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Covalent Query Token  


CQT Price:
$482.5 K
All Time High:
Market Cap:
$29.4 M

Circulating Supply:
Total Supply:
Max Supply:


The price of #CQT today is $0.07 USD.

The lowest CQT price for this period was $0, the highest was $0.070, and the exact current price of one CQT crypto coin is $0.07011.

The all-time high CQT coin price was $2.10.

Use our custom price calculator to see the hypothetical price of CQT with market cap of BTC or other crypto coins.


The code for Covalent Query Token crypto currency is #CQT.

Covalent Query Token is 1.2 years old.


The current market capitalization for Covalent Query Token is $29,350,293.

Covalent Query Token is ranking downwards to #386 out of all coins, by market cap (and other factors).


There is a medium daily trading volume on #CQT.

Today's 24-hour trading volume across all exchanges for Covalent Query Token is $482,542.


The circulating supply of CQT is 418,606,915 coins, which is 42% of the total coin supply.


CQT is a token on the Ethereum blockchain.


CQT is available on several crypto currency exchanges.

View #CQT trading pairs and crypto exchanges that currently support #CQT purchase.



CryptoKitties Traction Part 1/5 — Revenue Analysis

CryptoKitties Traction Part 1/5 — Revenue Analysis TLDR; We are writing a 5-part series on “10x analytics” using the CryptoKitties’ blockchain dataset. We’ve combined on-chain Ethereum transaction data with off-chain API data to deep-dive into their business model and revenue metrics behind the game. We’ve also open-sourced the SQL code behind the analysis if you want to follow along. 😍 CryptoKitties is one of the most popular games on the Ethereum blockchain. Players collect and breed kitties, which are unique digital assets. Ownership is tracked via the Ethereum blockchain and a network of smart contracts allow for buying, selling and breeding of these digital assets. Fortunately for us, the game is completely decentralized and all the player data lives on the Ethereum blockchain. The data on the blockchain is pretty disorganized, but we can use a tool like Covalent to make that data more understandable to a mere data analyst like myself.The data behind CryptoKitties CryptoKitties uses a Genetic Algorithm to create new kitties. New kitties are created in two ways:A clock periodically introduces new kitties to the blockchain. These are Generation 0 kitties and are owned by the developers. When these kitties are “minted” they are put up for auction — and the winning bid goes to the developers. In a way, this is “free money” for the developers because they were able to continuously create generation 0 kitties. The last ever generation 0 kitty was generated at the start of Dec ’18 and there are a total of 38,015 generation 0 kitties on the blockchain.Players are able to put up their kitties for a mating auction (known as a siring auction), and upon a successful bid, a new generation kitty is introduced to the blockchain. Each kitty has its own unique 256-bit unique genome code and are known as Non-fungible Tokens (NFTs) or crypto-collectibles. Date Attribute Value Jan-15–2019 Total number of Gen 0 kitties 38,015 Jan-15–2019 Total number of kitties 1,343,159There were 38,015 Gen 0 and 1,343,159 total kitties as of Jan-16–2019The CryptoKitties Business Model To understand CryptoKitties’ business model, you’ll have to understand their game mechanics. The developers behind CryptoKitties make money in three ways:Gen 0 sale — A smart contract periodically introduces new kitties to the blockchain. These “Gen 0” kitties are owned by the developers and put up for sale in an auction. When the Gen 0 kitty is successfully sold, the developer gets the bid price.Sale auction fee — Players are able to put up their kitties for sale in an auction. Upon a successful bid, a fee is charged by the developers. The Gen 0 sale is a specific instance of this game mechanic.Siring auction fee — Players are able to put up their kitties for siring in an auction so kitties from other players can mate with them. Upon a successful bid, the kitty becomes pregnant and a fee goes to the developers. Another player can help “giveBirth” and is given a reward (but that fee doesn’t go to the developers.) We’ll label these three revenue streams as: gen0_sale, sale_auction and siring_auction. As the exchange of monetary value is always done through a Dutch auction, we’ll be taking a closer look at just the successful ones. There are two ways of looking at the revenue numbers:from the context of the developers ➡ helps them build a better game that monetizes wellfrom the context of a player ➡ helps a player be more strategic with their trades We’ll study the business model using a series of questions and a corresponding analysis.Analysis 1: CryptoKitties, a Million or a Billion dollar business? The auction mechanism is the linchpin of the CryptoKitties business model. Fortunately, the CryptoKitties smart contract puts all successful auctions with the winning bid price on the blockchain. Let’s first calculate if the monies involved are in the thousands, millions or billions of dollars. Almost an eight-figures business! The marketplace game mechanics through the auction system pushed just over nine million US dollars in 2018. Ofcourse, we’ll want to dig a lot deeper