Question 1

What is CXT?

Accepted Answer

CXT is the network-access and governance token of Covalent Network. Covalent provides verified on-chain data infrastructure for wallets, analytics tools, AI applications, and others; CXT is used for the network's access, participation, and governance arrangements, rather than being stock in Covalent the company.

Question 2

How does CXT function in the network?

Accepted Answer

CXT is used to support Covalent Network's data infrastructure. Network operators participate in work such as data extraction, verification, and transformation by staking tokens; staking links participants' funds to their performance of duties, thereby providing an economic constraint for data integrity. Here, the token is a tool for network participation, not a certificate of ownership in company revenue.

Question 3

How can ordinary token holders participate through delegation?

Accepted Answer

Token holders who do not directly operate infrastructure may delegate CXT to operators under network rules. When operators complete network work and receive CXT rewards, delegators may share a portion under the applicable rules; outcomes therefore depend on the operator's performance and network rules, rather than being fixed interest or company dividends that arise automatically from simply holding CXT.

Question 4

What do CXT governance rights cover, and what do they not cover?

Accepted Answer

CXT holders can participate in decentralized governance related to network operations, for example by voting on network parameters such as staking requirements and operator compensation. Governance affects network rules; it does not grant holders management or distribution rights over Covalent the company, company assets, profits, or dividends.

Question 5

What is the relationship between CXT and the former CQT token?

Accepted Answer

CQT is the former token that preceded CXT. Covalent completed the migration of CQT to CXT at a 1:1 ratio in 2024, after which CQT was deprecated; therefore, they are not network tokens that remain in parallel for long-term use with different functions. When managing related assets, first confirm that you are dealing with the migrated CXT and the applicable network or service requirements.

Question 6

Does holding CXT mean holding shares in Covalent the company?

Accepted Answer

No. CXT is a token for network access, staking, delegation, and governance; official materials clearly state that it does not represent equity in Covalent the company, dividends, profit distributions, or rights to company assets. Network participation may depend on the token, but that does not make CXT a certificate of company ownership.

Question 7

What is the difference between operators and delegators?

Accepted Answer

Operators and delegators have different roles: operators actually participate in data-infrastructure work and stake CXT; delegators do not operate that work, but delegate CXT to operators under the rules. Both are connected to the network mechanism, but delegation does not turn operational responsibility into guaranteed returns; operator performance and applicable rules still affect outcomes.

Question 8

Why does Covalent Network need staking?

Accepted Answer

The role of staking in Covalent Network is to connect participants' economic interests with the quality of data work. Operators first use CXT to participate in this mechanism and then carry out data extraction, verification, and transformation; in this way, the network does not rely only on declarations, but subjects participants to staking arrangements while they perform their duties. Specific thresholds, compensation, and other parameters are matters that may be adjusted by network rules.

Question 9

What is the relationship between Covalent data services and CXT?

Accepted Answer

The goal of the data infrastructure is to provide users with verified on-chain data; CXT is used to organize the participants, economic constraints, and governance that support that process. In other words, applications use data services, while participants use CXT to participate in network mechanisms; “an application uses Covalent data” must not be equated directly with the application being required to buy or hold CXT.

Question 10

What does the 1:1 migration specifically mean?

Accepted Answer

The CQT-to-CXT migration changed the name and token used by the network. The 1:1 migration ratio means that each applicable unit of CQT corresponded to one unit of CXT. Completion of the migration does not mean that the former CQT continues to have the same network status as CXT; the official announcement lists CQT as deprecated.

Question 11

Does simply holding CXT provide access to all network functions?

Accepted Answer

CXT's network functions include access, staking, delegation, and governance, but each function follows its corresponding rules. Whether participation is possible, what conditions must be met, and what outcomes may result cannot be inferred solely from a token balance; in particular, delegation rewards should not be described as fixed returns, and governance should not be described as corporate shareholder rights.

Question 12

How should CXT's network positioning be understood as a whole?

Accepted Answer

CXT can be understood in three layers: Covalent provides verified on-chain data infrastructure; operators participate in related data work through staking; and token holders can also participate in the network through delegation and governance under the rules. This structure shows that CXT's functions arise from network mechanisms, rather than from ownership of the company or a promise of returns.

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