CoinGecko Podcast - Bitcoin & Cryptocurrency Insights

Ganesh Swami, CEO of Covalent Explains Covalent’s Technology - Ep. 27

March 03, 2021 Bobby Ong Season 1 Episode 27
Ganesh Swami, CEO of Covalent Explains Covalent’s Technology - Ep. 27
CoinGecko Podcast - Bitcoin & Cryptocurrency Insights
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CoinGecko Podcast - Bitcoin & Cryptocurrency Insights
Ganesh Swami, CEO of Covalent Explains Covalent’s Technology - Ep. 27
Mar 03, 2021 Season 1 Episode 27
Bobby Ong

In this episode, Bobby Ong, co-founder of CoinGecko is joined by Ganesh Swami, the co-founder and CEO of Covalent. Bobby interviewed Ganesh on the background of Covalent, differences between Covalent and The Graph, his thoughts on ETH 2.0 as well as Covalent’s plans for 2021.

[00:00:02] Intro
Introduction of Covalent
Users of Covalent
Differences between Covalent and The Graph
Index Data for Layer 1 and Layer 2 solutions
Thoughts on ETH 2.0
Effect of Layer 2 solutions on ETH DeFi ecosystem
Plans for Covalent in 2021
Where to follow Covalent

Quotes from the episode:

“If you want to get a balance of every ERC20 token in your wallet, that is not a question that The Graph can ever answer. But Covalent can answer that in 300 milliseconds.” [00:12:43]

“And so I would say Ethereum is kind of like the Jack of all trades, but it's not the best probably at every single use case, but it can definitely build a specialized blockchain for a specific use case and carve out your niche.” [00:23:44]

“We do have a token. We will be announcing a lot of that stuff soon, but I would say the big milestones for Covalent this year would be our public sale, which is sometime in Q2." [00:30:20]


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Show Notes Transcript

In this episode, Bobby Ong, co-founder of CoinGecko is joined by Ganesh Swami, the co-founder and CEO of Covalent. Bobby interviewed Ganesh on the background of Covalent, differences between Covalent and The Graph, his thoughts on ETH 2.0 as well as Covalent’s plans for 2021.

[00:00:02] Intro
Introduction of Covalent
Users of Covalent
Differences between Covalent and The Graph
Index Data for Layer 1 and Layer 2 solutions
Thoughts on ETH 2.0
Effect of Layer 2 solutions on ETH DeFi ecosystem
Plans for Covalent in 2021
Where to follow Covalent

Quotes from the episode:

“If you want to get a balance of every ERC20 token in your wallet, that is not a question that The Graph can ever answer. But Covalent can answer that in 300 milliseconds.” [00:12:43]

“And so I would say Ethereum is kind of like the Jack of all trades, but it's not the best probably at every single use case, but it can definitely build a specialized blockchain for a specific use case and carve out your niche.” [00:23:44]

“We do have a token. We will be announcing a lot of that stuff soon, but I would say the big milestones for Covalent this year would be our public sale, which is sometime in Q2." [00:30:20]


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Bobby Ong (00:00:00):
Welcome to the CoinGecko podcast. I'm your host, Bobby Ong. Each week we will be interviewing someone from the blockchain industry to learn more about this fast moving crypto currency economy. If this is your first time listening, then thanks for coming. The CoinGecko podcast is produced each week to help you stay ahead of the curve. Show notes can be found at I highly encourage you to join our newsletter, where we send out top news in the crypto industry every Monday to Friday. Come back often and feel free to add the podcast to your favorite RSS feed or iTunes. You can also follow us on Twitter and Telegram @CoinGecko.

Welcome to the CoinGecko podcast. For today's episode. We have Ganesh Swami, the co-founder and CEO of Covalent - a leading blockchain data analytics company. Covalent is indexing all of the world's blockchain information and making it queriable via a single unified API. Ganesh is a serial entrepreneur and has over a decade experience in big data analytics. He started his career in building protein simulation algorithms to solve cancer. Before we begin, a disclosure, CoinGecko Ventures have invested in Covalent. Welcome to the CoinGecko podcast, Ganesh. 

