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Proposal to Migrate the Native Token of the Covalent Network to CXT
Recorded: July 9, 2024 Duration: 0:39:51Space Recording
Full Transcription
Good morning.
Hello, hello. Good morning. Can you hear me?
Yep. Loud and clear. Perfect.
All right. Good morning, everybody. Welcome. We hope you're having an amazing day and enjoying
the week and also enjoying our brand new look. I guess, did you want to wait about like two
minutes just so more people can connect? Yeah, let's do that. Okay, perfect.
All righty.
How about you say we kick it off, Ganesh?
Let's do it.
All right.
So welcome, everybody, again.
It's been such an exciting past few weeks, as you can tell from our announcements, but
there are even more exciting days to come.
But very, very excited to have our very own co-founder, Ganesh Swami, who will be giving
us some exciting new updates.
And I can imagine that you all have some questions or want to know some more.
So let's dive straight into the first question.
So why don't we just shine a little bit of light on what is day zero of the new DAWN initiative
for those who are unfamiliar?
Absolutely.
So Covalent has been building relentlessly through bull and bear markets for many, many years
now.
And we've had some setbacks.
We've had some great pieces of news over the past few years.
And just to compress time and force attention to the community and show what we're doing,
we launched the new DAWN program, which is a sequence of announcements and moves that brings
eyes on the project.
So this included Arthur Hayes joining Covalent, a fundraise of $5 million, which was announced
about two weeks ago.
There was the migration from Moonbeam to Ethereum, which is, by all empirical evidence, very successful.
Over 22% of the supply is now staked to secure the network and so on.
And the new DAWN comes to an end with the last step, which is the token migration.
So this is the finale of the new DAWN.
So this is why it's called day zero.
But after this, we're going to have a sequence of the next steps of growth with a new token,
a new brand, new advisors, and the new funding.
So that is what this entire setup is.
Amazing.
And I can imagine there are a lot of questions about the new governance proposal announcement
that just went out yesterday.
Would you be able to tell us why is Covalent changing the token ticker from CQT to CXT?
And I've had a few questions on what does the X actually stand for?
Great question.
So the new DAWN is a bunch of bold moves to change the technical, economic, and governance structure of the Covalent network.
And what we've been able to do over the last – the token has been live about three years, right?
So the coinless sale was in 2021.
So it's about three years that the token has been live.
We've been able to do a lot, but I think we can do even more with all of these changes.
And, of course, all of this is through a governance process.
So the technical change, for example, is moving staking to Ethereum.
So there was a governance purpose for that.
The economic change is adding new block specimen producers to this sort of more room.
And another technical change was – or another economical change was increasing the max multiplier so more stake could be introduced, and so on.
And the final piece here is the new token CXT.
This is also an ERC-20 token.
There is no additional supply or anything coming down here.
But this is a one-to-one ratio.
So if you are a CQT holder, you will hold a CXT in the exact same ratio.
But the logo, the contract ticker name, and the contract address will change.
There are some additional community features in the token which are not enabled right now because all of those will have to go through a governance proposal.
And a ticker change in itself is a big change.
And the issuance of a new token or a migration token enables a couple of opportunities.
First is it enables this to position as a – enable other liquidity providers, like exchange listings and new market makers and so on.
And the unfortunate thing in the crypto space is the new and novel is where a lot of the attention is.
And sometimes you just have to put a new coat of paint, if you want to call it that, just to keep things fresh.
A lot of us on the team are finding that the colors, the brand, the voice is very reminiscent of the 2021 era.
So I think it was time for something new and just get rid of all of that fatigue.
So that is why the new token.
But fundamentally, what this means is there's a new contract address.
There is a new ticker symbol.
There is going to be a lot more, you know, liquidity provisions you're going to have in the future.
Stay tuned for that.
I'm not going to leak anything right now.
And if you hold a CQT, you will have CXT in a one-to-one ratio.
So there's no change to any of the denomination.
Now, the second question is, what does X actually mean?
So if you go back to what CQT stands for, it was covalent query token.
So covalent started as a query and indexing protocol.
So you index data and then you're able to query it using APIs or some of the other products that we've built.
And now we're expanding our scope to be X as in a wild card.
And X could be the new DA initiative that we've taken.
So the Ethereum-grade back machine, a lot of energy, a lot of focus, a lot of investment has gone into that.
We should start seeing news on that front very, very soon.
I would say in the next 45 days, X equals AI.
