A Beginners Guide to Covalent | Covalent

A Beginners Guide to Covalent

Apr 22, 2021

Blockchain technologies can change the world. However, despite the proliferation of digital assets on the blockchain, granular and historical blockchain data is almost impossible to access. It is time-consuming and computationally intensive. If blockchain-based products are to become attractive to mainstream users, the builders should be able to analyze blockchain data without having to invest considerable resources in trying to make sense of highly unstructured and unstandardized data.

Covalent’s vision is to empower the pioneers of tomorrow by providing the richest and most robust data infrastructure for the entire blockchain ecosystem. Covalent does so through a single, unified API.

To paint a picture, imagine two excel sheets. In one, you have data pulled using GraphQL. It contains a single tab or multiple, each containing data specific to a protocol such as Uniswap or Aave. You have data specific to that protocol and that’s it. While this is simple and serves certain business use cases, it is limiting.

Now imagine the second excel sheet, this one containing a single tab with data pulled using the Covalent API. This sheet contains anything that has happened on public blockchains and as a result, the data is far more extensive. This allows the individual to analyze entire blockchains and specific or multiple protocols using the single tab referenced. The individual’s imagination only limits the possibilities for analysis.

With regard to the Covalent API itself, it is a simple REST API to pull out token balances, positions and historical transaction activity across seven different blockchains. It’s the same API across blockchains; for example, it’s just one character change to move from Ethereum to Binance Smart Chain or Avalanche. As seen in the image above this is how some apps could use Covalent if they wanted to operate on multi-chains or employ a multi-chain strategy.

Covalent is the simplest solution possible for developers - no extra code needed, just one API call.

What makes Covalent Different?

​ There are many elements of the Covalent which make us unique in the marketplace. However, our core differentiators from projects like the Graph are:

  • Data availability: We are the only project to index entire blockchains fully. This means every single contract, every single wallet address, and every single transaction. ​

  • Multi-blockchain support: Multichain is in our DNA. Covalent already indexes seven different blockchain networks with many more to be announced soon.

  • No-code solution: We believe in no-code solutions for our users. One API and you are done.

Covalent Use Cases

The bulk of the use-cases are as-of-yet unknown, and we are constantly surprised at the multitude of ways developers and our partners use the data.

  • Taxes: Every single DeFi action is a taxable event and having access to this data helps firms be compliant. If a trader uses Coinbase, they can quickly download a CSV of their trade data - besides Covalent, there is no such thing for a decentralized exchange like Uniswap or 1inch.

  • Wallets: There are over 200,000 ERC20 tokens on Ethereum and this number is growing exponentially due to the composability of DeFi protocols. Wallets such as Zerion use Covalent to show real-time and historical balances, positions and portfolio value for all of their assets.

  • NFT Dashboards: Investor tools to show price trends, liquidity and ROI of collectibles. Products like NFTX and Chainguardians use these Covalent features heavily to educate their users better.

Covalent Query Token (CQT)

Having achieved product-market fit, we are now planning to execute the next phase of Covalent, which is a progressive decentralization that will enable the Covalent Network to be owned and operated by its users. Of course, a critical piece to this is CQT.

CQT has two roles. Firstly, as a governance token, where token holders will be to vote on proposals to change the system parameters such as new data sources, specific geolocations and data modelling requirements. And secondly, as a staking asset.

More information regarding CQT can be found here

Team

Covalent is built by an experienced team of data scientists and blockchain and database engineers passionate about improving and scaling blockchain technologies. Ganesh Swami, CEO and Co-founder, is a physicist by training and started his career designing algorithms for cancer drugs in the pharmaceutical space. His first company is listed on the NYSE. Levi Aul, CTO and Co-founder, built one of the first Bitcoin exchanges in Canada and was part of the team that built CouchDB at IBM.

Resources

The Covalent API

If you’re interested in finding out more about Covalent or using the API, check out the resources below to get you started:

The Covalent Alchemist Ambassador Program

We take particular pride in the ever growing and talented Covalent community. The Covalent Alchemist Ambassador Program is our way of making it an extension of the core team.

Covalent Alchemists act as key leaders in developing the Covalent ecosystem. Furthermore, just as they are invested in Covalent’s development, we are invested in their own growth of all levels to help them succeed.

If you are interested in becoming a Covalent Alchemist, please visit https://www.covalenthq.com/ambassador/

Podcasts

Ganesh Swami, Covalent CEO and Co-Founder, is a frequent guest on a number of podcasts. You can catch his most recent below.

Alpha Alarm

As Covalent indexes more and more chains beyond Ethereum, the depth of data and possibilities for cross-chain analysis enabled by the Covalent API continue to grow. Hence, AlphaAlarm was created, an initiative to showcase the depth and breadth of the Covalent API, mixed in with simplicity and speed. Every weekday at 7:00 am (PST) on the AlphaAlarm Twitter page and Telegram channel, DeFi insights and visuals are posted that are all powered by the Covalent API. These visuals showcase multi-chain analyses and deep protocol-specific insights spanning all topics from DEXs to NFTs and more.

Previous Funding

For more information on Covalent’s previous funding rounds, check out the blog posts below.

Campaigns

Covalent frequently hosts competitions/hackathons that are designed to not only reward the community but educate individuals on the Covalent API so that they themselves can get the most out of our data.

  • One Million Wallets: This campaign focuses on building custom-themed wallets and showcasing the creativity and diversity of the developer community. At Covalent, we consider this type of campaign to be “Proof-of-Education.”

  • Dungeons & Data: The purpose of the Dungeons & Data (DnD) campaign is to empower a vast community of ‘Citizen Data Scientists’, analysts and enthusiasts who can quickly and effectively analyze curated datasets with little-to-no coding and create valuable apps and case studies.

Public Sale Resources

For more information regardin the public sale taking place on CoinList, check out the playlist below as well as the FAQ provided.

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Niall Yorke

Communications, Covalent

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