$CQT Covalent Query Token Economics | Covalent

Covalent Query Token Utility
Data for Web 3.0
Covalent is the leading interface for accessing the data of the Web 3.0 space. Currently, the Covalent API is utilized across more than a community of 10,000+ developers and 350+ active projects including 0x, CoinGecko, Zerion as well as 350+ other projects.
“Blockchains make data transparent, but by default that data is raw making it very difficult to analyze, interpret, and understand. Covalent is helping us create meaningful KPIs around Moonbeam platform usage. We are using these KPIs to understand the growth of our ecosystem and to focus our energy into the highest impact areas. Covalent’s comprehensive data set means we can iterate on and refine these KPIs as we learn more, without having to rebuild from scratch.”
Derek Yoo
CEO
Purestake / Moonbeam Network
The Covalent API is backed by terabytes of data, and regardless of industry best practices, is a candidate for a single point of failure. Covalent does not believe in the walled garden practices that we have witnessed in Web 2.0. For these reasons Covalent made the decision to decentralize the database and launch the Covalent Network.

The Covalent Network moves the platform beyond a centralized blockchain data API, enabling token holders and developers to engage with the network in new ways. Furthermore, Covalent is giving partners the ability to run replicated versions of the database, turning blockchain data into a public service good. Our ethos, ‘One API, One Billion Possibilities’ remains exactly the same, just decentralized.
CQT : The Lifeblood of the Data Middleware Layer
Over the past year, Covalent has witnessed significant traction and growth, verifying the product-market fit for the Covalent API. And this growth will continue. We have already seen the value of middleware in the traditional markets. In web3, as more layer1 and scaling solutions become available alongside a greater number of DApps, the need for a data infrastructure layer that reliably offers deep, granular, and historical blockchain data will become ever more important.
CQT Allocation
1 billion CQT was minted at the genesis and will be distributed over the course of 4 years.
Following continued traction and Covalent’s gradual shift to a decentralized model, Covalent is positioned for development and growth that is community-led. A project that will be self-sustainable. The Covalent Query Token (CQT) will be essential to this.

The Covalent Query Token is the native token of the Covalent Network. An ERC20 token, CQTs functions can be broken down into the following:
Staking & Infrastructure:
Node operators, who first have to meet the minimum staking requirement to become such, are compensated in CQT for honestly fulfilling their roles (or role) by voting, and validating data requests. Furthermore, those who wish to contribute to securing the Covalent Network but do not wish to run a node, can delegate to a validator and earn staking rewards in CQT.
Governance:
Those who hold CQT and have a vested interest in the network will be able to vote using CQT for on-chain proposals put forward by the community
CQT Operating in the Covalent Network
CQT is not a payment token, rather a means of settlement. When the network is fully operational, there will be a fee to call the API. When an API call is made, they will pay in a US denominated stablecoin such as USDC. The contract will then perform a market buy of CQT using this USDC. The CQT is then distributed to the wallets of node operators as a reward for answering the API query.
There are three primary reasons why the API mechanism is priced in USD:

- Stablecoins are the most highly adopted and liquid tokens in the web3 ecosystem.

- Enterprise customers do not want to hold a token that is susceptible to volatility on their balance sheets.

- It makes measuring the expense of using the Covalent API easier to budget.
Mechanisms Designed by Governance
There are two sides to the Covalent Network; the supply side, which is made up of indexed blockchains and their respective data as well as the demand side, which consists of the developers, analysts and multiple protocols using the Covalent API.

The mechanism in which the demand side interact with CQT is discussed above whereby a market buy of CQT will occur each time an API call is made. However, as the adoption of the network increases once live and governance becomes more prominent, it is anticipated further mechanisms will be designed and implemented. These may include using any ERC20 token to pay for an API call or paying for an API call using CQT for a reduced rate.
Staking on the Covalent Network
Your opportunity to power the Covalent Network, the interface for accessing the data of Web 3.0, is coming. In the coming months, Covalent will be launching single-sided staking as the first nodes, which are a group of whitelisted validators functioning as block specimen producers, go live.

Staking will be an essential feature of the Covalent Network. Any node operator of the network will firstly have to stake a minimum amount of $CQT in order to become one, no matter the role. This is to ensure the data being captured, provided, and queried by nodes is honest and trustworthy. If it is not, slashing of the parties staked $CQT will occur.

As a reward for servicing the network, node operators and anyone who chooses to delegate their $CQT stand to earn $CQT through the automatic on-chain issuance, or the ongoing creation of new tokens distributed to value-added actors.
AlchemistDAO
AlchemistDAO stems from the first version of the Alchemist Program and brings together a community of innovative data-nerds within the Covalent network, breaking barriers, and creating a new economy powered by data.

CQT facilitates the output of a decentralized community of analysts and developers who attract partner funding and build projects on a contract-basis. CQT not only permits access to this community, but it acts as compensation for individuals that are actively building and adding value in our ecosystem, and facilitates the governance of the DAO and Guilds.
Learn
Blockchains
To learn more about our indexing process and inquire about having your blockchain indexed to better serve your developers, DM a core team member on our Discord channel or write a proposal on the Covalent Discourse.
Analysts / Developers
Interested in learning how leading protocols are using Covalent? Check out how CoinGecko, 0x, and Zerion are using the Covalent API.
STAKING / DELEGATING
Meanwhile, if you want to learn more about the Covalent Network and the role CQT plays, check out Stake in the City.

Resources

CQT Token Economics
Audit Report
Audit Report
Contract
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