We're seeing a large opportunity for us to dabble down on the decentralized data initiative that we've taken.
So I've given a couple of talks, a couple of panels on this.
So that is what X stands for.
So it's an expanded scope for covalent beyond just Q, which is covalent and query token.
And X is just positioned us for as a wild card for the future.
Thanks so much for all those details.
For those that just found out about the announcement or are hearing about it for the first time on here,
is it still possible to participate in the governance vote?
Absolutely.
So the governance vote, let me talk about the mechanism here.
There were some questions I also saw from the community on what these parameters mean.
So if you go to snapshot, the link is pinned on our Twitter profile.
So there's a governance vote there, and you are able to participate if you have either CQT on your wallet or you've staked CQT.
So either works.
So you can look in the panel.
There's two strategies there.
So this is a big change that we've made just with the migration of staking,
because previously staked CQT members could not participate.
So now both cohorts of users can participate.
And the proposal went live around 3 p.m. Pacific yesterday.
And the window to vote is about 48 hours.
So the voting window will close in 48 hours.
And there's another parameter here called quorum, which is what is the minimum warning that you need for this vote to be valid?
So essentially, it's the vote turnout.
And that has been set to 10 million CQT.
And I just checked this morning, so about half an hour ago, and it had crossed 9 million CQT with a yes.
So that's very encouraging that.
And there was over 100 wallets that are voted for this.
It's very encouraging that over 100 people have voted yes for this.
And you can go look at, like, who's voted yes.
And I see and chuckle at some of the comments.
There was someone with LFG as a comment.
So kudos to that person.
Really love the energy.
So the voting is still open.
And just because it meets quorum, just because it crosses 10 million, doesn't mean that the voting is closed.
The voting closes at 3 p.m. Pacific tomorrow.
So I don't think we're even 24 hours in.
If anything, we are just 3 plus 3 plus 6.
We are just 15 hours in out of the 48-hour window.
So please vote if you hold any CQT.
You are not eligible if you buy CQT right now because it takes a snapshot of the token holders as of the block the vote was deployed.
So you cannot buy CQT or stake CQT or make any new positions after the snapshot was taken.
So if you held CQT before, please go and participate in governance.
And I've gone ahead and stuck the link to the snapshot in our comment section.
So if you visit that, you'll still be able to view a bit more of the information on it.
And I just noticed that Twitter has a little or Xspaces has a soundboard.
So I'm going to give it a go.
Okay, not the sound I was expecting.
But let's answer the bigger question that most have on mind, the exchanges.
So when will trading on centralized exchanges for CQT stop and resume with CXT?
Great question.
So I would say this has been probably the hardest thing to coordinate across all of the exchanges.
So today, CQT is listed on OKEx, Gate, KuCoin, CoinList, Crypto.com, MEXC, and BingX, and Kraken.
And when I last checked, it's been halted on a lot of the major exchanges.
So KuCoin, it's been halted.
So this is two aspects.
First is halting the deposits and the withdrawals.
And the second aspect is halting the trading.
And the reason they need to do this is because once they halt the trading,
then the user balances will not change and they can take a snapshot.
And then when CXT is available, they will just migrate CQT to CXT on their side.
So when trading resumes, then you will have CXT available at a one-to-one ratio.
So as of an hour ago, as of two hours ago, OKEx has halted deposits and trading.
KuCoin also halted deposits yesterday.
And so it's just an ongoing process here.
So just stay tuned.
And likewise, the resumption of trading and deposits will happen at the timelines that the exchanges work at.
So hopefully, within 48 hours of the governance word passing, the new token is up and running and live on these exchanges.
Oh, that's pretty incredible.
Thank you for providing information on that.
I hope that answers a lot of the questions that we've had in regards to exchanges.
But let's switch it up and talk about the migrating process.
Will this have an effect or how will this affect operators and delegators?
So this is the most beautiful part of this migration process.
There is three cohorts of users that we had to keep in mind.
And we wanted to keep the migration process as seamless as possible.
So ideally, zero action required by token holders.
And who are these three cohorts of users?
The first cohort of users are the centralized exchanges.
And I mentioned previously, the centralized exchanges will just swap out, will just migrate over the token.
And there is no action required.
Trading is just going to halt.
Deposits are going to halt.
CXT will be live.
And deposit and withdrawal will start.
And trading will start with CXT.
With the people who have staked their CQT, the underlying asset will be switched on the covalent staking contracts.
And going forward, CXT will be the thing if the governance vote passes.
