KuCoin AMA With Covalent — Unified, Scalable Access to Historical Blockchain Data

2024/03/13 03:47:04

Dear KuCoin Users,

Time: March 11, 2024, 04:00 AM - 05:22 AM (UTC)

KuCoin hosted an AMA (Ask-Me-Anything) session in the KuCoin Exchange Group, featuring the Head of Token Relations of the Covalent James Ikeguchi.

Official Website: https://www.covalenthq.com/

Whitepaper: https://www.covalenthq.com/static/documents/Covalent%20Whitepaper%20May%202022%20v1.1%20Branded.pdf

Follow Covalent on Twitter, Telegram, Youtube and Discord

Q&A from KuCoin to Covalent

Q: Could you please give a brief introduction of Covalent?

James: Covalent is the largest indexer in the Web3 space. “Indexing” refers to the practice of scraping blockchain data, structuring it, and warehousing it in a way that can be easily accessed for future consumption. Our current index is about 225 blockchains, and supply this data to developers via the "Unified API," as well as analysts via "Increment" (dashboards/analytics) and "GoldRush" (block explorer kit) products. All of these are freemium products for which the revenue flows back to the Covalent Network - our stakers and node operators that maintain these decentralized indexing operations.

To go a bit deeper, I think it's important to understand what it's like to build out a blockchain ecosystem. It's not as easy as building an amazing L1 or L2 blockchain with special properties that will drive more devs to your chain vs other chains - there are a lot of auxiliary services needed to foster a booming blockchain ecosystem…

These include:

- wallets (MetaMask, Phantom, Rainbow, etc.)

- block explorers (like Etherscan)

- bridges (like Wormhole)

- basic DeFi legos

...and the indexing is crucial for developers to quickly build applications on those blockchains

When you can provide structured blockchain data to developers and users - rather than unstructured data that requires more work for them to decipher - you drastically reduce the time to market and enable your ecosystem to scale.

That is what Covalent is the current leader in and why the largest blockchain foundations like Polygon, Avalanche, Arbitrum, Optimism, etc., all partner with us on indexing.

Q: Continuous development is critical to the success of any project. Could you please provide more information on Covalent's latest products?

James: The most recent product we launched was the GoldRush Kit, which is a modular block explorer kit that can be used by anyone on any chain Covalent indexes in order to create their own block explorer.

Today, Etherscan is known in the market as the gold standard for what a block explorer should be. What many people don’t know is that they typically charge L1s/L2s around $1,000,000 per year, and have a multi-month integration queue.

This doesn’t scale to the hundreds (potentially thousands) of L2s currently coming to market. In addition, some of these L2s are simply gaming app chains - their block explorer should look quite different than that of a generalized L2 like Arbitrum/Arbiscan.

On top of GoldRush, we continue to offer Increment, a dashboarding product that provides analytics on every metric you can think of for the 225 chains we index. We also continue improving the Unified API, both in the type of data served and in the number of chains available. This is our first and most popular product.

Q: Last year, the Covalent Network introduced the Ethereum Wayback Machine (EWM), a game-changing solution that provides ongoing access to historical blockchain data. Could you please tell us more about it and why it is a game changer for blockchain data availability?

James: It gets a bit technical, but the TLDR is that Ethereum's scaling roadmap includes a number of changes that will impact the persistence of historical blockchain data (it will go away after a short period of time). If you look at Ethereum’s roadmap with danksharding, state expiry, EIPs 4444 and 4844, we are moving into a world where Ethereum’s historical data expires, by being dropped from the nodes. This is the main reason why data availability (DA) is being discussed so much in the market.

However, if you look at the (Data Availability) DA market landscape, particularly Celestia and EigenDA, these nodes will only be holding historical Ethereum data for ~2 weeks (this is the longest that most optimistic rollup challenge windows last).

It is likely that centralized players will emerge with products that provide access to historical data beyond those 2 weeks, but if we want to keep Ethereum decentralized, we think a decentralized solution is the most pragmatic. Fortunately, the Covalent Network has been built for years to address this type of problem, and this is exactly what the EWM will solve.

Q: Covalent recently introduced the Covalent Alchemist Program. Could you please share more information about this program? Registrations are now officially closed. Is it possible to register or will there be openings to become an Alchemist in the future?