Ganesh Swami (00:01:12): 
Thank you, Bobby. Truly honored to be here as a guest. 

Bobby Ong (00:01:16):
Yeah. I'm very happy that you are able to join us. So to start things off right, Ganesh, like, maybe can you give us a simple explanation of what Covalent is and why is Covalent needed in the blockchain ecosystem? 

Ganesh Swami (00:01:28): 
Absolutely. So what is going to happen in the, I guess the best way to start is, push ourselves to 2025, so four years from now and imagine a future that we're all building towards. A lot of the projects in the blockchain ecosystem are futuristic. And what I think is going to happen in that ecosystem is, it's going to be a very vibrant ecosystem of multiple Layer 1 chains thriving. That's just the reality. My experience comes from the database world and in the database world, you have multiple multi-billion dollar databases from Oracle, SAP, Microsoft, Google. And so for this future vibrant ecosystem, to pull out data, to understand your assets, to derive transparency, you needed a way to understand the data that's on the blockchain. And that is really what Covalent is trying to build. We're building a unified API, over all of these base layer chains. 

Bobby Ong (00:02:24): 
And how do you get this idea to start Covalent? What drove you to really want to go out and build Covalent? 

Ganesh Swami (00:02:30): 
To be honest, my introduction to the blockchain and crypto ecosystem was quite accidental. So I've been in the database space for about a decade, really doing big data analytics and what has happened, so if you think about the database space, over the last 40 years, nothing has really changed. There's been no change. Like Oracle, the Sequel database was built in the seventies and that's still still working. But in the last I would say 10 years, there's been a new kind of database, like the likes of Snowflake that has really changed the paradigm.

So I was imagining, I thought job blockchains were a joke back in 2017 because 15 transactions per second is something that even my watch can do. So I did really understand the ethos of what a decentralization gives you. And for me, it was just another data store. So I said, "Okay, what's happening in the traditional database space is, Sequel is the unified language that all databases speak to. So why not I just put Sequel on the blockchain?" So we went to a hackathon actually the Bluecell hackathon, which is, I believe a Singapore company. 

So they hosted a database hackathon and at that hackathon, me and another guy built this solution, where on one side it looks like a Sequel database, just like Postgres, and on the other side, it's just the Ethereum blockchain. So you can just connect Excel or Tableau or any tool that speaks Sequel and pull out data from the blockchain. So that was the Genesis story. So we ended up winning that hackathon and then decided to start a company, which I could not have imagined how hard it would have been. But that is really the story behind Covalent.

Bobby Ong (00:04:07): 
And this hackathon, when was the hackathon? Like, when do you first work on this?

Ganesh Swami (00:04:11): 
This was October, 2017. So probably just either before the peak or just towards the peak. So there's all this craze. I think Ethereum was over a thousand dollars and then one of our common investors someone I know in the community said, you should really check out this blockchain space. There's a lot going on here. And so he said maybe the best way to start is go to a hackathon and participate in the hackathon. So that was our story. 

Bobby Ong (00:04:36):
And the hackathon was in Singapore. And you are based in Toronto, right? 

Ganesh Swami (00:04:40):
No. No. The hackathon was in Vancouver.

Bobby Ong (00:04:43):
Ooo... Okay. Okay. 

Ganesh Swami (00:04:44): 
So the Bluecell's  engineering team is in Vancouver.

Bobby Ong (00:04:47):
Okay. Okay. That makes sense. I thought you flew all the way from Canada all the way to Singapore just... All right. Cool.  

Ganesh Swami (00:04:54): 
Just to complete one more sentence from that idea. So when we started the company, we wanted a cool catchy name and one thing that is very apparent in the blockchain ecosystem is the words like block, the words like chain, a hexagonal logo. These are all standard tropes, right? It's just a repeated pattern. So I didn't want any of those ideas. And that's why we call our project Covalent because covalent bonds in chemistry, which is where my background is binds dissimilar things. And here we are binding blockchains and database. And that's really the Genesis story for Covalent. So we came up with a cool chemistry name. Of course we didn't stick with any of the periodic tables or the gas bubbles and all that stuff.  Just, the name is Covalent. 

