Covalent: Revolutionizing Blockchain Data Access with AI and Web3 Solutions

As blockchain technology advances, the demand for accessible and dependable data solutions for developers, users, and organizations has grown significantly. However, navigating blockchain data and effectively utilizing the right tools remains challenging. Making informed choices often requires a strong technical background and substantial resources. Covalent Network, a modular data infrastructure designed to support AI and blockchain ecosystems, addresses these hurdles.

Covalent offers a robust, modular platform aggregating and organizing data from various blockchain sources. With an extensive database containing over 100 billion rows of structured data spanning more than 100 blockchains, the project is well-positioned to enable the creation of decentralized applications and AI-powered innovations.

This month’s analysis will examine Covalent’s latest product updates, tokenomics, the founding team’s vision, fundraising efforts, and the plans outlined in its future roadmap.

Exploring Covalent: AI, API, and Data Analytics

Covalent Network is moving forward by decentralizing its protocol, aiming to establish a self-sustaining, community-governed platform. This versatile platform, designed to index and store blockchain data across multiple network touchpoints, enables users to access this information seamlessly through its GoldRush API (formerly the Unified API).

Key features of the Covalent Network include:

• Compatibility with industry-standard data tools

• Support for multiple blockchain networks

• Optimized storage and efficient network utilization

• Low resource requirements, allowing deployment on both commercial and retail infrastructures

Central to Covalent’s design is a strong emphasis on data verifiability, achieved through cryptographic proofs. Every operation executed on the network generates a corresponding proof, ensuring that Network Operators maintain transparency and deliver accurate data. This approach positions Covalent as a pioneer among data middleware protocols, as it was one of the first to incorporate a proof-based verification system.

Products Powered by Covalent

Covalent drives innovative products that simplify and enhance blockchain development and data analysis. These include:

1. GoldRush API: A comprehensive toolkit designed to streamline Web3 development across more than 200 blockchains. The GoldRush API offers developers structured on-chain data through various resources, including robust software development kits (SDKs), application programming interfaces (APIs), user interface kits, decoders, and templates. This simplifies the process of building decentralized applications and services.

2. Increment Data Analytics: Increment delivers a powerful solution for querying and visualizing complete historical data from over 100 blockchains. Covering every smart contract, event, transaction, and block, Increment leverages Covalent’s infrastructure to bring SQL-based analytics into the Web3 ecosystem, enabling users to extract actionable insights from blockchain data efficiently.

Covalent’s Milestones and Reach: Since its launch, Covalent has achieved several significant milestones:

• Establishing a global network of over 30 professional operator sets.

• Attracting more than 70,000 developers to leverage its tools and infrastructure.

• Fully replicating over 100 blockchains, including major networks like Ethereum, BNB Chain, Polygon, Avalanche, Arbitrum, and Base.

Covalent’s solutions are trusted by leading companies and organizations, including EY, ConsenSys, THOR Wallet, Atomic Wallet, and more.

Recent Launch: AI Agent SDK

In early 2024, Covalent underwent a significant rebranding and introduced a series of strategic upgrades to enhance its AI capabilities, solidifying its position as a leader in data accessibility. A standout among these innovations is the AI Agent SDK—a comprehensive toolkit designed to simplify the development of intelligent, context-aware agents with exceptional ease and functionality.

The AI Agent SDK provides seamless access to both on-chain and off-chain data, including private datasets, enabling developers to build more advanced and sophisticated applications. By offering built-in blockchain data access alongside seamless blockchain interactions, this solution addresses a critical gap in the market, delivering a scalable, all-in-one package tailored to the evolving needs of decentralized applications.

Addressing Industry Challenges

Traditional AI agent tools often have limited access to essential data, leading to inefficiencies and potential security vulnerabilities. Covalent’s AI Agent SDK overcomes these limitations by integrating direct access to on-chain data and plans to extend support to off-chain and private data. This integration empowers developers to build agents capable of:

• Interacting directly with smart contracts and blockchain protocols.

• Verifying and executing transactions autonomously, reducing reliance on intermediaries.

• Accessing both real-time and historical blockchain data for up-to-date, informed operations.

• Enabling secure and transparent agent-to-agent interactions, unlocking new possibilities for decentralized applications.

A New Standard for Decentralized Applications

With the AI Agent SDK, Covalent is revolutionizing how decentralized applications are designed and deployed. By bridging critical data access and functionality gaps, this innovation sets a new benchmark for AI-powered tools in the blockchain space, empowering developers to build the next generation of decentralized solutions.

Token Economy

At the core of the Covalent ecosystem is the Covalent X Token (CXT), which serves as a vital component in powering the network. Within just four months, CXT has facilitated over 22 billion paid API queries, driving a 15% month-over-month revenue growth. This strong performance positions Covalent to surpass $1 million in annual recurring protocol revenue, with notable customers such as Ondo Finance, THORChain, and members of Aave’s ecosystem.

CXT’s utility focuses on two primary areas: staking and governance. To become a Network Operator, participants must meet a minimum staking requirement. In return, they earn CXT by validating data requests, indexing blockchain data, and responding to queries. Token holders who do not operate nodes can delegate their tokens to a Network Operator to contribute to network security and earn staking rewards. For governance, CXT holders can vote on on-chain proposals submitted by the community, ensuring those invested in the ecosystem play an active role in its development.

Covalent recently announced a strategic partnership with OKX, enabling high-yield CXT staking on the OKX platform. Additionally, OKX has begun operating as a Block Specimen Producer for the Ethereum Wayback Machine (EWM) infrastructure, marking a significant milestone in decentralized operations.

Team

Covalent was co-founded by Ganesh Swami and Levi Au, bringing together a wealth of expertise in finance, blockchain, data analytics, and distributed systems. The team, now comprising 30 members, operates primarily out of Vancouver, BC, Canada, reflecting a diverse skill set and a shared commitment to advancing blockchain technology.

Fundraising

Covalent has secured $16 million through six funding rounds, with the latest round concluded on June 26, 2024. The company has garnered support from renowned investors such as Binance, 1kx, Coinbase Ventures, Woodstock, Maelstrom, RockTree Capital, and Hashed, underscoring its strong position in the blockchain ecosystem.

What's Next

As we move into the first quarter of 2025, Covalent is gearing up to introduce significant advancements in its AI agent technology, reinforcing its role as a premier infrastructure solution in the blockchain industry. The release of the AI Agent SDK marks the start of a broader initiative to empower developers and shape the future of decentralized systems.

Having processed over 22 billion paid API queries and driven adoption through high-profile integrations, Covalent is laying the groundwork for a sustainable ecosystem where CXT drives data-powered innovation. These developments will establish Covalent as the foundation for scalable, intelligent, and decentralized solutions in AI throughout 2025 and beyond.