Introduction of Covalent

Data on the public blockchain is accessible and available to everyone. However, the returned data is just in the encrypted raw form that is only understandable once collected and decoded using tools like Web3.js, Ether.js, etc. In this case, users need technical knowledge, which is time-consuming and effort-taking.

To resolve these issues, Covalent has developed a decentralized blockchain data infrastructure that allows users to access blockchain data from nearly 40 supported blockchains through a general API.

In this article, we will dig deep into Covalent and find out what makes it different in the marketplace.

What is Covalent?

Covalent is a decentralized data infrastructure that enables users to access blockchain data. By fully indexing entire blockchains and transforming these data into a standardized format, Covalent provides the API bringing visibility to billions of Web3 data points accurately and reliably. Users can access almost any data on a given blockchain by using a uniform API. Thus, Covalent makes it easier for developers to gain a more complete, timely, and accurate overview of the full blockchain ecosystem.

Covalent aggregates data from nearly 40 supported blockchains, including Ethereum, Polygon, Avalanche, etc. (click here for more details), and allows participants to access these data points for a variety of use cases. Developers can use Covalent to fetch blockchain data such as block data, transactions, log events, state transitions, trace events, etc., and then build various multi-chain applications like crypto wallets, NFT galleries, and investor dashboards tools.

A list of blockchains supported by Covalent, including Ethereum, Polygon, Avalanche, Binance, etc. — Blockchains Supported in Covalent. Source: covalenthq.com

Found in 2017 by Ganesh Swami and Levi Aul established, Covalent soon secured more than $5 million throughout two fundraising rounds (Alameda Research, CoinGecko, and Hashed Ventures are just a few of the investors in the first place). Moreover, Covalent is recognized by a community of over 35,000 developers and more than 3,000 applications, including 0x, Zerion, Rainbow Wallet, Rotki, Bitski, and several others.

A list of projects using Covalent API, including DappRadar, AAVE, Rotki, etc. — Projects building and succeeding with Covalent API. Source: covalenthq.com

The Different roles in the Network

Covalent works based on community ownership and has multiple supply sides, including both the data from the blockchain and the network operators. While blockchain serves as a source of enriched data, the operator team is considered the main workforce that brings efficiency to the Covalent Network.

A network model of Covalent including the Governance, Delegators, Operators and other components — Covalent Network. *Source: covalenthq.com*

To become a covalent operator, users first need to stake the minimum requirement - which is at least 175000 CQT (according to Covalent's docs). Currently, the Covalent Network only supports user registrations with the Block Specimen Provider role.

There are four main operator roles in Covalent, including three technical positions and a non-technical one.

The working pipeline of Covalent Network. Source: covalenthq.com

Block Specimen Provider (BSP)

Block Specimen provider runs an archive node with a Covalent extract-and-normalize worker patch (Geth and Erigon) to extract raw data from the blockchain and cryptographically prove the truth of work. The BSP will consume blocks from the external blockchain and create block specimens. That block specimen is then uploaded to a storage instance. Finally, BSP will publish a production proof (which is the hash of the BS in storage) to the Network so that other nodes can access it to validate the proof.

Indexer

Since the block data in the block specimen in the storage instance remains unorganized, the Indexer is responsible for transforming it into a queryable schema. Indexers will pull this data and convert it into a Block Result. Similar to the BSP, Indexer will publish proof to validate this work.

Query operator

After the data extracting and indexing stage, the Query operator will load data from the storage instance to its local warehouse, preparing for the response to user API queries. A noticeable point of this role is that the Query operator has to pay for those previous tasks done by BSP and Indexer. The fund depends on how much data the query operators have pulled from the Network.

Delegator

Delegator is the only role that does not require either technical knowledge or specialized hardware to perform tasks. Any user who wishes to contribute to securing the Network but does not intend to run node infrastructure can delegate to a validator and earn a stake reward in CQT.