Bobby Ong (00:05:39):
Yeah. I always thought there some connection with covalent bonds in the name.

Ganesh Swami (00:05:43): 
That is right. So we bind blockchains. That's really what we do.

Bobby Ong (00:05:46): 
Binding blockchains with SQL and Sequel and putting them in it. All right. So I guess since the time you started in October, 2017 through the hackathon up to now in February, 2021, right, how many users have you gotten so far? And who are the current users of Covalent? 

Ganesh Swami (00:06:03): 
Absolutely. So I would not say the journey has been easy. So right when we started building the product. It took us about eight months to build an MVP. And then, you know, just as any entrepreneur, you go out and recruit users. Right. And we went out and tried to recruit users, but well there was just no users, because we were in the depths of the bear market. And so it was just grinding and grinding and grinding, finding customers here and there. So I would say 2018 and 2019, there wasn't a lot of traction. We were still refining the architecture, still hitting some of those scaling challenges with Ethereum and then 2019, DeFi I started picking up. So initially in the 2019, I would say late 2019, early 2020, what happened is we started closing a lot of these dApps. So like if you look at the InstaDapp version one. A lot of the OTC desks, b0x back then, Neo lending platform.

There's a lot of like dApps, like those early dApps, they were using Covalent to pull out analytics. So mostly interest rates, balances, positions, that kind of stuff. Very, very primitive stuff. And then 2020 came around, and then what happened is we opened up a paywall. So we started as a traditional SAS company. And when we opened up the paywall, all of these dApps joined. And so then it was very, very apparent to us that dApps don't really have product market fit. Or they will not value or pay for a product, like data analytics or a data middleware. And so then we pivoted to different target segment, and then we started getting a lot of traction in the taxation space. So in the Western world, every DeFi transaction is a taxable event. So you need accurate cost basis. So for example, if you have a Maker Wallet, opening a Maker, paying back your loan or taking out a debt, all of those are taxable events. So we started closing a lot of these bigger hedge funds, who needed accurate transaction-by-transaction cost basis data. 

So these guys have in-house accountants to do the tax liabilities, but they still needed the raw data. So the DAI wasn't really 1.0, back then. It was fluctuating between 99 cents and $1. And if you're opening a $5 million wallet it matters. A lot. So that was the use cases that we started getting traction. And then we started closing bigger and bigger customers. Another anchor customer for us would be Consensys. So Consensys was trying to build this, I would say a token issuance platform. So they did the scale token launch back in September. And so they wanted to build a dashboard that enables KYC and shows you bonus multipliers, investing schedules, and so all of that data comes from Covalent, for example. And then now we have about 70 different users across a wide variety of customers. So we have lots of dApps. We are specifically very, very popular among wallets. So we have some special use cases specifically for wallets. We have couple of exchanges.

So if you use Coinbase, you can get a transaction export as a CSV. But if you're using Uniswap, you can't really get a CSV export. So that's another use case. I would say there's a lot of DEXs out there. There're some products where the LP, the liquidity pools have to go through a KYC program. So some kind of analytics there. Projects like Polkastarter that is trying to figure out what are scam projects. Projects like Reef, that's using Covalent for all of their positions and balances, specifically when it comes to a cross chain future. Yeah, so just a lot of users out there. Different kinds of use cases.

Bobby Ong (00:09:40): 
And these guys are all paying like some sort of a monthly fee. So you managed to build up this SAS beta platform that you wish to build out right from the start, I suppose, right? 

