Covalent Staking

To earn CXT staking rewards, you can run your own node or delegate tokens.

We recommend using a Ledger Hardware Wallet to control your funds fully. To delegate your tokens, you should ensure you have CXT on supported wallets such as MetaMask, Keplr, or other Web3 wallets, and follow the steps below:

Step 1: Go to the CXT Staking Dashboard and connect your wallet.

Step 2: Select the operator to stake by clicking the “Stake” button.

Step 3: Enter the amount of CXT tokens to stake and click “Approve”.

Step 4: Finalize the staking process by clicking “Stake” and confirm the transaction in your wallet.

Delegated staking offers numerous validators, and selecting the right one can be challenging. Once the provider enters our Staking Rewards Verified Staking Provider (VSP) Program, you will be able to support your decision-making process. Through this program, we thoroughly scrutinize potential workers, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

In addition, you can consider other metrics when selecting a validator to delegate to:

Commission: The commission rate is the percentage of your reward that validators keep. A high commission rate reduces your rewards, while a low rate may impact the validator's profitability and long-term viability.

Validator Self-Staked Balance: Validators with a high amount of self-staked tokens have more at stake, providing a strong incentive to maintain their services. However, note that validators can delegate to themselves from another wallet to enhance security.

Network Share: Delegating to the most popular validators can increase centralization risks. Conversely, smaller validators may face profitability challenges, potentially leading to service discontinuation. Supporting smaller validators can help decentralize the network, but requires regular monitoring to ensure they remain active.

Delegation Cap: Each Covalent producer has a maximum delegation limit. It is based on the amount of self-staked tokens. Before delegating your tokens confirm the available staking limit.

When a CXT token holder stakes their tokens with an Operator, they receive a share of the rewards earned by the Operator, proportional to the amount they have staked.

Network rewards are earned by operators who perform tasks like producing Block Specimens or re-executing blocks, with rewards determined by the amount staked and the actual work performed. During the Covalent bootstrapping phase, which lasts up to 4 years, staking rewards are supplemented through a Staking Allocation, and the reward emission rate is adjusted based on the total staked CXT to maintain profitability. Over time, the network aims to become self-sustaining, with query operators paying fees to access data, which are then distributed to production operators as rewards. Every epoch (24 hours), CXT is emitted from the reward pool to incentivize operator participation, with rewards initially fixed by Covalent until a free market for Block Specimens and Results develops.

We strive to make staking as safe and transparent as possible, however, it's important to consider factors that may influence whether a particular staking option is appropriate for you.

Smart Contract Risks: There is an inherent risk that the protocol may contain unknown bugs, which could impact not only staking but your CXT investment overall.

Unbonding Risk: When staking CXT tokens, there is a lockup period of 14 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait 14 days after initiating unbonding before they can be traded again. This is something to keep in mind when deciding to stake, as crypto markets are highly volatile.

Please note that this is not an exhaustive list of all the risks related to staking.

The Covalent Network utilizes two types of node operators, each performing a different task.

Block Specimen Producer: It securely extracts data from blockchains, creating what is known as Block Specimens - a bulk export method that ultimately leads to the generation of a canonical representation of a blockchain’s historical state. CXT token holders can delegate their assets to Block Specimen Producers.

Block Results Producer: It re-executes or processes the Block Specimens further, producing enriched data outputs called Block Results, a comprehensive representation of block data returned from an RPC call to a blockchain node, with additional fields for in-depth analysis.

The Covalent X Token (CXT) is the native currency of the Covalent Network, essential for its decentralized long-term data availability system. CXT is an ERC20 token on Ethereum and is central to securing and governing the Covalent Network. CXT serves multiple purposes: 

Staking: Operators and delegators use CXT to secure the network, with operators earning CXT rewards for validating data, indexing blockchain information, and handling queries. Token holders can also delegate to operators to earn staking rewards without running a node.

Governance: CXT holders can vote on community proposals and influence the future of the network.

Network Access: CXT is used to settle data queries within the Covalent ecosystem, making it vital for accessing network services.

Covalent has a total supply of 1,000,000,000 CXT tokens. The distribution of CXT tokens is as follows:

• Seed Round - 10%
• Private Round - 20.4%
• Private Round 2 - 2.9%
• Public Round - 3.4%
• Team - 14.4%
• Advisors - 2%
• Reserve - 18.9%
• Staking - 8%
• Ecosystem - 20%