to see if the volumes are growing or shrinking and if the collapse of Ethereum prices has had an adverse effect or not.Analysis 2: CryptoKitties, a growing business? We chart the money flowing through the system in both Ether (Ethereum’s native currency) as well as US dollars. The value of Ether had dropped over 80% in 2018 and that is clearly visible when we convert the Ether values to USD. It seems like they’ve had two spikes around September 2018 and November 2018 — perhaps because of a marketing push or a new product feature. Unfortunately, when converted to USD the volume is diminished due to the lower Ether prices.Correction from 0xMaki November 2018 spike was created by an exchange purchasing a huge amount of kitties for a marketing push (XS2 exchange). Here you can see their wallet proof and if you look at the kitties on the blockchain all their name have been changed to a link of their website: They own 9017 CryptoKitties. — Analysis 2a: CryptoKitties, a growing user base?. — Another way to look at a growing business is to look at the number of players. Doesn’t matter if your per-user revenue is dropping, you can still make it up in volume when your user base is growing. In fact, that’s a sign that you’ve reached the masses. We are going to be devoting an entire report on the behavior of CryptoKitties’ user base. Stay tuned!Analysis 3: What is the breakdown by CryptoKitties’ revenue streams? The next analysis deals with breaking down the auction volumes into various revenue buckets for the developers — specifically, gen0_sale, sale_auction andsiring_auction. The charts above show that the consistently around 80% of their revenue came from the generation 0 kitty sales. As generation 0 kitties are no longer created, that revenue stream has been shut off completely. My opinion is that while this is bad for the developers (i.e., they make less money), overall it’s good for the long term health of the game because:Increases urgency for the developers to improve the game mechanics beacuse that’s the only way they can increase their own revenues.Increases the scarcity of generation 0 kitties when players know that no new generation 0 kitties are going to be created.Analysis 4: How much money have the players made so far? Let’s take a page from Apple’s playbook — I like how they describe their ecosystem as “Apple has paid out $120 BILLION to developers since 2008.” The players have made (revenue, not profits) a little over 8.7 million dollars in 2018. Not bad at all!Analysis 4a: What is the distribution of payouts to the players? On the Apple App Store, it’s common knowledge that 94% of the revenue goes to the top 1% of the publishers. We see similar distributions on the Steam platform, the Facebook platform when it launched, etc. For CryptoKitties, 95% of the players make less than 1 ETH over their lifetime. On the other end of the spectrum, the “whales” (high earners who earn more than 10 Eth) make up less than 1% of the user base and that’s consistent with benchmarks across the gaming industry. We’ll be digging deeper into the behavior of these whales in a future post.Additional revenue questions We’ve only scratched the surface of the kinds of questions we can answer. Here’s more food for thought:How many Generation 0 kitties are still up for auction by developers and not claimed by other players? It would be interesting to understand if there were a decreasing demand for these kitties because the market was flooded.Now that Generation 0 kitties are no longer being created, are the volumes attributed to the auctions of kitties higher or lower? Another way of thinking about this is if your generation 0 kitty is an asset, how liquid is it?Since we know the two revenue streams, which one is more sticky and corresponds to a longer game play? What should the developers market more?Price discovery and liquidity. The matching algorithm currently is a simple Dutch auction. Can we find blocks of illiquid kitties and bundle them to make them more appealing? What is the ratio of successful auctions to auctions created and how is that trending over time. A key sign of the health of the game and the consistency of the developer’s revenue streams.Everything to do with profits. What has been the most profitable generation of kitties? Or any other genetic trait like color, etc.Everything to do with taxes. Are the players paying taxes on their gains? Are they short-term or long-term?How are these numbers looking for other localized versions (i.e., Chinese) of the game?What’s next This is part 1 of a 5 part series on analyzing CryptoKitties using the data on the blockchain. The other parts are:CryptoKitties Traction — Revenue (this post)CryptoKitties Traction — RetentionCryptoKitties Traction — ReachCryptoKitties Traction — RatiosCryptoKitties Traction — Growth OpportunitiesAppendix: The SQL Here’s the SQL code you can use as a template for your own analysis. Our product Covalent provides direct SQL and API access to Ethereum-backed assets and protocols, so you’ll need something like our tool for the underlying data. We are sharing the entire analysis on our blog. Originally published at CryptoKitties Traction Part 1/5 — Revenue Analysis was originally published in Covalent on Medium, where people are continuing the conversation by highlighting and responding to this story.