Ganesh Swami (00:09:50): 
So little bit of story there. So what happened was until middle of 2020, because we were bootstrapped, we had to have a paying program. And so we became profitable by charging customers like Consensys. So all of the bigger clients, we're able to charge, but I believe the next wave is to get these smaller dApps and then help them, giving them a helping hand to reach product market fit. So all of these new users, we don't charge at all. So I would say for the next year or so, after our funding round, monetization hasn't been that important for us. And we still monetize some of the higher end deals because they require SLS and they require business insurance and liability, which of course you have to charge for, but all of these smaller dApps. And there's a lot of these dApps, like in the hundreds, that it doesn't make sense today to charge them. You know, get them. And the phrase we'd like to say is "capture their hearts and minds and then capture their wallets in 2022".

Bobby Ong (00:10:49): 
I like that quote. Yeah. And what about like, do you have any stats or metrics on like the number of API calls or so for Covalent [inaudible]? 

Ganesh Swami (00:11:01): 
You know, I'm actually embarrassed to say this, but we didn't keep track of API calls until December. So until, December of last year, our APO was behind a signup wall. And so the way we were charging or customers, our paying customers is unlimited. All you can eat buffet and you pay us a fixed yearly fee. So that is how we charged. So we never kept track of API calls. But starting January, when we opened up the product where anyone - it's a self-serve product. You can go sign up for the product from the website. We've started keeping API tracks, and we are solving queries in the millions of queries a month. Hundreds of millions of queries. 

Bobby Ong (00:11:40): 
I believe your main competitor in this space will be The Graph, right? What would you say would be the main differences between Covalent and The Graph? 

Ganesh Swami (00:11:48): 
Yeah. So amazing question. A great question. Happy to expand upon that. I would say the biggest difference between The Graph and Covalent is a philosophical difference. And so, in The Graph, what they recommend that their users do is to invest time in writing a sub-graph. That transforms the blockchain data and then serves it through a graph QL API. So that is their philosophy. With the Covalent philosophy, we believe in a no-code solution. That I think is the future. So in the Covalent use case, we've actually spent years copying the entire blockchain, every block, every transaction, every log of it, every balance update, to a database. Just a Postgres database. And then we ask our users to create essentially the equivalent of pivot tables. On top of that a base layer data.

So that is the philosophical difference. So if you look at our customers, if you want to get a balance of every ERC20 token in your wallet, that is not a question that The Graph can ever answer. But Covalent can answer that in 300 milliseconds. So that's an example. So there's no static lists anywhere. So that's the difference. If you want to think about this as an analogy, you can think of Covalent as a single Excel spreadsheet, where the first sheet is all of the data, and then sheet two, sheet three, sheet four are just pivot tables on sheet one, which are easier to do. You can click and drag and drop. In The Graph, you have hundreds of these little spreadsheets that don't really talk to each other. They don't really interact with each other. These are very, very difficult problems in data integration. 

Bobby Ong (00:13:28): 
And then I would say that Dune Analytics kind of like the BI layer, the business intelligence layer on top of the Ethereum blockchain database, right? Like kind of the visualization layer of all the data, I supposed.

Ganesh Swami (00:13:39): 
You know, this is a very, very interesting concept. So Covalent actually started as a Dune Analytics. We still have that UI, so you can literally type 'sequel' into our web interface and run it against our Postgres database. And then create charts. We literally have that interface. The challenge is that if you look at the blockchain space, a lot of the engineers are actually front end engineers. And so they're not very familiar with Sequel. So if you're building a mass market product, you know, that reaches, I would say at least a few hundred thousand users, end users, I would say there'll be more people who know things like JavaScript, then people who know Sequel, in the blockchain space, at least.

Bobby Ong (00:14:21):
Yup, fair point.

Ganesh Swami (00:14:22): 
So I'm familiar with the BI space and the broader ecosystem. And so there's products like Periscope Data and Mode Analytics that are, I would say a compliment to what Dune is doing. But those products have never been able to cross beyond 10,000 or 15,000 users. So that is the philosophical or the difference in target audience.

