Governance Proposal: Increase Max Stake for Operators
Covalent Network proposes adjusting CXT reward emissions to execute a proactive network strategy and increasing the Max Stake limit for Operators that reflect the needs of a dynamic network.
Covalent is proposing critical steps to ensure the long-term sustainability of the protocol’s security budget while maintaining the path to ~300M staked.
Q1 2025 Buybacks: US$1.4M worth of CXT Purchased from the Market
In Q1 2025, Covalent directed its revenue toward executing US$1.4 million in CXT buybacks from the open market. This move marks the beginning of a broader shift in the buyback model, reinforcing the reserve strategy that supports Covalent’s long-term vision: enabling AI Agents and LLMs with verifiable onchain data.
A quick reminder — these buybacks aren’t a one-off. They’re part of an ongoing, periodic commitment to CXT repurchases, closely tied to the health of the protocol and evolving market conditions.
Current Context
The Covalent Network behaves like a living organism—expanding and contracting as it evolves. In 2024, the network ramped up rewards through operator updates, multiplier increases, and other improvements. Now, as the Covalent Network approaches a steady state ahead of its next growth phase, it’s time to recalibrate rewards.
Tuning emissions at this stage ensures the Covalent Network stays flexible and resilient, while continuing to safeguard the fundamental incentives for staking participation.
Emissions Tuning Proposal
Covalent proposes reducing emissions to 65,753.4 CXT per Epoch (~8% APY for 300M CXT staked) to extend the security budget to potential future initiatives like the light client rewards. This adjustment reflects recent operator consolidation and supports long-term validator incentives. The APY is a floating rate, i.e., if less than 300M CXT staked, the APY will be higher.
Max Stake Increase
With a consolidation in operator count and a focus on larger firms, Covalent proposes an increase to the Max Stake for Block Specimen Producer Operators from 350,000 CXT to 550,000 CXT with the Min Stake remaining at 175,000 CXT.
Reminder: Testnet EWM Light Client Participant Airdrop Updates
Covalent is finalizing airdrop allocations for participants in the EWM Light Client testnet. This initiative recognizes the valuable contributions of early testers who helped validate the protocol’s potential light client infrastructure.
Eligible participants can expect rewards to be distributed in the second half of 2025.
Voting Process
Eligibility: All CXT token holders, including those staking, delegating, or holding CXT on Base, are eligible to vote.
How to Vote:
Navigate to the Snapshot page.
Connect your Ethereum wallet containing CXT.
Vote by signing a meta-transaction.
Quorum:
A minimum of 10M CXT voting weight is required to reach a quorum.
Duration:
Voting will be open for 3 days upon proposal launch.
