI agents built on Covalent optimize DeFi yields, evaluate NFT rarity, and enhance blockchain transparency and compliance.