Governance Proposal: Increasing the Max Multiplier to 45X to Solve Fragmented Delegation
The Covalent Network proposes increasing the Max Multiplier to 45X increasing the delegation room for CXT holders by ~30 million CXT, resolving the fragmented delegation issue and enabling broader staking participation. This measure aligns with Covalent’s vision of enhancing network scalability, decentralization, and community engagement, particularly in light of the rapid excitement from OKX staking and other community participants.
Current Challenges
The Covalent Network is experiencing a critical need to address the fragmented delegation issue. The rapid influx of new delegators has resulted in an uneven delegation landscape where many CXT holders face limited opportunities to delegate their tokens effectively leading to us falling short of the targeted total CXT staked. This problem arises due to the saturation of delegation room for some but not all validators, causing inefficiencies in staking distribution and participation.
Without intervention, this fragmentation risks undermining the economic incentives for participants and slows the onboarding of new delegators, which is vital for the network’s security and long-term growth.
Raising the max multiplier to 45X, will expand the delegation room by approximately 30 million CXT bringing the anticipated total stake to ~322 million CXT. This significant increase will address the fractured delegation room and meet the growing demand for staking opportunities. By enhancing the network’s capacity for delegations without requiring additional validators, this adjustment ensures smoother staking operations, reducing inefficiencies.
The Road to Market Equilibrium
The Ethereum Wayback Machine must one day reach emissions equilibrium to make sure the network is self-sustaining. This is Covalent’s core priority, and to do that there must be the consumption of onchain data via the GoldRush API and Covalen’t recent launching of the AI Agents SDK that can consume onchain and offchain data. Imagine an ecosystem of agents all consuming onchain data, all of this costs credits which directly translates to more onchain CXT buybacks. The more consumption the more CXT is repurchased, the closer the Ethereum Wayback Machine gets to market equilibrium with emissions being fueled by this consumption. This proposal maintains healthy participation in the network and sets the stage for these agents to directly contribute to the protocol's economic health. The live metrics showcasing the benefits of these efforts like credit consumption, can be viewed on the CXT staking metrics dashboard.
Please note that all credit consumption is paid
Summary of Proposed Changes
Deployment Proposal and Current Emission vs. Proposed Emission
Voting Process
Eligibility:
All CXT token holders, including those who are staking, delegating, and even CXT token holders on Base, are eligible to participate in the governance vote.
How to Vote:
Navigate to the Snapshot page.
Connect your Ethereum wallet.
Vote by signing a meta-transaction.
Quorum:
A minimum of 10M CXT voting weight is required to reach quorum.
Duration:
Voting will be open for 3 days upon proposal launch.