2018 annual report — first year in at Covalent

2018 annual report — first year in at CovalentCovalent gives you deep engagement insights into your dApps. The year 2018 marks our first year of operations at Covalent. Here’s a letter I shared with our stakeholders — staff, investors, partners and customers on our progress in 2018 and where we see the growth opportunities for 2019. Hey guys, Ganesh from Covalent here. As 2019 approaches, the Covalent team wishes everyone a wonderful new year! Thank you all for your continued support. The year 2018 marks our first year of operations at Covalent and we’ve seen significant growth in Covalent’s vision, technology, team and the community around us. We would like to share an update on what we’ve been up to in 2018 and where we see the opportunities for growth in 2019. We started Covalent about a year ago to bring transparency to the crypto market and to connect utility with market prices. Getting data off the blockchain is hard — our team has been heads down since day one building an indexing engine to search and categorize “deep engagement” metrics. Our long term bet was and continues to be that “prices need to be supported by utility.”“ What user behavior patterns do we see? How many users are retained over time? What share of the activity in a dApp comes from the top 10 largest addresses? How are new features being adopted by the userbase?– Covalent has the answers to a million questions about dApps’ utility. Most dApp[1] developers are familiar with transaction events like transfer – a standard part of any ERC20 token. You can look these up on Etherscan and the various blockchain explorers. The Covalent platform is able to go beyond these standard events and understand the numerous smart contract interfaces. Our indexing solution enables new analytical use-cases for “deep engagement” behavior patterns like retention, acquisition and revenue metrics. Traditional web 2.0 startups have had access to these crucial metrics for eons – we enable this for the dApp ecosystem. That’s our vision for connecting the dots between utility data and token valuation/prices.2018 was a reality check For the first three quarters of 2018, the sobering reality was that dApps have had little to no real utility. It was either all speculative action or funding activity through the ICO[2] mechanism. ICOs might have been the first “killer app” for blockchains. In appreciation of this use-case, our team had built a series of analytical dashboards to internally track ICO treasury wallets. Although Covalent’s technology has nothing to do with crypto prices or ICOs, the tumultuous year for crypto prices was tough. Bitcoin and Ethereum had lost 80% of its value since their all-time highs at the beginning of 2018. It was hard for us to not get disillusioned. It seemed like the bad news kept flowing. The ICO market had dried up. The SEC[3] was coming hard after projects that were in violation of securities laws. Bitcoin ETFs[4] were getting delayed yet again. Institutional players delaying their entry and taking a wait-and-watch stance. The bad news continued to apply downward pressure on crypto prices. Was it a negative downward spiral? Maybe. The reality was that the scaling and on-boarding infrastructure, handling of security vulnerabilities, layman’s education materials, and polish of dApps were hardly ready to handle the big influx of new users.Q4 2018 — a glimmer of hope The last quarter of 2018 started to get really interesting. All of 2018, the media seemed to be bent on reporting scams, frauds, and pump-and-dump schemes — no question — deserved. But behind the scenes, developers have been focussed on building and shipping their respective blockchain projects. Good projects hardly care about crypto prices. To our knowledge, these visionary projects haven’t slowed down their pace of development or course-corrected in any fashion. 2018 had become the year of #BUIDL[5]. Our own internal tools show that day-by-day more projects are starting to be deployed to the mainnet. Plus, there’s actual utility from users to match these deployments. Not a lot yet, but every project has to start somewhere. That’s encouraging. We definitely feel for investors and token holders who’ve lost money on their investments. Nobody likes to lose money. In a twisted way, tumbling crypto prices have cleaned up the ecosystem of people and projects who are just out to make a quick buck. The next wave of users will stick around for the real use-cases that these projects solve for.Why we are bullish for 2019 Where’s the action? The core value proposition of blockchain technology is enabling trust without unnecessary intermediaries. That enables a whole new set of use-cases that were previously untenable because of transaction costs. Finance continues to be a dominant use-case of blockchains. In 2018, the Decentralized Finance (#defi) movement has started to take shape. The idea is to change the world of finance in a similar fashion to how open source has changed the world of software. We’ve outlined some projects, protocols and use-cases that we are excited for 2019. These projects are either already on the mainnet or within weeks of deployment to the mainnet. These seven categories of projects are poised for growth in 2019 — and we’ll be extensively researching them in the coming weeks. Disclaimer: This list is by no means comprehensive and is not an endorsement of any kind.Covalent’s plan for 2019 The opportunity in front of us for 2019 is absolutely stacked. We invested 2018 in putting together the foundational pieces for our company and product. In 2019, we’ll be executing on these investments and will have more to show. Expect weekly updates! We are going to continue our work with our data partners to further understand this new decentralized world. If you want to join us on this path of discovery, we welcome you to join our mailing list or directly reach out to me. Much love, Ganesh Swami Co-Founder