An excellent infrastructure idea that streamlines the interaction between companies and developers when it comes to blockchain data. (Don't worry if you're not a developer, I'll explain the problem and solution in detail below.)
The product has already demonstrated its PRODUCT MARKET FIT and stands out in the cryptocurrency market by not being focused on the financial sector, which is a rare feat at this stage.
The proposed infrastructure idea has some key advantages over its competitors:
1)It already collecting data from over 60 different blockchains - the biggest number in industry.
2)The infrastructure is decentralized, which means that it offers a more secure and transparent way of accessing and sharing data.
Let me give you an example of the problem that Covalent solves. When you use a platform like AAVE protocol and connect your wallet, you can see your deposit balance, borrow balance, and wallet token balance. You might also be able to see your latest transactions on the webpage. But how does AAVE protocol get this data from the blockchain? There are two ways to do it:
First way, AAVE protocol can run its own node to collect data from the blockchain. However, this is not easy because running a blockchain node can be complicated, and as a company, AAVE would need to spend time, human resources, and other resources to manage this node. Imagine if the DAPP is cross-chain (like AAVE) and works in 10 different blockchains with different node types. This means that AAVE WOULD HAVE TO RUN AND MANAGE 10 nodes themselves...and instead of a landing protocol, the company is already turning into a node managing company...
This is where Covalent comes in. Rather than going through the complex steps described above, AAVE and other DAPPS can use Covalent's API to collect data from different blockchains without the need running nodes. This simplifies the process for companies by 99%.
Another advantage of using Covalent is that users don't have to worry about the accuracy of the data they receive. Covalent's network is decentralized and designed to prevent bad behavior among participants.
I will cover how Covalent manages its network to ensure the accuracy of data in my next article.
More details for developers and users - https://www.covalenthq.com/resources/ Show Less