Overview of CXT

At the core of the Covalent ecosystem is the Covalent X Token (CXT), which is integral to the decentralized long-term data availability network. CXT is the native token of the network wherein all settlements are denominated in this currency. CXT’s functions can be broadly broken down into the following:

• Staking: Operators, who first have to meet the minimum staking requirement to become such, are compensated in CXT for honestly fulfilling their roles (or role), and performing work on the network like validating data requests, indexing blockchain data, and responding to queries. Furthermore, token holders who wish to contribute to securing the network but don’t wish to run node infrastructure, can delegate to a Network Operator and earn staking rewards in CXT.

• Governance: Those who hold CXT and have a vested interest in the network will be able to vote using CXT for on-chain proposals put forward by the community.

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Contract addresses

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Using your CXT

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CXT operating on the Covalent Network

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Infrastructure Currency

CXT is not a payment token, rather a means of settlement (settlement will take place on MoonBeam). In the future, when an individual makes a call for the API, they will pay in a US denominated stablecoin such as USDC. The contract will then perform a market buy of CXT using this USDC, driving demand for the token. The CXT is then distributed to the wallets of nodes as a reward for answering the API query.

1. The application/developer loads their deposit account with stablecoin assets into the network smart contract.
2. The application queries the Covalent API.
3. A check is made to verify that there are sufficient funds in the deposit account before sending the respective query request to operators.
4. The query is sent to the Query operator to fulfill the request.
5. The desired data is sent back to the application.
6. An entry is made on the Moonbeam ledger regarding the data that is being consumed, and which operator(s) are fulfilling the request and their cost.
7. The balances between the network contract, CXT and the work performed are reconciled.
8. The USD funds are drawn down from the developer’s deposit account and swapped for CXT via a market buy mechanism and settled against a validator’s outstanding balance.

The reason for implementing a stablecoin mechanism is that:

• Stablecoins are the most highly adopted tokens in the web3 ecosystem.
• Enterprise customers don’t 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 for users.
• The greater number of API queries, the greater the demand and buy pressure for CXT that exists on the Covalent Network.

The greater number of API queries, the greater the demand and buy pressure for CXT that exists on the Covalent Network.

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Staking

Staking is an essential feature of the Covalent Network. All Network Operators have to meet the minimum staking requirement. This mechanism is in place to promote and ensure correct behaviour in the Covalent Network. If Network Operators are ever malicious or dishonest, a percentage of their staked amount will be slashed. Furthermore, Network Operators stand to earn more CXT by providing utility to the network. More information on Covalent Network staking can be found here.

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Audits

• Current Audit and Security Reports