Covalent (CQT): Build a new on-chain protocol revenue system and commit to financial transparency

In the vibrant world of blockchain and decentralized technology, Covalent Network (CQT) is reshaping the on-chain economic system through its innovative protocol revenue model. Unlike traditional financial systems, this feature brings unparalleled accessibility, eliminating intermediaries and giving the community direct access to granular blockchain data.

Covalent’s value accumulation mechanism

At the core level, Covalent Network (CQT) plays a dual role. It is both a decentralized physical infrastructure and a middleware project. Promote the connection between the supply and demand sides of data on the chain. Analogous to well-known platforms such as Uber, Covalent connects query operators (supply side) with applications (demand side) and differentiates itself from traditional financial structures by extracting revenue at a certain rate as a way to accumulate protocol revenue. Come on.

For the foreseeable future, Covalent Network (CQT) will rely entirely on the Ethereum network and exclusively use $ETH tokens for network fees. Through its Ethereum Wayback Machine (EWM), an innovative solution designed to secure access to historical blockchain data, Covalent Network (CQT) ensures decentralization and avoids dependence on centralized entities. This strategic move not only solidifies the integration of the Covalent Network (CQT) system, but also actively strengthens Covalent Network (CQT)’s commitment to the Ethereum ecosystem by cultivating a symbiotic relationship, not only for the Covalent Network (CQT) system as a whole improvement, and is also expected to promote the broader development of the Ethereum network.

How does it work?

Covalent Network (CQT) uses $CQT as the governance and staking token. Operators participate in network operations by pledging tokens, and their work shares will be distributed according to their pledge ratio, while the income generated by demand parties entering the network through the protocol will be distributed to operators through a new profit sharing mechanism.

The main value accumulation mechanism process is as follows:

1. The application directly queries the blockchain data API by interacting with the smart contract on the chain, and pays with stable currency.
2. Pricing for APIs is determined by the carrier network.
3. Stablecoins are converted to $CQT through the market buyback mechanism.
4. $CQT is staked by the network operator as a security guarantee of its honest behavior.
5. Earned $CQT are allocated to operators based on work completed.
6. Operators sell a portion of the $CQT earned to pay for operating expenses, which again flows back into the ecosystem’s economy.

Convert demand into token value driver

It is worth noting that the demand side in Covalent Network (CQT) prices demand in US dollars or fiat currencies, ensuring Predictability of consumer bills under a variety of circumstances. Covalent Network (CQT) uses USD as the basis for collecting revenue, which is converted into $CQT (Covalent’s native token) through regular market purchases. $CQT is then distributed to validators as a network utility token, flowing back into the ecosystem and sustaining the operation of the network.

Covalent Network (CQT) provides fair compensation for those who actively participate in network operations, while the value accumulation of traditional models often favors passive stakeholders with limited or no direct participation in ecological construction. Obviously, Covalent Network (CQT) is fundamentally different from traditional economic models.

Q&A

Q: What is the difference between the decentralized model of Covalent Network (CQT) and the centralized model?

A: In the centralized model, passive token holders do not need to actively participate to benefit. The difference between Covalent and the centralized model is that its decentralized structure ensures that token holders are based on They are rewarded for their active contributions such as staking or running a validator node. This emphasizes active participation and establishes a fair and incentivized distribution model to ensure that the system operates efficiently in a decentralized manner.

Q: What is unique about Covalent Network (CQT) in terms of instant protocol revenue accumulation?

A: The more API calls made in the network, the more revenue is generated. By leveraging token incentives, costs will be reduced for users and long-term data availability will be transformed into a public benefit.

Q: Can you explain the current revenue accumulation method of Covalent Network (CQT) and the expected changes?

A: Currently, revenue accrual involves two steps: the demand side pays the protocol in USD as an API consumer, and converts it into $CQT tokens and distributes them to validators. As more validators join, our long-term goal is to build a more straightforward process that reduces reliance on centralized methods and builds larger decentralized systems over time.

About Covalent Network (CQT)

Covalent (CQT) focuses on blockchain data availability and supports millions of users to build a new economy. Since its establishment, Covalent has continued to help developers and analysts It provides comprehensive and real-time data on more than 200 chains.

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