and CEO, CovalentAppendix: Projects we’re excited for 20191. Stable coins A stable coin is a cryptocurrency that is pegged to another stable asset like gold or the US dollar. The stability allows for practical usage of cryptocurrency like paying for everyday things. Currencies like Bitcoin and Ethereum can be highly volatile, sometimes even by 10%-20% in a single day. Stable coins can be categorized into: Stable coins are the on-ramp for regular people to use cryptocurrencies.2. Security Token Offerings Security tokens represent real-world assets like stocks, bonds, real estate, exotic cars and even fine art. These assets typically have financial value and are subject to existing laws and regulations. Therefore, these tokens are required to maintain regulatory compliance in the same fashion as securities have had to for years. The market of securities is large — trillions of dollars. Realistically, it’s going to take a couple of iterations for these securities to move to the blockchain.Security tokens bring 24/7 markets, fractional ownership, rapid settlement, reduction in direct costs, increased liquidity and market depth, automated compliance, asset interoperability, and expansion of the design space for security contracts.– Stephen McKeon, in The Security Token Thesis Our team at Covalent has been digging deep into the world of security tokens, trying to make sense of it all. It’s a complex landscape that mirrors the complexity of the public capital markets. We have an upcoming post on the various security token standards (there are dozens!) which include: Harbor, Polymath, Securitize, OpenFinance, etc. A lot of these projects are going live in Q1 2019, though the promised liquidity through exchanges and custodial solution require more time to mature.3. Crypto as property. Non-fungible Tokens. The success of CryptoKitties has showcased a big use-case of blockchain technology — games! Each kitty is represented by a token that is completely unique, non-interchangeable and tracked individually on the blockchain. There’s a whole nascent industry of games that are starting to gather steam — Gods Unchained, Blockchain Cuties, Etheremon, Decentraland, etc. More generally, the ERC721 token standard for non-fungible tokens is attempting to solve some of the authenticity verification and the ownership tracking challenges of digital assets. These assets could include artwork, certificates, or even real estate. The Loom Network’s DPoS sidechain technology is taking this thesis of NFT+Games+Blockchain and running with it. Games seem to be the gateway use-case for new technology (definitely was the case for smartphones.)4. Decentralized Exchange (DEX) Protocols As the world’s assets are becoming tokenized on public blockchains, there’s a need for a free, open-source infrastructure to purchase and trade these crypto assets. These protocols allow anybody to create their own decentralized, peer-to-peer exchange: 0x and Hydro (a fork of 0x), Bancor, Kyber, Loopring, Republic, AirSwap, etc. Stay tuned for upcoming research on decentralized exchanges.5. Derivative Protocols / Prediction Markets The size of the derivatives market on existing financial infrastructure far outstrips the market size of any other type of financial asset. It is roughly estimated to be over $1.2 quadrillion[7], or more than 10 times the total world GDP. These protocols allow you to predict the next election, short a cryptocurrency, hedge against a disaster, margin trade, write-buy-trade options in an open and transparent way with minimal risk and low fees: Augur, Gnosis, dYdX, bZx, Daxia, CDx, Market, etc.6. Debt / Lending Protocols The average person is much more familiar with the equity/stock markets, but the debt markets are much larger. For example globally, in 2017, about $2.2 trillion of new corporate bonds were issued as compared to slightly under $780.2 billion in corporate equity issuance. Despite its massive size, the debt markets are plagued with inefficiencies. The problems with the debt market today can be distilled to one or more core points: liquidity risks, barriers to interoperability between markets and regions, and a single point of failure due to the heavy concentration of players that are crucial to market operations. The decentralized debt use-case is starting to mature and these protocol are worth keeping an eye on: Compound, Dharma, Lendroid, Marble, etc.7. Decentralized Autonomous Organizations (DAOs) It would be a mistake not to include DAOs in this list — though still too early for adoption. A decentralized autonomous organization is an organization where the bylaws of the organization are encoded as a computer program (smart contract) that lives on the blockchain. Contrast this with a traditional organization is hierarchical and top-down and rules are enforced via employment contracts. Projects launched with Aragon and Colony are worth a look.Extra: Utility coins Numerous projects raised funds through the ICO process with ambitious goals — to build a censorship-free, trustless decentralized network. There’s definitely a need for the services being offered — what’s not clear is if there’s an intrinsic need for a new token. Some examples — Filecoin (raised $257 million), exchange-issued tokens like Binance and Huobi, Telegram’s GRAM, Brave’s BAT, Civic’s CVC, etc.dApp: Decentralized Application — an application that runs on a blockchain like EthereumICO: Initial Coin OfferingSEC: Securities and Exchange CommissionETF: Exchange Traded FundBUIDL: The term buidl, a misspelling of build, encourages cryptocurrency enthusiasts to focus on building new cryptocurrency projects, instead of blindly holding cryptocoins and waiting for the price to go up.Delegated Proof of StakeHow big is the derivatives market? Originally published at 2018 annual report — first year in at Covalent was originally published in Covalent on Medium, where people are continuing the conversation by highlighting and responding to this story.

