Covalent is a multichain API for DeFi that aims to unify the presentation of data across blockchain chains. In addition to standardization, it is also about deeper and faster data presentation.
It is expected that the product will be linked to all significant DeFi projects with data indexing and exhaustive presentation in a single field and according to a single standard.
Covalent status today
Today Covalent is in the testing phase. A large-scale connection is not yet planned, but today the platform got a strong interest of a number of large projects. They provided Covalent with testing opportunities, and the innovation API partner team consists of Ethereum, Polygon (Matic), Avalanche, Binance, Fantom, Moonbeam, and RSK. The list is expected to expand qualitatively and quantitatively in the near future.
Covalent Opportunities and Value
Developers understand the importance of data security in such an ambitious project. In parallel, they are developing security standards that will help avoid data loss or unauthorized manipulation with them in a multi-chain mode of use.
The history of transactions becomes open and informative, which is important for leading DeFi projects. For example, this is an important opportunity in today’s fast-growing NFT market. The implementation of the technology will help NFT platforms display comprehensive product data for those who see purchases as a long-term investment.
If we talk about examples of application of technology for DeFi in general, then the limits of the capabilities of the Covalent API have not yet been identified. Their definition is still underway. Among the main examples, developers most often note a clear structuring of data for all types of wallets. It is applicable, for example, in the Ethereum network, where today about 20 thousand tokens of the main platform ERC-20 standard are presented.
The importance of the product for decentralized exchanges, for example, AMM projects, is also noted. The fact is that all DeFi activities are taxed, and the ease of access to data simplifies the procedures for transactions on the blockchain and allows any financial project to be transparent.
What do we end up with? All of the above means that Covalent is able to make DeFi projects faster and more transparent. The implementation of the project will make it possible to correct a number of shortcomings of modern cryptocurrencies and bring decentralized finance to a fundamentally new level of development and public perception. That is, the time when DeFi will become the generally accepted standard in the financial sector is approaching, and projects such as Covalent are actively bringing this moment closer.