Bobby Ong (00:14:42):
And currently, I believe you guys index data. And I guess there's two questions here with you. So are you guys also tracking other Layer 1 blockchains? I guess that's the first one. And then what about Ethereum Layer 2 solutions, like Optimism, zk-rollup or Matic?  Do you guys also index these data and sidechains, like xDAI, Loopring, and so on?

Ganesh Swami (00:15:05):
Yeah. So after our fundraising last summer, we've really, really doubled down on adding data availability. So if you think of Covalent, it's a network, right? There's the supply side, which is the source data and the demand side, which is you use it for taxation, use it for dApps, use it for wallets and all these different use cases. And so there's more and more demand, broader coverage on the demand side, because everyone is going multi-chain. And the supply chain, the data becomes richer and richer and richer. So that's really what's happening in this space, which is great for a middleware solution like Covalent. So we've really, really doubled down, generalize all of our models and so now, every EVM chain is a turnkey solution for Covalent. So for example, today we've announced Matic is something that's natively supported. So all of our APIs, all you have to do is change the chain ID and all of the API is just work on Matic. And so we have six other EVM chains that we are indexing right now, which we haven't announced yet, but we will be rolling out the announcement with time.

And the way we work with these projects is not just a technical integration, but actually a go-to-market and a business solution. So we have launched something called One Million Wallets, which is a marketing campaign to incentivize developers to build wallet interfaces. So the blockchain provides a base layer, Covalent provides the data layer and the wallet interfaces is what devs build. So any EVM chain is a turnkey solution. It takes us literally less than a week to index that chain. All of our API is directly supported and we go to market with a partner blockchain. 

Bobby Ong (00:16:42):
Okay. So I guess this will support all the Layer 2 as well. I mean, it's just, they're all EVM compatible and then other Layer 1 EVMs as well get [inaudible], I suppose. Yeah?

Ganesh Swami (00:16:52):
Anything that's EVM is fair game. There're little bit of nuances on how these EVMs work. I'm not sure if this is the right venue for that. For example on Matic, the gas token, the Matic token appears as ETH and is also the ERC20 equivalent in there, which is not the case on Ethereum mainnet, because ETH is not an ERC 20 contract. So that's an example. There are also nuances with how you map these tokens. So for example, if they have a USDC equivalent on Matic, then there's a mapper that is mapping somewhere and you have to translate prices, liquidity, all of that things across the thing, across the bridge. 

Bobby Ong (00:17:32):
I think that they have two different contract addresses, right? For USDC. USDC on mainnet and then USDC on these sidechains and all these things, right? 

Ganesh Swami (00:17:41): 
Yeah, exactly. So we do all of that. 

Bobby Ong (00:17:44): 
And that's one of the problems that we face as well. I mean, an example would be Tether which is listed on Omnichain, Ethereum, Tron and all this things. We have to keep track of all these contract addresses and we start to see a trend, where tokens are being issued on multiple chains. I mean, it was the case back then, where one token, one chain, but now it's just multiple chains and then like [inaudible] managing them.

Ganesh Swami (00:18:06): 
It's going to get even more complicated because it's going to be a path dependent. So you can have an Ethereum asset that goes to Cosmos and then goes to Peggy into another chain and then back to Ethereum. So it's all path dependent. So it depends on how you end up in the source. So it's not like a full circle.  And then different bridges have different exit options. So it's not fully liquid. So this world is going to get more and more complicated. 

Bobby Ong (00:18:35):
And what do you think about ETH2.0? Like will things get increasingly complex with the various shards once it goes live? You see problems with tracking data with ETH2, for example?

Ganesh Swami (00:18:46):
You know, I'm a major ETH goal, right? That's just a given. I think ETH is the best thing that had happened in the world since the internet. I would say it's a massive, massive experiment and so far so good. It's given me a job, for example. So I'm very, very grateful for that position, but ETH2.0 is on a different timescale. And by that, what I mean is that they don't really have any of the market pressures that, you know, CoinGecko or Covalent has because our runways are finite. And we need to ship and we are willing to take shortcuts to go to market because we have to, sometimes it's the matter of runway, sometimes the team will burn out, if you just spend years and years in the research space without hitting production. ETH2.0 is trying  to build ,like the, I don't know the periods of Egypt, where there's only one of a kind, and it doesn't matter if it takes five years or 10 years. Right.