Research on Decentralized File Storage and Sharing on the Blockchain

How Blockchain based platforms such as Filecoin, Siacoin, Maidsafe, Storj, and Bluzelle are disrupting the file storage space.. — In this post, we’re going to deep dive into why the decentralized file sharing and storage space matters. We’re then going to define what makes up the sector, what the end-users and markets care about, how is decentralization addressing these market needs, what is disruptive about the decentralization thesis, market sizing, and sector ranking, and an analysis of the top players on the Blockchain. Cloud file storage platforms are transformative because instead of using a local computer storage to store files and photos which at times could take up a gigabyte of space, you use third-party sellers from Dropbox, Box, Google Drive, and Microsoft One Drive. The Cloud Storage Market is estimated to grow to $74 billion by 2021 and it’s a massive space. What defines the decentralized file storage and sharing space? We define the space with two key attributes. First is the peer-to-peer nature of the service. The fact that you can rent your unused storage on a decentralized platform to offset your cost is groundbreaking. Peer-to-peer is one of the major pillars for the decentralized space. This attribute allows for increased download and upload speeds because every file being downloaded is from a number of hosts across the network. Peer-to-peer has this interesting attribute where the storage costs decrease as the number of peers in the network increases. The second key attribute is the use of data encryption. Centralized platforms offer limited data encryption which can often lead to security breaches. The key point here is that your private key used to encrypt your data is held with decentralized storage provider. Encryption plays a huge role in the excellent security and privacy that decentralized platforms have. Data files are fully encrypted and broken into shards before storing across different hosts on the network. Only the user who is uploading the data has access to it using their private encryption key. This is unparalleled data security that centralized platforms can never match. What end-users and the market care about? At Covalent, we have assessed the storage platforms according to the five critical capabilities. Decentralized storage platforms are in the nascent stage and are often not targeting enterprise use cases yet. The first need is data security. End-users care that no one except themselves have access to their files. The second need is system speed. The service needs to offer fast upload and download speeds. The third is consumers are very conscious about pricing. As more and more data is being stored, end-users care deeply about costs. The fourth key requirement is data privacy. It’s important to make the distinction between data security and data privacy.Imagine a window. There are two scenarios. First you could have metal bars that prevent objects from entering the window. That’s security, people can still look through the window and offers no privacy. Secondly, you can drape the blinds across the window that offers privacy, but no security because you can always throw something in. Therefore the combination of drapes plus metal bars offers the best privacy and security. End-users definitely care about privacy. The final point is integration. End-users care that their storage provider integrates with your existing platforms like Slack and Autodesk. — What do you think about blockchain based decentralized file storage system?. — Let us know your thoughts in comments. We publish data-backed research reports on a variety of different sectors like decentralized cloud computing, file storage, sports betting and gambling, currency exchanges, e-commerce, privacy and security and decentralized social media. Research on Decentralized File Storage and Sharing on the Blockchain was originally published in on Medium, where people are continuing the conversation by highlighting and responding to this story.

