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An Overview of How Covalent Is Structuring DeFi Data to Power Mass Adoption

18 November 2020 15:13, UTC
An Overview of How Covalent Is Structuring DeFi Data to Power Mass Adoption

Introducing Covalent

During 2020, the decentralized finance market has grown exponentially. Over $12 billion have been locked into the DeFi market, with more being added on a daily basis. Companies worldwide have expressed interest in deploying blockchain-based solutions within their day-to-day operations.

Unfortunately, the sheer size and technical complexity of the market makes it difficult to analyse blockchain-related data. In response, Covalent has built a unified API meant to enhance the transparency and visibility of blockchain networks. Adoption bottlenecks are therefore removed, and smooth transitions are assured.

This article will take readers through Covalent’s market purpose, unique capabilities, user expectations, and recent developments.

Covalent’s Market Purpose

Most market experts seem to agree that DeFi’s potential is virtually limitless. The traditional financial industry is now outdated and will soon become obsolete. As such, innovative companies are looking for friction-less solutions that ensure efficiency, security, and scalability.

Many DeFi projects seem to fit the bill. However, integration is burdensome due to a series of industry blind spots. Companies are finding it challenging to evaluate digital assets, whereas capturing a consolidated view of the market is proving downright impossible. Furthermore, integrating blockchain technology on top of the current infrastructure is often very expensive.

These challenges mostly stem from the same route cause. The blockchain market as a whole lacks an integrated approach towards ensuring transparency and visibility of digital assets. Covalent was created to bridge these gaps in hopes of encouraging adoption and fostering innovation.

Exploring Covalent’s Unique Capabilities

Covalent aims to provide its customers with a rich and robust blockchain data infrastructure. To do this, it has contracted the services of multiple data scientists, financial analysts, database engineers, and blockchain developers. Due to its differentiated approach, the startup has already partnered up with numerous prominent projects in the industry.

Here’s a brief overview of Covalent’s unique approach:

  • Emphasis is placed on enterprise-grade products.

The API has been specifically designed to support a series of enterprise-grade use case scenarios. These include, but are not limited to cryptocurrency wallets, exchanges, custodian services, and taxation systems.

  • Covalent doesn’t believe in end-product code.

API implementation is usually a cumbersome process that requires the on-going support of a code engineer. This creates additional entry barriers, so Covalent got rid of the code. Its API is a zero-config and no-code solution that can be utilized by anyone with a basic understanding of blockchain technology.

  • A DeFi SDK toolkit helps extract data from blockchains.

As expected, querying blockchain data is expensive, slow, and niche-specific. While Covalent’s API should work with most blockchain networks, the SDK was released to address use cases that are not yet directly supported.

What should enterprises expect?

Upon implementing Covalent within their current workflow, companies should expect complete access to a one-stop-shop for blockchain-related data. Here are some relevant use cases:

  • Calculate tax liabilities as a cryptocurrency-based company
  • Aggregate data across DeFi protocols as a crypto wallet provider
  • Carry out complex network analyses of hardly-accessible data structures
  • Obtain token balances and historical values for all digital assets
  • Gain access to decoded event logs
  • Compute Uniswap ROI on open positions as a liquidity provider
  • Obtain live exchange rates for supported crypto and fiat trading pairs

Decision making is also aided through the project’s extensive research reports. These studies are presented in a simple language suited for non-crypto experts who are interested in learning more about blockchain technology.

Recent Success and Developments

Covalent has queried and crawled multiple blockchain networks, thereby gathering vast amounts of data. The index currently includes details on over 25 billion transactions, 30K+ price feeds, and 200K+ smart contracts with internal data structures. With a refresh rate of just 30 seconds, the information is always fresh.

Thanks to its next-gen services, Covalent has partnered up with multiple state-of-the-art companies. These include ConsenSys, CoinGecko, Skale, Matic, CryptoSheets, Frontier, Reef, Zeroswap, Authereum, Shyft, and many others.

Not long ago, the company held an investment round where it managed to secure $3.1 million in funding. This capital will be utilized to accelerate the full-scale deployment of Covalent’s blockchain analytics services. As a response, the enterprise offering will now be available to all developers who are interested in giving it a try. Moreover, Covalent has announced that it will expand its data coverage to all of the market’s layer-1 blockchain networks and Ethereum-based sidechains. As such, clients will unlock complete access to multiple data subsets, further aiding blockchain analysis and overall market innovation.

Bottom Line

Based on everything that has been highlighted so far, fact-based decisions are quintessential to a company’s well-being. Covalent exists to fulfill the demand for crypto and blockchain data by providing its clients with enterprise-grade data querying services. In doing so, the company is directly accelerating the mainstream adoption of digital assets and blockchain technology.

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