Covalent API

As a data management service provider, Covalent offers an API that exposes billions of data points across multiple blockchains. In other words, Covalent allows users to pull detailed, granular, and historical transaction data from various blockchains through one API. With this Covalent approach, anytime data is requested, it is returned quickly and uniformly without the need for specialized hardware or any large stores of memory.

The Covalent API is RESTful and provides some powerful endpoints to get information from multiple blockchain networks. There are three main classes of endpoints, which are: Class A, Class B, and Pricing class

Class A

This endpoint returns enriched data (including balances, transactions, log events, etc.) to all blockchain networks.

With the class A endpoints, you can get:

Historical portfolio value over time
Transaction details ERC20 token transfers
A block
Block heights
Log events (by contract address and by topic hash(es)
NFT token balances
External NFT metadata
NFT token IDs, transactions
Changes in token holders between two block heights
Token holders as of a block height
All contract metadata
A transaction
All chains and all chain statuses.

Class B

This endpoint is used for a specific protocol on a blockchain. For example, AAVE is Ethereum-Polygon only and does not apply to other blockchain networks.

The class B endpoints provide:

Exchange liquidity transactions of an address for a specific protocol.
Exchange balances of an address for a specific protocol.
Address balances for a particular protocol.
Address activities for a particular protocol, etc.

Pricing endpoint

The pricing endpoint is the latest endpoint released by Covalent (sometimes, it is considered a class C endpoint). This endpoint will return historical prices for contract addresses in a particular Chain_ID and quote currency.

For more information about Covalent API, access this link.

What makes Covalent different?

Essentially, you can extract detailed, historical, and granular blockchain data from various blockchains using Covalent's general API without writing any code. Covalent enables developers to significantly reduce the time, expense, and complexity of building blockchain applications.

The following are a few factors that distinguish Covalent in the marketplace and make developers prefer it.

Firstly, the Covalent is the only project to fully index the blockchains. This indicates that Covalent maintains full archive nodes and creates an exact copy of every contract, wallet, transaction, and more in the Covalent database. Regardless of the blockchain source, this indexed data is normalized into a data model that Covalent referred to as "block specimens."

With terabytes of data and billions of rows of data saved in the Covalent database, the Block Specimen is a depiction of a blockchain's complete historical state. Each Block Specimen has its own proof to guarantee the accuracy and security of the data it provides. These proofs are published to the Covalent proof chain and are comparable. Therefore, any data discrepancies, whether purposeful or unintentional, will have inconsistent proof. The Block Specimen will be crucial in enabling users of Covalent's API to effectively query data from various networks thanks to its extensive storing and quick retrieval of historical data.

Additionally, Covalent already indexes a variety of blockchain networks, and many more will soon be released. The same API works across roughly 40 supported blockchains and hundreds of use cases, including crypto-wallets, NFT galleries, investor dashboard tools, and DAO tooling.

Moreover, Covalent provides a "no-code" option, meaning no specialist, expensive developers, or complicated queries to access specific blockchain data consumers. One API is all you need. Developers can make all modifications without writing a single line of code while constructing their applications.

In contrast to Covalent, the Graph provides an indexing protocol to query networks. Data is easily accessible using open APIs, also referred to as subgraphs, which are produced and published by anyone. The Graph has more customization when you can specify the blockchain data you want and the output data format based on each Dapp. However, you need to pay for a graph maker, while Covalent provides the API key completely free. The Graph uses the query language GraphQL instead of the RESTFUL API Covalent offers, so it will be harder for someone unfamiliar with APIs or GraphQL.

We already have an article that analyzes and gives some general information regarding The Graph here if you want more details.

Conclusion

Covalent is a very helpful tool to handle and make sense of public blockchain data in considering the rapid expansion and development of decentralized architecture and the increasing requirements for blockchain data. It is already integrated with several Defi projects and has a wide range of uses, which creates more value and makes blockchain better.