What this means is that if you want to top up, or if you want to redeem your rewards, or if you want to unstake, or as an operator, you know, take out your commission, all of that is completely seamless.
There's no action required by any of the operators or the delegators.
It will be CXT going forward should the governance pass.
So that's the caveat here.
So there's zero action required.
And the third cohort of users, which, who have CQT in their wallets, let's call it naked CQT.
So it's not staked.
It's not a centralized exchange.
It's not put up as collateral or anything of that sort.
There, we will have an airdrop of CXT.
So they will get one-to-one CQT to CXT.
Okay, that's perfect.
So it's nice to know that it will be a smooth transition.
So a lot of operators and delegators can have a peace of mind.
And because security is something that we value, and I'm sure a lot of the audience does,
for holders that are wondering, will the funds remain secure during the migration from CQT to CXT?
Absolutely.
So every step along the way has gone through an audit process multiple times.
So from the staking contracts, which has had multiple audits, to the new CXT contracts, which also has three auditors.
There's Quantstamp, Hacken, and Quill audits.
And all of these audit reports are now public.
So you can just go to the Covalent docs and the security audit section and find that.
So we've taken the maximum precaution that is possible on our site.
So funds should be completely safe.
Okay, that's amazing.
And I think you already touched on this, but would you be able to answer the question again for those who just joined on,
what does one need to do to receive their CXT tokens?
So there's three cohorts of users who have access to CQT.
These are centralized exchange holders.
So your CQT is on an exchange like OKEx or Crypto.com or KuCoin or Gate or BingX or MEXE or Kraken and so on.
The second cohort of users are people who stake their CQT.
So they're owning yield.
You know, it's part of the security mechanism.
And the third cohort of users just hold it in their wallet.
And none of these guys need to do anything.
On the centralized exchange front, it's completely automatic and transparent.
So trading and deposits have halted already on a lot of the major exchanges.
Once a governance vote passes, CXT is live.
And within 48 hours of CXT going live, exchange by exchange, they will come live with CXT.
So there's zero action required.
On the staking mechanism, the underlying asset will be swapped out.
So once CXT is live, then any kind of like top up, any kind of redemption, any kind of like unstaking will be that CXT are not CQT.
And then the third set of users who have CXT in their wallet will be airdropped CXT at a one-to-one ratio.
So this is how.
So no action is required by existing token holders.
Okay, perfect.
Thank you for answering that again.
So now before we have a little bit of fun and before we dedicate the last five minutes for the audience to answer or ask any questions,
is there anything that you can leave us in suspense with, some alpha?
I know I always ask this.
Yeah, so I think I want to talk about two things here.
First is I've seen a lot of community questions around inflation and what that means.
So let me be very clear on exactly what the plans are and what this actually means.
So the supply of CQT is one billion tokens.
So you can go look on either scan and that's the supply.
There is no additional supply and it's actually not even possible to mint additional tokens.
It's frozen.
It's one billion tokens.
With CXT, the supply is also one billion tokens.
So there's no additional supply coming in.
So if you find somewhere in the community channels or on Discord or anywhere else
that there is additional supply coming in, that is completely incorrect.
In fact, on the proposal, it literally says inflation is zero percent and the supply of CXC is one billion tokens.
Now, the caveat is that the technology, the underlying contract, has the facility to mint additional tokens.
This has been turned off for this governance proposal.
So why would you want to turn on inflation?
The primary reason to turn on inflation is to support the staking rewards.
That would be the primary reason.
So at some point in the future, if there is a new staking program, I think there's some people on this call who understand what those additional programs could be.
But to fund the staking rewards there, you would have inflation so that essentially the supply is close to net zero issuance.
So whatever yield token holders are getting comes back to the stakers.
So that's what it funds.
So what that means is essentially the only people who are impacted here, broadly speaking, are people who have not staked their tokens.
So that encourages more people to participate in the network and so on and not just hold on to their tokens.
So that is a change that we would make.
Again, this will have to go through a governance proposal.
And if the community finds that this is not acceptable, then it will be voted down.
So, you know, it's up to the community.
So I want to clear that up so that there's no confusion.
And this answer is the same answer that's in the FAQ and also in the snapshot that the supply of CXC is one billion and the inflation is at zero percent.
So there's no change in those parameters and there's no additional supply coming onto the market.
The second question I want to talk about, second point I want to talk about is what's going to come after day zero.
So day zero is a start of something new.
So now you have the new dawn.
The sun's up.
