A guide to staking Covalent Network to earn yields

Staking is an integral part of the Covalent Network. Covalent has evolved into Web3’s most comprehensive query and indexing protocol, thanks to which staking has been instrumental. Covalent Network is committed to empowering node operators and CQT holders to secure and enhance the Web3 experience.

Why staking is important

Staking is an important part of the Covalent network. This mechanism was established to adjust the incentives and maintain the quality of operations within the network. Only node operators who meet the minimum CQT stake amount requirement (currently, 175, 000 CQT per block sample producer) are eligible to submit proofs of proper extraction of blockchain data from the indexed blockchain and receive rewards for doing so. If node operators act maliciously or dishonestly, their rewards will be cut. Node operators, on the other hand, can increase their revenue by providing valuable utilities to the network.

In addition to node operators, CQT holders who choose not to run a node can also delegate their tokens to node operators and receive rewards for helping to secure the protocol.

CQT staking data as of December 2023

Reward Distribution

Covalent Network’s initial staking yield and network rewards come from staking distributions (8% of the total supply). The allocation is intended to provide a supplement to the network reward and lasts for up to four years.

Over time, the staking smart contract will issue rewards based on the interest rate determined by the contract. This approach ensures that node operations remain profitable. The reward payout rate is measured in CQT CQT in each epoch (24 hours), which means that the staking rewards will be adjusted based on the amount of CQT staked. As a contract owner, Covalent monitors and updates the CQT issuance rate to maintain a reasonable match between the staking yield and the amount of CQT staked.

How to stake on Covalent Network

Staking on the Covalent Network is a simple and straightforward process. Here’s a quick overview:

1. Connect your wallet: First, navigate to the Covalent Network staking dashboard. You will be prompted to connect your wallet. If you haven’t connected your wallet yet, follow the instructions to connect to the Moonbeam Network through your wallet.
2. Delegate tokens to node operators: On the staking dashboard, CQT tokens can be delegated to node operators. Delegators will receive a proportional CQT reward based on their staked amount.
3. Choose a node operator: When choosing a node operator, consider factors such as commission rates and available delegations applicable to staking.
4. Staking CQT: To staking, select an operator, click on “Stake”, and specify the amount of CQT you want to delegate. The user needs to approve the contract that interacts with the wallet and confirm the transaction. Once these two operations are completed, the CQT will be officially staked.
5. Increase the amount of stake: If you wish to increase the amount of stake, you can select the “Increase Stake” option after delegating CQT. Follow the same process described above and the new stake amount will be displayed on the dashboard.
6. Redeem CQT Rewards: Rewards can be redeemed at any time with no cooling-off period. Under “My Delegators,” you can view the redeemable amount. Select “Redeem”, select the desired amount, pay the transaction fee, and receive the reward.
7. Delegated CQT staking: A cooling-off period is required to undelegated. Delegators have a cooling-off period of 28 days, while node operators go through a 6-month delegation period. During the cooling-off period after the delegate CQT is released, the amount you undelegate can be recovered.

Staking on Covalent Network not only secures the network, but also rewards you for your contributions.

This is your chance to participate in the future of Web3 with leading data infrastructure protocols. Join us.

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