Covalent’s Q2 Delegation Rewards Surge 83%, Driving New Operator Growth and Network Expansion
Vancouver, Canada, August 22nd, 2024
Covalent, a leading provider of blockchain data solutions with +230 chain integrations and billions of structured data points for dApps and long-term data availability, announced substantial growth in delegation rewards and overall profitability for Q2 2024. These achievements underscore Covalent’s strategic focus on long-term data availability and its dedication to creating value for its network participants.
The importance of structured, verifiable data has never been greater, Covalent’s mission to ensure long-term data availability, particularly in the context of Ethereum’s evolving landscape, is vital for the integrity and accessibility of blockchain history. This mission is supported by Covalent’s innovative Ethereum Wayback Machine (EWM), which preserves critical blockchain data that might otherwise be lost due to state expiry and rollup deletions introduced by Ethereum’s Dencun upgrade. Covalent is fast becoming the backbone data layer for the entire Web3 industry.
In Q2, Covalent rewarded its network operators with $990,000, reflecting an 83% increase in rewards compared to the previous quarter. This remarkable growth was driven by a 184% jump in reward emissions, showcasing the strength of Covalent’s staking model. These emissions played a crucial role in boosting operator participation and overall network health.
Long-Term Growth and Sustainability
Covalent’s delegation rewards are currently subsidized with a budget of up to 20 million CXT (previously CQT) per year. The protocol used about 10 million CQT in both 2022 and 2023, and it plans to use 24 million CXT in 2024. However, as the protocol looks towards the future, Covalent plans to transition to a revenue-sharing model by 2026. In this model, query revenue, which is currently paid in fiat, will be used to buy back CXT, directly linking network demand to operator rewards. Notably, 20% of all query revenue is already allocated to weekly CXT buybacks, which are stored in a multisig wallet for later distribution to node operators.
“Our significant growth in delegation rewards and profitability this quarter is a testament to the strength of our network and our commitment to long-term data availability,” said Ganesh Swami, CEO and Co-Founder of Covalent. “As we continue to innovate with initiatives like the Ethereum Wayback Machine and our upcoming revenue-sharing model, we are focused on providing sustained value to our network participants and ensuring the integrity of blockchain data.”
About Covalent
Covalent is the leading modular data infrastructure layer dedicated to solving major challenges in blockchain and AI, including verifiability, decentralized AI inference, and Long-Term Data Availability. Its large reservoir of structured, verifiable data enhances decentralized training and inference, reducing the risk of manipulated or biased AI models. Additionally, the Covalent Network’s Ethereum Wayback Machine ensures secure, decentralized access to Ethereum’s transaction data. Trusted by over 3,000 leading organizations, Covalent powers AI, DeFi, GameFi, and more with unfettered access to on-chain data from over 230 blockchains.
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