Research on Decentralized Cloud Computing on the Blockchain

How Blockchain-based platforms such as Ethereum, NEO, EOS, QTUM, and LISK are disrupting the cloud computing space.. — This post covers research and key insights into how new decentralized computing platforms are disrupting traditional cloud computing providers with better security, pricing, and transparency. In order to fully understand the topic, we’ve recorded a webinar with notes & broken the whole topic into different parts such as :Why the decentralized cloud computing space matters?What makes up the sector & what the end-users and markets care about?How is decentralization addressing these market needs?What is disruptive about the decentralization thesis, market sizing and sector ranking, and analysis of the top players on the blockchain.Finally, in conclusion, the strengths, weaknesses, opportunities, and threats that face the sector over the coming years. There are projects & platforms, which are evolving to cater to the need for decentralized computation. Some of the platforms are Ethereum, NEO, EOS, QTUM, and LISK. We’re only focused on post-ICO companies, and therefore these companies are actively trading and being used on the blockchain.Cloud Computing Platforms Why pay attention to the decentralized cloud computing space? The cloud computing market is absolutely massive because instead of using on-premise and pre-provisioned resources for computer, storage, and networking, you can use third-party servers from Amazon, Google, Microsoft, and IBM. In 60 or so years of the IT industry, cloud computing would be the third compute model. The first being centralized mainframes, and the second being client-server PCs. A third compute model is a pretty big deal. Overall, all other major technologies like smartphones, the Internet of Things, analytics, and AI rely on their connections to cloud-based data. Cloud computing is a pretty big deal.Cloud Computing Market SizeFor all of its plus points, cloud computing has one or more disadvantages. There’s a single point of failure when the provider goes offline. The ability to censor or mask content and no real economic incentive to reduce prices. Though the cloud computing market is competitive, just three companies, Amazon, Google, and Microsoft control over 90% of the market. In the decentralized version, computing platforms enable marketplaces that allow server owners to rent out their idle compute capacity. It remains to be seen if Decentralized Cloud Computing can disrupt the incumbents. What end-users of cloud computing care about?At Covalent, we’ve assessed the market needs according to 5 key factors, Cost, Elasticity, Uptime, Data Security and Standards compliance. 1st: Managing costs is an important concern as software infrastructure costs today are quite considerable. Costs saved by adopting innovative technologies can be reinvested in the business for transformative purposes. 2nd: Elasticity basically refers to the investment required to request new capabilities whether it be more storage space or new software licenses. Elastic platform reduces the delay in getting access to new capabilities and business decisions can be implemented immediately. Elasticity removes the need for planning compute needs in advance by enabling a need-based provisioning system. 3rd: Uptime- continuous uptime has a major role to play when it comes to trust and continuity in any business. All your hosted services should always be online. Uptime is really critical for businesses, any service going offline can have devastating effects. 4th: data security. However great a computation platform may be, it is pointless if it’s not complemented by exceptional security. Centralized platforms are currently meeting the needs of the world but there’s a big cybersecurity risk due to the existence of a single point of failure. Decentralized platforms overcome this as they offer excellent security through the use of smart contracts. 5th: standards compliance. A lot of investment goes into making sure the final product is standards-compliant. Cloud computing giants offer compliance tools, but they incur additional costs for every regulation or standard, thus leaving the user at a disadvantage. Users want their systems to talk to each other without having to buy additional adapters. — What do you think about blockchain-based decentralized cloud computing?. — Let us know your thoughts in the comments. We publish data-backed research reports on a variety of different sectors like decentralized cloud computing, file storage, sports betting and gambling, currency exchanges, e-commerce, privacy and security, and decentralized social media. Research on Decentralized Cloud Computing on the Blockchain was originally published in Covalent on Medium, where people are continuing the conversation by highlighting and responding to this story.