Because it's the perfect solution. So I'm not sure if that is practically reasonable. And there's still some unsolved developer challenges when it comes to shards, which I don't know to this date, how they're going to be solved. I don't think there is a production grade sharded blockchain available today. So it's not clear what's going to happen. So I would say ETH2.0, if you were to ship, I would give it optimistically maybe two years.

Bobby Ong (00:20:11):
Two years? 

Ganesh Swami (00:20:12):
I would say two years. Yeah. I would say minimum two years. Optimistically. And the good thing is that we have lots of other scaling solutions on the horizon. So for example, Matic and Skale are already alive. Optimism is just about to launch . zkSync works for certain kinds of use cases. Of course you have Loopring, you have xDAI, this tremendous amount of traction on xDAI. So all of these, and of course all the other Layer 1 chains like the Solana and the NEAR protocols and the Avalanche. They're all available. So developers are spoilt for choice today. So what if it does not scale. You have all of these other options and you still settle on Ethereum. I think that's a great place to be. 

Bobby Ong (00:20:53): 
Yeah. Everyone's kind of pinning hopes on ETH 2, because like transaction like, if ETH network is completely congested now, gas price is growing super high these days. So, I mean, we've be talking about not just ETH2 but Layer 2 solutions for like years now, and nothing. I mean, the systems are live but it's still rather hard for a beginner to kind of start interacting with these Layer 2. I mean, we have to get the pros, the ETH natives like you and me to start using on these Layer 2 solutions to free up space so that the beginners can get started on the Layer 1. But I don't know, hopefully this year thing would get more certain, more people start using Layer 2 and things clear up. But like Polkadot's kind of building on shards as well, right? Via the different parachain. So that's kind of a similar, roughly similar concept to ETH2. Right?

Ganesh Swami (00:21:41): 
So I would say NEAR is a sharded blockchain as well. And alot of these conceptual ideas, which you don't know if they work in production. And Polkadot the Parachains themselves are, you know, solid areas. We have very close relationships with some of the parachains and  their launch is imminent. But the cross-shard is still an open question, if it'll ever work or if it even matters. If you have a fast enough, basically a chain, why do you even need to shard? Shard is not the only solution.  If you look at the approach that Flow is taking, the approach that Solana is taking, they're just improving the base layer speed, the transaction speed. So at least that is, you know, just like how I said that this war is a philosophical war. It's sharding, no sharding. .You know, something like  no code versus sub-graph. So I think, it's a matter of time. Nobody knows the answers yet. 

Bobby Ong (00:22:37): 
It's a bit kind of like, I mean, the trilemma issue, right? Decentralization, scalability and, I mean, when you have like larger scalability , it kind of like goes decentralization. So I get the ETH guys who said that Solana is not as decentralized as Ethereum, and as you said it's a philosophical question. There is no right and wrong answer. I mean, some things got a go. 

Ganesh Swami (00:22:57): 
Exactly. You know, going back to the database world, I mentioned some of the big names, like the Oracles and the Microsoft, but there's actually a website called So it's a database of databases. And on that website, they have 600 databases. For every single kind of use case. So that's what I'm saying. Like the future is multi-chain. There's going to be a database or there's going to be a blockchain for every single use case. And that's how it should be. There cannot be a one size fits all. That just is not practically possible. So in the database world, you have time series databases, you have graph databases, you have key value storage, you have blob storage, you have databases that show provenance of data. You have just relational databases and you have multimodal databases like Postgres that are, you know, like Jack of all trades. And so I would say Ethereum is kind of like the Jack of all trades, but it's not the best probably at every single use case, but it can definitely build a specialized blockchain for a specific use case and carve out your niche.  And this space is going to grow, I mean, that's why we're all here, right? We're very bullish on the future of this space. And there's going to be ample opportunity for all of the blockchains. That's at least my read on the space. 

