On September 22nd, we participated in our first AMA! Thank you to the Pramod Global Crypto Community for hosting us and bombarding us with questions. It was a lot of fun. Below, you can find the questions asked, along with our answers.
Q: Where does the project name come from? What does it mean for you and why did you choose that name for your project?
A: The project name “Covalent” comes from Chemistry. Covalent bonds are a special kind of bond in Chemistry – and it’s in line with our vision that we “bond” the current centralized world with the future decentralized world.
Q: What makes you feel confident about the survival and the sustainable success of Covalent in the near future?
A: As we have seen with web 2.0, data has been central to the success of many companies. People need rich data to make informed decisions. The same can be said with Web 3.0 applications. The need for rich, blockchain data is huge at the moment. This need isn’t going anywhere and Covalent is perfectly positioned to capitalize on this need given our solution.
Q: Many projects talk only about their strengths. Can you talk about the weak points that Covalent is currently dealing with?
A: Great question Jonathan. Currently, our biggest weak point is that we are dealing with scaling issues. We have had 5X the amount of API requests since August, and have been scrambling to keep up with demand, which is why we have been heads-down building for the last few months.
Q: What are your opinions on DeFi and DApps? Does Open DeFi have any contributions to make in the DeFi space?
A: Both DeFi and DApps will play an important role in moving forward. If you look at the bigger picture, both have the potential to open access to platforms and services previously not accessible to many i.e. loans in emerging markets. With regard to Open DeFi, it’s an important initiative. If we are to move forward in this space, we need cooperation between both the West and East with regard to innovation, resources, security, and so on, so forth.
Q: DeFi is one of the hottest topics in the blockchain industry. Can you share your opinion about DeFi with us? Do you think DeFi will destroy the existing financial system? What’s your project approach towards DeFi?"
A: We see DeFi as one of the leading innovations with blockchain technology at the moment, and believe that there is major disruption ahead for traditional financial institutions. Just like how the internet disrupted traditional media companies (television networks, newspapers, radio, etc.), blockchain technology promises to disrupt traditional financial institutions (banks, loan providers, etc.) and we are already seeing it happening. However, one of the crucial elements that are required is clean and historical transaction data in order for DeFi to properly deliver on the end-user experience, and that is what Covalent is here to provide.
Q: Can you talk about the funding source of the Covalent project? Who are the main investors of the project?
A: We have completed a round of funding with private investors. Remember, we have been building through the bear market and have been focused on utility and adoption. Investors haven’t been announced yet – stay tuned for updates on this front. All private investors have lockups and they are long-term believers and supporters of the project.
Q: What was your motivation to build Covalent? And what is your vision and mission now?
A: We started the project a couple of years ago because we had the foresight that transparency is crucial for this industry to reach mass adoption and fully realize the potential of crypto. That clarity and futuristic outlook gave us the strength to continue grinding through the bear market. Today, our motivation comes from all the great customers we have and to enable them to realize their visions. In the future, we foresee a future where Covalent is playing an integral part of not just crypto, but also all of the private data.
Q: What are the problems Covalent trying to solve exactly? And how will you solve this problem?
A: Blockchain data is purported to be public, but deep, granular, and historical blockchain data is actually very very difficult to access, even for a trained developer. Covalent provides a unified API for easy access to this data so that developers and companies can have true visibility into their crypto assets, whether for personal use or for their end-user experience.
Q: Covalent wants to be ‘The hub for all your Ethereum data’. Who are your target users and how do you provide value to them? Will Covalent be restricted to Ethereum data only?
A: We started with Ethereum as it is the most popular blockchain at the moment. However, Covalent plans to index ALL blockchains and provide API access to all blockchain data. This is in our product roadmap.
Q: What is Covalents staking structure of this token and how is the reward given?
A: The Covalent Query Token (CQT) staking economics is to reward validators for answering queries correctly and for meeting benchmarks. And penalties for slow queries and malicious behavior.
Q: What is the revenue model for Covalent?
A: Today, the Covalent project is a traditional Software-as-a-Service platform like Salesforce. Our customers (exchanges, wallets, custodians, DApps, etc.) pay us a recurring fee for using the API service. We will be moving that value accrual mechanism to the CQT token through progressive decentralization.
Q: Can you share the motivations and long-term benefits for investing in Covalent?
A: Covalent’s vision is to create a global & decentralized data provisioning network to serve deep blockchain data query requests. As more requests are being served, the value will accrue to the network long term. For the private round, I’ve personally grilled every single investor for long-term alignment and kicked out anyone who’s only in for a quick buck. If you’re a long-term believer in crypto, then you’ll understand that we have been working on something transformative for the space. We will sharing use-cases and our massive adoption soon.
Q: Your metamorphosis is a laudable one, how have you been able to survive this longest bear market and continue building and developing?
A: Thanks. Cannot say it’s been easy. But it has provided us with a laser focus on solving real problems, generating revenue/profits, and adoption. That’s why we have survived while most other projects had unfortunately died out. In fact, we covered this in one of our podcast episodes with Joel John.
Q: How many partners currently have trusted Covalent technology and what benefits do these partners bring to Covalent?
A: We are powering the data behind many of the top DeFi applications and wallets today. We’ll be announcing them in the coming weeks.
Q: What were the major difficulties that you faced while starting this project? And what was your motivation to continue?
A: One of the major difficulties is explaining just what the problem is. This is especially true for folks that aren’t into crypto, but even those that are into crypto, unless they are data geeks, initially don’t understand that granular and historical blockchain data is very hard to access.
Q: What critical problems do you see occurring in the blockchain industry nowadays? How does Covalent aim to solve these problems?
A: One of the biggest problems in the industry today is data accessibility. To put it simply, existing digital asset management tools fail to offer any insightful or useful information. Many use infrastructure that cannot scale while also returning data that is minimal in insight. Covalent is leveraging big data technology to aggregates information from across dozens of sources including nodes, chains, and data feeds. By doing so, we are bringing transparency and accessibility to digital asset data in an affordable manner.
Q: Tell me its 3 unique features that your competitor doesn’t have?
A: Three unique differentiators:
- Diverse use-cases: We not only have DApps as customers but also exchanges, wallets, custodians, validators, taxation, etc. Our services are broadly applicable. Other projects are small and are narrowly focussed.
- We are the only project to fully index the entire blockchain – this means every single contract, every single wallet address, and every single transaction. This is billions of rows of data and terabytes of data. Other projects only have a small subset of the available data.
- In the future, we will be indexing private data using zkProofs. This is a brand new innovation that will make our services available outside the crypto/blockchain industry.
Q: The crypto world is becoming overcrowded with blockchain projects and tokens, what makes Covalent different from other projects?
A: The only reason we have survived so far is because of our laser focus on adoption and utlity. We are not going to change this. In fact, in August we grew 500%. We’ll be sharing our success stories soon. We want to thank everyone that participated in the AMA and we will select the winners shortly. Tokens will be distributed to those who win upon listing and we will announce them via Twitter and Telegram. If you haven’t joined/followed yet, make sure you stay updated on all things Covalent! We have a lot more content coming your way, stay tuned.
Covalent provides the industry-leading Unified API bringing visibility to billions of Web3 data points. Developers use Covalent to build exciting multi-chain applications like crypto wallets, NFT galleries, and investor dashboard tools utilizing data from 32+ blockchains. Covalent is trusted by a community of 27,000+ developers and powers data for 1000+ applications including 0x, Zerion, Rainbow Wallet, Rotki, Bitski and many others.