A Relentless Pursuit of Innovation: Migrating the Covalent Network to Wormhole
TLDR: Our team at Covalent considers setbacks to be gifts. It’s an opportunity to prove one’s mettle and such opportunities do not present themselves often. Despite the unfortunate event the Nomad Hack presented, Covalent chose to focus on what it does best: building. By relentlessly pursuing innovation and refusing to let external forces stray us from our mission, Covalent is excited to rise from the original plan for the Covalent Network and announce our successful path forward with the migration to the Wormhole bridge.
First Steps
On May 4th, 2022, Covalent announced its biggest initiative yet by launching the world’s first data verifiability network in Web3 — with staking on the Covalent Network going live. Using Moonbeam as the settlement layer, delegators and operators were able to stake Nomad CQT, (madCQT), from Ethereum by using the Nomad bridge. Covalent was ecstatic to be bringing the launch of the Covalent Network to inception after years of research and development.
The Fall
In August 2022, just four months after the staking launch, the Nomad bridge was exploited and over $190 million in various assets was stolen from the Ethereum network. Covalent was one of the victims of this hack, losing 11.3% of the CQT circulating supply and impacting a few hundred members of the Covalent Network operators and delegators.
Migrating the Covalent Network
Recognizing the harmful impact that the hack had caused, Covalent immediately prioritized coming up with a solution that would benefit the entire Covalent Network and community. In November 2022, Covalent announced The Covalent Recovery Plan, identifying and outlining a path to make all those impacted by the Nomad Hack, including operators and delegators, 100% whole. The solution was to migrate the staking contract from Nomad CQT, (madCQT) to Wormhole CQT (wholeCQT).
Today, on Wednesday January 18th, 2023, we are excited to announce that the Covalent Network has successfully migrated from Nomad to Wormhole, the new bridge of choice to enable the secure bridging of CQT to other networks. Wormhole is a bridging platform with a generic message-passing protocol that connects to multiple chains. In order to do this, they emit messages from one chain to another observed by a Guardian network of verified nodes. Post-verification, the message is submitted to the previous target chain where it is processed.
Migrating from Nomad to Wormhole will allow the Covalent Network to continue to operate on Moonbeam without needing to stop in any significant way, while also providing an alternative off-ramp to Ethereum (which will be the Wormhole bridge). The security of the network will now be backed by wholeCQT, with staking and redemption being able to function as normal, while also being fully backed on Ethereum by the Covalent Foundation.
Covalent Vision and Beyond
The Wormhole Migration represents more than just a path to recovery, but also as a resurgence of the Covalent Network. Regardless of the turbulence of the current macroeconomic conditions, Covalent remains steadfast in our relentless pursuit of innovation. The team at Covalent is unified by the singular goal of never losing sight of building the biggest and most compelling data infrastructure in the world that increases the global adoption of blockchain technology. With this doctrine of relentless shipping combined with the creative and tenacious spirit of the team, Covalent has seized this opportunity with the new path forward for the Network. First, the Wormhole Migration. Next, our move to a Layer 1 and beyond.
About Covalent:
Covalent provides the industry-leading Unified API bringing visibility to billions of Web3 data points. Developers and analysts use Covalent to build exciting multi-chain applications like crypto wallets, NFT galleries, and investor dashboard tools utilizing data from 215 + blockchains. Covalent is trusted by a community of 40,000+ developers and powers data for 5,000+ applications, including 0x, Zerion, Rainbow Wallet, Rotki, Bitski, and many others.