Bobby Ong (00:24:10): 
And you guys already tracking, you've already tracked like few of these Layer 1 like Near. What other chains? Like Polkadot? You guys are already tracking data on the Polkadot chain as well? 

Ganesh Swami (00:24:19):
Right now. What we can share is Matic and Binance Smart Chain. That's what's publicly available, has gone through QA/QC. Polkadot is not live yet. So when it's live, we will be indexing that, specifically the Edgeware and Acala, a portion of Acala and Moonbeam. They're all EVM-based chains. So it's just a natural fit for us to index those chains. So we have some exciting announcements on that front. I don't want to spoil this [inaudible]. 

Bobby Ong (00:24:49):
How do you see ETH DeFi ecosystem evolving with the various Layer 2 solution? Do you see any Layer 2 solutions winning or do you see problems coming out with any of these solutions later on?

Ganesh Swami (00:25:03):
See, I think , the challenge is, the word DeFi itself is evolving. Right. So there's DeFi the base, you know, lending, AMM, they're all DeFi, right. And then you have something like the ETF with Set protocol. And then you have rebalancing strategies, like Yearn and Alpha, for example. And then you have these NFTs, which are crazy. And then the NFT and the DeFi merges like NFTX, which is  good friend of mine here in Vancouver,  which are bringing liquidity to NFT baskets. So that's like kind of merging. And then you have this DeFi and Fintech merge, which is about to happen in the next couple of years. So I would imagine every single Fintech company will want to add a wallet for digital assets and they'll need something like to prevail it.

So that is also going to happen. So the solution space is pretty large. And it's very difficult. It's always, always funny. Can you imagine two years ago there was no DeFi, right. That the word didn't matter. Right. The word didn't exist. So things are moving, you know, at warp speed. So it's very difficult to imagine what's going to happen six months from now, let alone, you know, like two years from now. So I would say, the DeFi, like the gas is a showstopper. There's no question about it. Right? I've stopped using blockchain products and that's not good. And, you know, I would say I'm [inaudible] with the ecosystem. So I would say gas is a number one issue on Ethereum.

So everything will evolve around Ethereum. I would say there is actually a very good chance that these Layer 2s are actually bridging amongst themselves. So you can move from xDAI to Matic without going to Ethereum mainnet. So that's a very, very realistic option. So in that case, what happens is that you don't even need ETH2.0 because these different chains are basically shards. 

Bobby Ong (00:26:56):
Yeah. I mean, this gas thing is a big problem, right? Like, I mean, if you are just starting out or you wanna like yield farm with, I don't know, a hundred dollars, for example. There's no way. It doesn't make any economic sense at all, because it costs like 30 to a hundred dollars just for gas fees. And then, any beginner not going to pay $30 just to learn Ethereum. No one's gonna do that. I mean, which means only the whales, who's got like, playing with at least $10,000 to make any of these worthwhile. I mean, if you're stopping $10,000 on Uniswap then yeah, I mean, of course paying $30 on gas, that's totally fine. But like, it's basically crowding out a whole group of people in the space And yeah, we got to get these things solve and all. So yeah, that's a big problem as you said. I almost feels that, we are kind of like returning to the Bitcoin scalability debate of like 2014, 2015, but now on Ethereum. But, yeah, let's see how it goes. 

Ganesh Swami (00:27:48):
What's your read? You think there's a solution on the horizon? 

Bobby Ong (00:27:52):
My read, I was kind of pinning hopes on ETH2 and then like, I really think that Layer 2 needs to scale up this year. Like people need to get used, [native] need to get used to using Layer 2 solutions, like Matic or xDAI. It needs to be popular like Uniswap and all this other popular DeFi app needs to use one of these Layer 2 solutions. If they don't, then these users, we will never get new users on board. And new users will go to Binance Smart Chain or Polkadot or Solana, any other chains. And once the users go to this chain, then like the DeFi apps, like there was native of ETH will either, I mean, other teams would build on these chains and then users go there or this team on Ethereum, you see that they no longer growing because they can't get any more new users. The TVL and dollar value go up. It's a function of ETH price. That if ETH price goes up, then it's fine. But at some point like they will probably start launching other chains as well, because if they don't, then someone else is going to do the same thing.