What are we going to do?
So there's a whole bunch of things we've been hinting at.
Now, when the time is appropriate is realized on a bunch of factors.
I think the first thing is that we just have to get all of the exchanges ready, all of the new liquidity provisions ready.
Things like getting the new token live on CoinGecko and CoinMarketCap, DEX tools and so on.
There's just a lot of integration work that has to happen.
So we'll be working on all of that in the next couple of days.
But post that, a couple of very exciting things, including the Olympic light clients.
You know, we've hinted at this before.
So this is the opportunity for 10,000 validators to come online.
So there's a new piece of technology that we've been working on for a couple of months.
So that's pretty exciting.
And then the second thing would be something like liquid staking.
So you could stake your token on the yield as well as, you know, participate in other kinds of programs.
So that's super exciting.
There's just a whole bunch.
So stay tuned for that.
We're never going to be halting or stopping or scaling back in building because that's who we are true to our heart.
That's pretty funny.
Okay, that finally worked out and sounded like the way I wanted it to.
Okay, so let's open up the last five minutes to the audience so they can ask questions.
If you do, please drop it in the comment section.
Then I'll ask Anesh if you can actually choose three of the participating questions that you enjoyed just for a chance to win 100 CQT.
That would be amazing.
Yeah, just also a quick shout out to Appy and Daniel.
They're both on this call and they've been extremely hands-on responding to queries.
Maybe there's some confusion in the community and so on.
And they've done a fantastic job.
So I just wanted to take this platform to publicly show my gratitude and recognize the effort that's gone on behind the scenes.
Okay, now on to the questions.
Let's see.
Yeah, there's a ton of questions in the comment section.
When did you feel the need to switch to CXT?
It's a very interesting question.
I think there was some feeling, maybe last summer, there were a couple of people who were talking about this.
I think Merit Circle pivoted to Beam.
And there's been other historical facts like ETH, lend, migrate, do an Aave, for example.
And, you know, the new brand, the new vision leads to a pretty dramatic, better outcome, dramatically better outcome.
And we shied away because it's a lot of work.
You know, you have to coordinate with everyone else and so on.
And finally, I think maybe earlier this year, you know, we were doing a lot, you know, with this taking migration and so on and just felt appropriate to switch over to a new ticker and a new brand.
And the second question, strategic partnerships to expand covalence reach.
So one aspect we haven't done a good job of historically is expanding beyond the English-speaking regions.
So with the new fundraise that we announced last week or the week before, the specific focus is to expand into the APAC region.
So here we brought on Rocktree and a couple of other partners.
And I was on the ground in China, in Shanghai and Hangzhou in April to go meet community members and so on.
Also spent some time in Hong Kong.
We're going back to Singapore and Korea in September.
And so the APAC region, the translations, bringing on partners like Voo Blockchain is a critical aspect of our expansion plans.
So thank you for asking that question.
Also, we've just onboarded a new operator called Sensei Nodes who focuses on the LatAm regions.
And so you should expect a lot more Spanish language content and community members there.
So that's super exciting.
Are there additional benefits or incentives, plans for early adopters or long-term stakers in this new CXC ecosystem?
We introduced the Airdrop portal a few weeks ago.
So definitely keep an eye on that and a snapshot will be taken when the time is appropriate and those tokens will be distributed.
So this is for everyone who is staked.
It doesn't matter if it's CQT or CXC.
You know, at the end of the day, we are a data company.
So we know exactly who is staked on Moonbeam, who is staked on Ethereum, who is staked with CXC and so on.
Let me just go through a couple more questions.
I think we have some more time here.
So I'll just zip through a couple more questions, maybe like five more questions here.
Okay, perfect.
I think it's time.
How will token holders using self-hosted wallets like MetaMask receive new CXC tokens?
There is zero action that's required on your side.
If your wallet is self-hosted like MetaMask or Trust Wallet or Rabi or Ledger,
you will be airdropped CXC at a one-to-one ratio.
You might have to go into MetaMask or Rabi's settings and enable a new token.
And so by default, it hides old tokens.
What if I missed ETH migration window?
My CQT is still staked on Moonbeam.
Really good question from Roger.
I would say unstake your CQT on Moonbeam and bridge back.
And the only way to bridge back is using Wormhole.
So please do this.
Please reach out to our team for support.
Please do this in the next 24 hours.
So what does X in CXC stand for?
So X is like a wild card.
It's an expanded mission.
I talked about this on the main call.
