Staking is an integral part of the Covalent Network, and offers an exciting opportunity to contribute to the evolution of Web3’s most integrated querying and indexing protocol. The Covalent Network has its sights set on empowering Network Operators and CQT holders to secure and enhance the Web3 experience.
Why Staking Matters
Staking is a fundamental component of the Covalent Network. This mechanism is in place to align incentives and maintain quality operations within the Network. Only Network Operators who stake the minimum required CQT (currently, 175,000 CQT per Block Specimen Producer) are eligible to submit proofs for the correct extraction of blockchain data from blockchains being indexed, and earn rewards for doing so. In the event of malicious or dishonest actions by Network Operators, their rewards are slashed. On the flip side, Network Operators can enhance their income by providing valuable utility to the network.
Beyond Network Operators, CQT holders who choose not to run a node can delegate their tokens to Network Operators and earn rewards for helping secure the protocol.
Staked CQT as of December 2023
Reward Distribution
The Covalent Network’s initial staking yield and network rewards are fueled by the Staking allocation (8% of supply). This allocation is designed to supplement network rewards for up to four years.
As time progresses, the staking smart contract will emit rewards based on a rate determined by the contract. This approach ensures that network operations remain profitable. The reward emission rate is denominated in CQT per epoch (24 hours), which means that the staking yield will adjust according to the amount of staked CQT. Covalent, as the contract owner, monitors and updates the CQT emission rate to maintain a reasonable staking yield as the quantity of staked CQT grows.
How to Stake on the Covalent Network
Staking on the Covalent Network is a straightforward process. Here’s a quick overview:
- Connect Your Wallet: To begin, navigate to the Covalent Network Staking Dashboard. You’ll be prompted to connect your wallet. If you haven’t done so already, follow the instructions to connect to the Moonbeam Network via your wallet.
- Delegating to Network Operators: On the staking dashboard, you can delegate your CQT to Network Operators. Delegators earn CQT rewards proportionate to their staked amount.
- Selecting a Network Operator: When choosing a Network Operator, consider factors like commission rates and available delegation for staking.
- Stake Your CQT: To stake, select an operator, click “stake,” and specify the amount of CQT you want to delegate. You’ll need to approve the contract interacting with your wallet and confirm the transaction. Once both actions are completed, your CQT will be officially staked.
- Top Up Your Staked Amount: If you wish to increase your stake, you can do so by selecting the “Top Up” option after delegating your CQT. Follow the same process as described above, and the new staked amount will be reflected on the dashboard.
- Redeem Your CQT Rewards: Rewards can be redeemed without a cooldown period. Under “My Delegators,” you can view the amount available to redeem. Select “Redeem,” choose the desired amount, pay the transaction fee, and receive your rewards.
- Unstaking Your Delegated CQT: Unstaking involves a cooldown period. For Delegators, this period is 28 days, while Network Operators face a 6-month unstaking period. Recovering your unstaked amount can be done during the cooldown period that follows unstaking your CQT.
Staking on the Covalent Network not only secures the network, but also allows you to earn rewards for your contributions. This is your opportunity to directly play a role in the future of Web3 with a leading data infrastructure protocol. Join us!
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