James: The Alchemist program is a gamified growth and leadership program that serves as a funnel to introduce new people to Web3. Participants complete “quests” while networking with ecosystem partners, earning CQT rewards, and learning more about Covalent and the web3 space. The emphasis of the program is overall community and industry growth.

Here are some figures about the Alchemist program to-date:

  • Over 3,000 Alchemists
  • 200+ leadership roles
  • 30+ Alchemist workshops
  • 40+ regional communities
  • 40+ career opportunities created (Covalent has even hired a few people from this program)
  • 4,000 work submissions per month
  • Onboarding ~100 Alchemists per month

The registration for the current program is closed, but there will be more openings for future programs.

Q: What were Covalent's most notable achievements in 2023?

James: So much happened in 2023 from the supply sides, demand sides, product sides, and research aspects of the protocol and our team came through the bear market so strongly. We started 2023 with 70 blockchains indexed, and finished with over 200. That was a huge achievement that shows how important Covalent’s approach to indexing is for these L1s and L2s.

We started the year with $0 in demand-side revenue, and grew this to ~$600,000 in very short order, forming incredible partnerships with many of the top dApps in the industry.

We launched the Increment and GoldRush products in 2023. Before this, our only product was a developer tool, the Unified API. This is important as we expand our structured data offerings to users beyond a more technical audience.

We did a lot of deep research in 2023 related to AI and data availability. We were able to release the EWM whitepaper, and expect to announce more tangible results of that research later this year.

And finally, we came away from difficult market conditions with even clearer conviction on the direction of the protocol.

Q: Covalent appears to have achieved a number of milestones last year. What are Covalent's goals for 2024? What's next on the Covalent roadmap?

James: There is a real possibility that we index ~1,000 blockchains by the end of this year.

This is based on the proliferation of L2s and app chains, as well as our current pace of indexing. We will be migrating our staking contract from Moonbeam to Ethereum, which will greatly simplify the staking/delegation process for network participants, remove bridge-related risks, and increase network participation from the community. On the decentralization side, we will be onboarding new node operators and looking to decentralize the role of “query node”

Finally, there is a lot to do from a market education standpoint. Covalent is more than just an indexer, and has a lot to offer the web3 space as the AI and data availability narratives gather steam. We will be focusing a lot on marketing and putting out material that explains Covalent in a simple, but educational way.

That is why we are so thankful for KuCoin's help in amplifying our message.

Q: It seems the CQT team has been hard at work. And finally can you give us a glimpse into your go-to-market plans over the coming months?

James: We are expanding liquidity across platforms and regions to support the growth of the community and bring access to the network. The name of the game here is to remove any frictions.

We are hiring to grow our core team. We recently strengthened our marketing department with two new hires as we scale into 2024, and have an open position right now in Engineering as that department grows, since we continue onboarding new chains and customers at an accelerated rate.

We are unleashing a multi-regional strategy approach through community building, product adoption and increased presence since each market can vary greatly. Since we know how important it is to be as local as possible, we are super excited about Korea, S.E Asia, Vietnam, and Greater China markets as demand for our Unified API is seeing growth.

Additionally, we are also building lots of other regional communities so that everyone can hear about us more, get information that makes sense to them in the way they need to hear it, and help us build an international protocol that takes in everyone's feedback to grow stronger.

Later on, we will be announcing new investor updates in Q2 and will be adding more strategic partnerships with investors and KOLs who understand 1) what it takes to be an infrastructure giant, and 2) the dynamics of the East & West, as we are looking at ways to improve our current staking and working on updates that we think the community will like with our staking 2.0.

Moreover, we are polishing a couple of new products too that we have listened to our customers on in terms of what they would like to see and this widens the breadth of revenue streams that the network can benefit from on a consistent basis.

We are also bringing all crypto revenue on-chain which has interesting implications for how we are compared in the market with other very well known brand names and we are eagerly waiting to be able to share with you guys what that looks like soon, but we feel that Covalent has created a really strong network effect and soon this will be reflected in public revenue numbers.

And last but not least, we have listened to feedback from our community around the world, and we hope to bring you guys additional DeFi functionality that will let the community participate in the network in unique and interesting ways; thinking this too can create its own flywheel of activity as community participants, node operators, and stakers, and the broader community get to dynamically interact with CQT.

