Data is the entirety of human life. What we do every day produces data, down to the core part of our being- breathing. For different purposes, the data we produce is very important and can mean life or death, poverty, or wealth when handled in different ways. Vernor Vinge, an emeritus professor of Mathematics at Sandiego State University, stated in a talk about “A Singularity Sensation” that the major problem humankind faces is data glut. We produce so much data that we cannot arrange them properly to do us good.
Digital Data
Digital data has been seen to be useful and precious. The reason why big companies hunt for individual data is so they can look closely into their lives and bring them to buy their product. People will always buy from sellers who know them personally. What's sad is that data thieves take advantage of our online life and sell them to these companies so they can manipulate us and sell us trash. Your data should be in your control at all times. Companies use data analytics to navigate their course of action. Geoffrey Moore, author, and consultant highlighted that without data analytics, companies will be wandering the web just like deer on a freeway because they are deaf and dumb.
Financial Data
Financial data is one of the most important of all. It gives a capture of the decisions we make per moment and can be used to predict what will be our financial state in the future. Thanks to blockchain technology individuals don't have to go through rigorous processes to have access to their historical financial data from genesis. Because of the transparent nature of the blockchain, individuals can have access to their financial history. But what do they do with it? Vernor Vinge was very correct when he stated that humanity suffers from a data glut. We have much of this history but they just look like junk.
DeFis and Data
In this era of Decentralized Finance, many people believe it is all profitable so they just dive in headlong without having a plan. At some point with consecutive bad decisions, they discover they discover they are losing. Why? They have data but cannot research the data they have. (You should check what Impermanent Loss means in DeFi). For developers who create DeFi smart contracts, they go through a lot of rigor to be able to index the transactions of their users. Each user must be able to see the history of their interactions with their smart contracts and other details like fee, which pool liquidity was added, etc. while they worry about how the front end will look, the behavior of their smart contract, etc. they spend a considerable amount of time indexing blockchain data. Many DeFi platforms don't have the ‘download CSV’ option to allow their users to introspect on their positions.
Why Blockchain Data is Important
Mike Schmoker, a teacher, football coach, and author said that things get done if the data gathered can inform and inspire a position for change.
Blockchain data are useful for many purposes as earlier iterated in this article. They can be used for descriptive, diagnostic, predictive, and prescriptive purposes.
Data is Descriptive
One can use his blockchain history and interaction with a certain DeFi platform to see an overview of his decisions. On explorers like Etherscan, the data is all joined up and quite messy. But with good analytics and indexing, you should be able to check details like how much in total have you spent on fees, on which pairs, or which lending option have you been making a profit the most. Which of the decisions result in loss, etc. Companies or projects can easily analyze and get the number of users using their platform, their Total Value Locked (TVL), and other analytics that shows their health. Developers can use the data they collect on addresses to distribute stimuli to users who use their platform for a certain period of time or who hold their assets. Remember the Uniswap UNI airdrop? That was possible with Blockchain Data.
Diagnostic
Based on the history provided by the blockchain, individuals can use data and analytics of the data collected to diagnose inconsistencies. Blockchain data will help pinpoint sources and times of errors. Diagnosis will reveal a lot of information to enhance fruitfulness.
Predictive
When analyzed, blockchain data can be used to predict what will happen in the future. DeFi platforms can tell what the average yield on a particular pool will be for a year because they analyzed the data they have based on users' interactions with the smart contracts. Various arbitrage bots also use blockchain data to make decisions. Data from blockchain are used to help developers identify legitimate users.
Prescriptive
Having an access to a neatly indexed blockchain history can inform decisions to change a position to improve profit. There are blockchain tools that can really help to notify users when their positions are running into a loss so they can make adequate changes. These tools use blockchain data. Without them, lending platforms will be hell for many.
As great as the importance of blockchain data are, having access to them is the same as having them. All blockchains today give an explorer but these explorers give messy data. There is a need for an in-depth filter.
Covalent
Source
Covalent gives unified API access to indexed blockchain datasets for use for diverse applications and research. Application Programming Interface (API) serves as an intermediary to connect two or more applications. To develop a wallet or DeFi platform, developers need to build a smart contract, request archival nodes for data to be indexed (balances, asset holders, histories, etc.) each of which can take long lines of code, and build the frontend. Covalent removes the hassle of communicating with archival nodes, their Unified API can make calls and requests for developers so they can focus on other aspects of their project such as building a solid smart contract and front end. Aside from this, developers at Covalent make tools available for other developers to build APIs for new use cases.
Covalent opens up a lot of possibilities, many of which are exciting to see. They have partnered with tons and tons of blockchains and blockchain-based projects to bring value to space. Let's dive into some use cases of Covalent
Descriptive
Team members at Covalent are not just developers, they are researchers. They know what to do with the data they collect. Covalent has made the results of their in-depth research on some crypto projects available for the public. Check this deep-dive on Uniswap Traction Analysis by Ganesh Swami, Covalent CEO and Co-founder. The research findings were all thanks to data from Covalent API. The project also launched Defistats.io to for users check the analytics of various Defi platforms. Courtesy? Covalent API.
Diagnostic
Via API developers can easily check and diagnose the health status of their project. Individuals can also check what is going on with their dealings.
Do you know Covalent built the ‘download CSV’ option for MakerDAO and many other DeFi platforms?
“Download CSV” allows you to check your standings and see your growth in one sight.
Predictive
Data through the API from Covalent can be used to predict what future behavior of an asset or standing will be. Ganesh reported that TVL is not the best method to measure the actual value locked in DeFi platforms, he gave the challenge to anyone who might come up with a better way.
Prescriptive
Covalent API can help to build tools that can be used to track holdings. Built with Covalent, Safekeep application helps users to track their DeFi positions. (Check more details about Safekeep here). Interestingly, they can set notifications when your positions are in the danger zone. You can use Parabola a tool that allows you to calculate the collateralization risk ratio on MakerDAO assets with no code. Watch Natasha give a walkthrough in the video below.
Safekeep and Parabola are tools that are built to access blockchain data via APIs from Covalent.
Personal Opinion
Being a researcher, I cannot overlook what problems Covalent solves so I had to make my own findings of the project. The team is welcoming and ready to help you when you have challenges with their product. I was privileged to have a brief chat with Ganesh and believe me, I was surprised that he would make time out to answer my questions. No wonder they secured a $3.1 Million in oversubscribed funding round with investors from Woodstock Fund, 1Kx Capital, and Mechanism Capital. This article is a result of my findings. I was overjoyed to also know that they are working to provide APIs for Data on Avalanche (one of my favorite blockchains).
Covalent Links
WEBSITE | API DOCS | BLOG | YOUTUBE | TWITTER | TELEGRAM | LINKEDIN | FACEBOOK | GITHUB | MEDIUM
Posted from my blog with Exxp : https://cryptostocksreviews.org/covalent-is-bringing-blockchain-data-to-life-via-a-unified-api-why-you-need-an-indexed-data/news/