Decentralized Credit & Lending on the Blockchain

Research on Decentralized Credit & Lending on the Blockchain Crypto today is at a very interesting juncture. Without data, it’s difficult to know what to pay attention to and what to ignore. Data-backed research is key to bring a strategic vantage point. This understanding and transparency is critical for mass market adoption of Crypto. Covalent, uses a data driven research methodology based on the AUDIT method, an acronym that stands for Actionable Understandable Data-driven In-depth Timely information. We report on blockchain and cryptocurrency market trends that are unbiased, independent, best-in-class, data-backed and most importantly understandable to the layperson.Our first upcoming report is on credit & lending at blockchainCovalent Research Methodology So, credit and lending on blockchain is an option for people to raise money (or loan) without going to a bank. Crowdfunding and ICOs are example of this growing process. Blockchain lending relies on the timeless peer-to-peer model, making the entire process more seamless and short cycled. There are projects & platforms, which are evolving to cater to the credit & lending needs. Some of the platforms are Polymath, SALT, ETHLend, Ripio Credit Network, and Everex. We’re only focused on post-ICO companies, and therefore these companies are actively trading and being used on the blockchain.Credit and lending Platforms Why pay attention to the decentralized credit and lending space? The average person is much more familiar with the equity and stock markets, but the debt markets are much larger. For example, in 2017, about 2.2 trillion of new corporate bonds were issued. Compare that with slightly under $780 billion in new corporate equity. Despite its massive size, the debt markets are plagued with inefficiencies. The problems with the debt market can be distilled into one or more core points — their liquidity risks, their barriers to interoperability between markets and regions and there is a single point of failure due to their heavy concentration of players that are crucial to market operations. — Watch this on-demand webinar & download the slides. — What defines the decentralized credit and lending space? We define this sector as having four key attributes. First — Peer-to-Peer(P2P) nature of the debt market. A peer-to-peer network of lenders and borrowers diversifies the risk and also enables cross-border loans. Second — Digital Assets as collateral. In the decentralized version, a borrower can pledge their crypto assets as collateral to borrow a more accepted currency like the US dollar or Euros.Sectors Definition for Decentralized Credit & Lending Space Third — Non-traditional methods of creditworthiness. Many of the decentralized lenders have built their own in-house risk assessment technology to look at the creditworthiness of the collateral pledged for the loan. They have also developed new technology to assess the counter-party risk of the borrower combining with traditional creditworthiness scores like FICO. Fourth — Smart Contracts. A Smart Contract is like a loan agreement that contains data about the capital, collateral, maturity terms, the parties involved, the creditworthiness and what happens in the case of default. The Smart Contract runs autonomously on the blockchain without centralized servers and is the reason for the large efficiencies. If the platform demonstrates one or more of these key attributes, we define it as belonging to the decentralized credit and lending space. What end-users in the market care about? At Covalent, we have assessed the lending space according to the five C’s of finance. The 5 C’s are character, capacity, capital, collateral, and conditions. The lending space caters to two kinds of end-users, the borrowers and the lenders. To address the market needs, the five C’s have to be met in a frictionless manner to both kinds of users. How decentralization is addressing the five C’s of finance? Often times, end-users don’t really care about decentralization per se. They care more about how the platforms are fulfilling their needs. Therefore, we rate the decentralized platforms according to the five C’s. For character — excellent. Capacity — excellent. Capital — average. Since that collateral that’s placed are digital assets, they are volatile in nature. Therefore, they can only secure 60% to 70% of the value of the collateral. Collateral — excellent. Conditions — poor. How disruptive are these decentralized credit and lending platforms?Business model disruption. There are two points here. The first is that the decentralized lending space makes use of digital assets as a collateral. There’s no existing centralized player that allows you to use digital assets as a collateral. Digital assets are rapidly growing in utilisation and adoption across the world. Second, these decentralized platforms make use of the smart contracts to enable automation and have major cost savings. Thus, a bigger addressable market and cost savings are disruptive. 2. Single point of failure. In a traditional lending system, collaterals of all of the loans are held by one single entity which is risky, from a security point of view. Much of the credit crisis of 2008 can be attributed to the centralized nature of debt-backed securities. With decentralized platforms, collaterals are held by different entities, distributing the risks amongst these users. 3. Data transparency or data provenance. Data provenance can be defined as a process of tracing and recording the origins of data and its movement between databases. Transparency in the lending is of utmost importance. In 2016, a centralized learning platform called Lending Club, had its CEO borrow from online lenders to inflate the company’s volume. These loans were tied to SEC-registered securities, contained misleading information. Not exactly transparent. Another internal probe found that the company had knowing sold an investor 22 million dollars of loans that the investor did not want. 4. Censorship Centralized companies dictate both the on-boarding as well as the off-boarding of their users on the platform. Furthermore, government regulations dictate the banning of certain kinds of industries like gambling. Crypto assets enable cross-border lending that can offer many advantages to both the borrower and the lender. The opportunity to diversify their investment portfolio across different countries and even continents is one of the most prominent benefits for lenders. — Watch this on-demand webinar & download the slides. — Borrowers, on the other hand, benefit from the global pool of lenders regardless of where they live or what they’re going to use the funds for. The strength, weaknesses, opportunities, and threats that the sector has in the future. The strengths of the decentralized lending and credit space areit offers a high rate of return to lenders,it offers a competitive rate for borrowers andit has the option of having geographic diversity. The weaknessesThere’s a lack of awareness with these platforms,Some platforms are limited to one type of lending form like crypto to fiat only.Right now it can only cater to small business size credit. The opportunitiesTransparency and efficiency due to the use of smart contracts,Superior screening technology of borrowers,Digital assets especially the tokenisation of real-world assets on the blockchain are here to stay and rapidly growing. The threatsThe websites dealing with cryptocurrencies are prime targets for hacking.The crypto back collaterals can experience high volatility at times and this is a risk for the lender on the platform. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — What do you think about blockchain based decentralized credit and lending?. — Let us know in comments. Covalent works on data-backed research reports on a variety of different sectors like decentralized cloud computing, file storage, sports betting and gambling, currency exchanges, e-commerce, privacy and security and decentralized social media. Feel free to watch webinar on this complete topic & grab slides and share with us if you have any questions or comments. Decentralized Credit & Lending on the Blockchain was originally published in on Medium, where people are continuing the conversation by highlighting and responding to this story.