Q: You mentioned the network a lot, how do you think it is best to think about Covalent not just in Web3 but in different use cases?

James: Great question. There are numerous use cases; anything requiring blockchain data can utilize the Covalent product suite.

Some areas that CQT is doubling down on are in the areas of AI, Data Availability, GameFi and Governance… to do all these things really well, you need an immense amount of historical and real-time data that is quality controlled, structured and then productized for easy use by the end customer… We are Big Data for Big Models & Computation that lets you understand the majority of all on-chain activity data that has existed in crypto since the beginning

Finally, I know we're coming up on time @RaMi_KuCoin so I just wanted to mention a couple special pieces of alpha for the KuCoin community:

Covalent recently surpassed 130 million wallets across +225 chains that are enriched by Covalent Data .. this is major and will continue to increase as we add more chains to the network. We’re on a mission to hit 1,000 chains by the end of the year and will bring Covalent to tens of millions of more wallets. We also will be making available retroactive Airdrops for our network stakers.

Once you stake, your address will become eligible for retroactive airdrops. This means the CQT community also gets access to other communities we index such as Scroll, Taiko, Cross Finance, Movement, and many more projects, as we are constantly bringing more and more chains and applications onto our TestNet, and have another 15 waiting to come onto MainNet really soon with a good portion of them considering retroactive Airdrops.

And I’ll leave you with this: “We want our international community to grow and have decided to bring revenue-sharing aspects to network participants

Revenue generated from customers which include the likes of top-tier businesses like Fidelity, Rainbow, Paraswap, Wormhole we will be using the revenue to institute a CQT buy-back program from the market, meaning supply will be taken out of the market. This is really exciting and all part of our plans to make the Covalent network and community as robust as possible in 2024.

Make sure to stay up to date by following our Twitter account here.

Free-Ask from the KuCoin Community to Covalent

Q: What are your main features that distinguish you from other projects and what competitive advantages do you have? Since Your project is new in the market, one with a lot of experience, can you tell us what is your best advantage, strongest motivation, and biggest challenge?

James: Hi Rams, good question. Covalent has actually been live since 2021, and building since 2018

One of the main distinguishing features of Covalent is the way that it indexes data. Covalent follows an "ELT" methodology (Extract, Load, Transform) rather than "ETL" as many other indexers do

This means that reorgs and other upstream changes to the blockchain can result in broken "subgraphs"

Instead, Covalent transforms data on the edges, allowing it to scale much more efficiently

Q: People always check about safety and security from any project because of the many hacking issues right now. I would like to know how safe your project is? How can you make sure that you are secure?

James: Security is our top priority. You can view all of our audit reports here.

Q: What are the top priorities according to the roadmap? Does the team have sufficient funds and a strong community to achieve these milestones?

James: Yes, the team has plenty of runway to attack its goals, and one of the deepest communities in crypto period (particularly amongst builders)

The top priorities at the moment are probably staking 2.0 and the Ethereum Wayback Machine, as one will remove frictions from staking and increase network participation (and thus remove token supply from the market), and the other is directly addressing a major need as detailed by the Ethereum roadmap

Q: Do you have tutorial videos so we can get to know your project more clearly or do you have a YouTube channel or something? Can you share it with us?

James: We do have a fairly active YouTube channel here. There are tutorials, podcasts, and other content from the team

Q: What upcoming developments or partnerships do you believe will have the most significant impact on Covalent(CQT) ecosystem and utility in the near future?

James: I believe staking 2.0 and retroactive airdrops will have a profound impact on the community

Staking 2.0 will really make it much easier to stake your CQT, and in doing so, be able to benefit from retroactive airdrops to all CQT stakers.

KuCoin Post AMA Activity — Covalent

🎁 Participate in the Covalent AMA quiz now for a chance to win 26.160 CQT!

The form will remain open for five days from publishing this AMA recap.

Covalent AMA - CQT Giveaway Section

KuCoin and Covalent have prepared a total of 5,225 CQT to give away to AMA participants.

1. Pre-AMA activity: 2,093.25 CQT

2. Free-ask section: 130 CQT

3. Flash mini-game: 1,040 CQT

4. Post-AMA quiz: 1,962 CQT

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