Covalent Network Staking
Staking on the Covalent Network provides the opportunity to power the querying and indexing protocol of Web 3.
Staking is an essential feature of the Covalent Network. All Network Operators will have to meet the minimum staking requirement. This mechanism is in place to promote and ensure correct behavior in the Covalent Network. If Network Operators are ever malicious or dishonest, a percentage of their staked amount will be slashed. Furthermore, Network Operators stand to earn more CQT by providing utility to the network.
Beyond Network Operators, CQT holders who don't wish to run a node on the Covalent Network can delegate their tokens to Network Operators. They stand to earn yield for securing the querying and indexing protocol of Web 3.
To manage staking-related actions, you can visit Covalent Network Staking here or below. To learn how to stake on the Covalent Network, you can check out the "How to Stake on the Covalent Network” guide.
There are some further points to note with regard to delegating:
- Staking is live on Moonbeam with bridging facilitated by Wormhole.
- Only Block Specimen Producers can accept delegations.
- Delegating is non-custodial - While CQT is held in the staking contract, it is only the owner of the respective staked CQT that can interact with it.
- Staked CQT is held in escrow on the network. Consequently, staked assets are inaccessible to the token holder while they are being used to secure the network. In order to reverse this, the delegator must unstake the principle amount of CQT they staked.
Guides and Resources
Some important parameters to understand with regards to Covalent Network staking:
- Network Operators: A collection of network participants who perform various roles in the network including extracting, transforming, tracing, indexing, delegating, governing, and answering queries. Network Operators submit proofs-of-work done and receive per block-rewards on a public blockchain for honest work.
- Commission Fee: The rate each network operator charges for delegating with them
- Epoch: An epoch with regard to the Covalent Network is the period of time a Block Specimen session lasts. At the moment, an epoch lasts 24 hours. Epochs are considered in determining network reward.
- Emission rates: The amount of CQT that is rewarded per epoch.
- MaxCap Multiplier: MaxCap Multiplier is the ratio of network operator staked tokens to delegator staked tokens. For example, with a ratio of 1:10, if a Network Operator stakes 1 CQT, they are only eligible to accept 10 delegated CQT.
- Operator Max Stake: This is an upper bound set by the contract owner that limits how much an operator can stake. This is in place to prevent a minority of the operators making up a signification percentage of the staked amount.
- Deposit reward tokens: Sourced from the "Staking" allocation of CQTs total supply, these are deposited tokens that are stored in the staking contract and distributed as rewards.
- Remove reward tokens: This involves the contract owner removing tokens that have been deposited for rewards. Note, only those that haven't been awarded can be removed.
- Cooldown period: The period between when a Delegator or Validators chooses to unstake and when they can claim back their principal amount.
- Minimum stake required: The minimum amount that needs to be staked in order to become a network operator. There is no minimum amount for a delegator.
- Slashing: a mechanism to discourage operator misbehavior, where typically the operator and their delegators get slashed by losing a percentage of their stake. Currently, there is no slashing on the Covalent Network. Until slashing is live, network operators who produce Block Specimens with invalid proofs won't receive rewards.
With Covalent Network Staking, there are a number of staking parameters in place that are dynamic and can be updated. These are in place to a) prevent a small number of Network Operators making up the majority staked and b) to manage the system as its scale increases. These parameters will be periodically examined and adjusted. The parameters at launch are as follows:
|Block Specimen Producer||Rate|
|BSP Max Stake||350,000 CQT|
|Minimum Stake Requirement||175,000 CQT|
|Refiner Max Stake||70,000 CQT|
|Minimum Stake Requirement||35,000 CQT|
The initial staking yield and network rewards are supplied through the Staking allocation (view here) and this will be used to supplement network rewards for up to 4 years.
As time elapses, the staking contract will emit rewards based on a rate determined by the smart contract such that the network operations remains profitable. The reward emission rate is denominated in CQT per epoch (24 hours) which means the staking yield will change as the staked CQT changes. The CQT emission will be monitored and updated by the contract owner (Covalent) as the quantity of staked CQT grows such that a reasonable staking yield is maintained.
|CQT Contract Address||Ethereum||0xD417144312DbF50465b1C641d016962017Ef6240|
|CQT Contract Address||Moonbeam||0xBE4C130aaFf02Ee7c723351b7D8C2B6da1D22ebd|
|CQT Staking Contract Address||Moonbeam||0x8eBbA081291B908096D19f6614Df041C95fc4469|