So historically, CQTQ had been Covalent Query Token.
So now it's called Covalent X Token because we're doubling down on DA and AI.
So what does X in CXC stand for?
For those who do not participate in governance, will there be, will their CQT be frozen or lost?
There is no CQT that is frozen or lost.
So you will have access to CXC.
It's automatic.
There's no, so some of the other tokens do a swap mechanism.
So you have to go to a portal and then swap it out.
And there's a timeline for that and so on.
We're not doing any of that stuff, right?
So if you have CQT, you will get CXC.
Why is CQT CXC not listed on Bybit?
Stay tuned.
What is going to happen to the unified API?
There is no change on the unified API.
The unified API is now called the Goal Rush API.
So if you go to Goal Rush.dev, you can just continue to use that product as is.
There's been a lot of confusion over the years on, when you talk about Covalent, is it the unified API?
Because that was the Covalent unified API or the Covalent network, which is a decentralized protocol and a supply side and demand side.
So here, just to clarify everything, we just refactored the brand.
So Goal Rush includes the Goal Rush API, the Goal Rush UI toolkit, the Goal Rush SDK, the Goal Rush decoders, and so on.
And then Covalent stands for the Covalent network.
To the early rises of the new dawn, no doubt.
It's just 7 a.m. for us here.
A lot of questions.
Really great to see this community engagement.
Longzai, he's another long-standing community member from Malaysia.
I think I've done a couple of community calls with him as well.
He was demoing increment.
How do you manage liquidity on DEX?
What does the migration process look like for those who have old CQT in the DEX liquidity pool?
So it's a very interesting question.
It's a very technical question as well.
So the DEX pools, like, let's say, Uniswap or SushiSwap, are always pair-wise,
which means it will always be CQT with another pair.
And if I remember correctly, on SushiSwap, it was USDC to CQT.
So you cannot airdrop to that Sushi pool and expect support for the new token.
That's not how that contract works.
So what you have to do is twofold.
First is you will have to set up a new DEX pool.
And this time, I think we will set up a WET pool with CXT.
I think it's just better for impermanence loss if the base is another crypto asset as opposed to a stable coin.
So that's one aspect.
So it will be a brand new pool, a brand new liquidity pool, and it can be on either Uniswap V3 or Sushi or V2.
That remains to be C.
But that's essentially what's going to happen.
The second thing is if you are a liquidity provider on the existing Sushi, this is outside the Covalent system.
So you can just go to the Sushi pool and pull out the liquidity.
So pull it out, and then you'll have naked CQT on your side, and then the other pair, USDC as well.
And then you will be airdropped CXT.
I was one of the buyers of the Coinless ICO, and I'm still here.
A lot has been accomplished since then, so congrats to the whole team.
Thank you very much.
It's been a fantastic ride in the last couple of years.
In your wildest dreams, where do you see Covalent in five years' time?
What would you be role in the crypto world?
In five years' time, we will be building.
There's no question about that.
And I think there's going to be an improved emphasis on the token and the token price action and the liquidity and just how accessible the token is.
So my goal is to see this in the top 50.
I think that's ideal given all of the traction and everything else we've built.
No promises here, but that's where I'm thinking things are.
Yeah, I think that's basically it.
I've gotten through most of the questions here.
Thank you for taking the time to do that.
So that's about all the time that we have left.
If you haven't already, please read the latest blog post that we put out, which contains the frequently asked questions on some of the topics that Ganesh just covered and a lot more.
There's also going to be some galaxy tests that are available for people to take part in.
And yeah, we just ask if you want to become part of this movement and join our community.
It's still not too late.
It's a really exciting time.
And I'll also be providing the link to the blog post that contains all the facts on it in the comments section.
So don't miss out on that.
I just wanted to give a big thank you to Ganesh for his time and also our community and audience for taking the time to listen to us and for your continued support.
Any other closing thoughts you'd like to leave us with, Ganesh?
This is a very exciting time.
I think everyone who's held on, I want to express my gratitude.
And I think the road ahead is going to be, I think the growth is ahead of us.
So there's a lot more coming down the pipe.
So I'm personally very excited about everything that we're building and how the industry is trending and how critical Covalent has become over the last couple of years.
All right.
Well, we hope you guys have an amazing rest of the week.
And yeah, we'll keep you guys updated.
Keep an eye on the announcements.
And thank you guys again for everything.
Thank you, Jackie.
And thank you everyone else.
Take care.
All right.
Bye everyone.
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