Covalent Pledges $25M in Funding to Bring Data Verifiability to Web3

    [PRESS RELEASE - Vancouver, Canada, 4th May 2022] Covalent, the Unified API for Web3 data, announced today the world’s first proof-based data indexer with the launch of staking on the Covalent decentralized network. Network staking via the Covalent Query Token (CQT) enables anybody from the community to contribute to governing and securing the decentralized protocol. Ganesh Swami, Covalent’s co-founder, and CEO says, “Trust, but verify has been society’s adage from time immemorial. Today that changes with Covalent’s launch of the industry’s first proof-based data middleware. By relying on math and cryptography, rather than trusted counterparties, we’re re-building the foundations of a better web.” Specifically with the staking launch, Covalent boasts open and cryptographically-secure indices with the following features: A standard data model across 32 blockchains known as the “Block Specimen” drives composability and jump-starts innovation when anyone can remix, fork, and wrap data just like any other asset. Solves the often-ignored read-scalability problems, which brings true transparency and visibility to blockchain data. A modular architecture that separates out blockchain data storage enabling a multitude of downstream use-cases. $25M in funding to early network operators who can help fast-track adoption of the decentralized network. Capturing Value via CQT The network operators will be publishing cryptographi... read More

Third-Largest Ethereum Whale Just Spent $14 Million on These 3 Altcoins

    A single crypto whale has purchased three altcoins worth over $14 million, following several earlier purchases. Whale Spends $14M on MANA, SAND, and CQT Ethereum's third-largest whale wallet, dubbed Light, embarked on another buying spree, adding three coins at a total purchase cost of $14.1 million. According to data from WhaleStats, a blockchain transaction tracker that keeps tabs on the top richest Ethereum wallet addresses and their activities, Light wallet recently purchased about 642,999 MANA, valued at $1,845,409. MANA is the native token of the Ethereum-based 3D virtual reality play-to-earn game, Decentraland, and is currently trading at $2.8 per unit. The whale also bought the native token of the blockchain-based virtual world The Sandbox, adding about 426,000 SAND worth $2,044,800 in the first purchase, and an additional 1,703,978 SAND for a whopping $8,179,094. SAND is currently trading at $4.2 per coin, at the time of reporting. Lastly, Light wallet bought about 3,090,000 CQT for $2,039,319. CQT is the native token of the Covalent Network, which provides an application programming interface suite that allows developers to pull data from several leading blockchain platforms. It is currently trading at $0.6 per coin. Not the First Time The latest purchases made by this whale wallet do not come as a surprise, considering that they previously made similar ones in the past few weeks. The Light wallet, which currently holds a total value of over $4.3 billion in dig... read More

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