So that is kind of bad fo Ethereum ecosystem, I would say. I'm personally looking out for Solana and Polkadot this year to see kind of what's going on in this space because those two seem to be the strongest Layer 1 that may have a chance to compete against ETH. But let's see. Right. I mean, it could be like the EOS and Tezos or any of these Layer 1 solutions from three, four years ago. A lot of hype, but nothing came out. So we never know. Right. But I mean, keeping an eye on those things. 

Ganesh Swami (00:29:19):
Yeah. It's definitely an exciting, exciting next couple of months, next couple of years to be in this space. 

Bobby Ong (00:29:25):
So, I guess my next question right, what's kind of the plan for Covalent this year? If you can kind of disclose, I want these plans already.

Ganesh Swami (00:29:31):
 Absolutely. So Covalent start as a traditional SAS business, right? So there's nothing fancy about the business. Customers pay us money and then you serve these queries. And that is how Covalent has been built over the last two and a half years. And we became profitable, had product market fit and things were good. But I think, you know, our ambition is a lot higher than that and we want it to become basically a public good for the entire ecosystem. And if you look in the traditional world, these middleware companies are actually worth a lot, like Informatica, multi-billion dollar business. So it's something, we have a chance here to build essentially the equivalent of a Snowflake in a decentralized fashion.

So, what we've been building over the last six months or so is a decentralized version of Covalent. So we have to announce a lot of the token economics, and a lot of the functional stuff there. But we do have a token. We will be announcing a lot of that stuff soon, but I would say the big milestones for Covalent this year would be our public sale, which is sometime in Q2.  And before that all of the marketing activities, like a developer our liquidity mining, developer mining, you know campaigns like that. And then I would say getting the network up and running from a test net, which is like a toy to the production grade, enterprise grade Covalent that is in production today. That's the live product.

So, you know, you spent years building out that production version and it's almost like we are disrupting ourselves, right. And work continues on, on that production grade system while the decentralized system is catching, playing catch up. And so at some point in later this year, the two visions will merge, but customers will see no disruption. So on the customer side, it's going to look exactly the same. You don't need access to the Covalent tokens. You don't have to do anything special. So that is the magic of what we're building, which is retooling the backend to make it decentralized. So I would say that is what the future of Covalent is.

Bobby Ong (00:31:27):
Sounds interesting. Yeah, I can't wait for this to see your plans and your visions combine later on this year. I guess for our listeners here. Right? I mean, if they're interested to follow Covalent, where's the best place to follow and get updates on things. 

Ganesh Swami (00:31:41):
Absolutely. So we have multiple channels, but we like to engage on. I would say all announcement go to our Covalent announcement channel on Telegram. We also announce everything on Twitter. And if you sign up for our product you will be hearing about all of the developer mining and liquidity mining provisions that come in. So, if you don't hear about something on Covalent, that means we're doing a bad job. 

Bobby Ong (00:32:06):
All right. Cool. Anything else that you think I should ask that I haven't really asked yet?

Ganesh Swami (00:32:11):
I would say, what's next for CoinGecko? You know, CoinGecko is become the mainstay. I think it's maybe one or top, top one or top two of my websites I visit. And I really like some of the deeper pages that you guys have. More than the front page.  I'm sure you get a lot of traffic on the front page, but some of the deeper pages are very, very interesting what you guys did building. So what's next for CoinGecko? Like love to hear whatever you can share. 

Bobby Ong (00:32:33):
Yeah. I think for us, we are constantly trying to stay on the cutting-edge and following developments in the space. As we all know, things move really fast on not just ETH but on all different chains. So, I think for us is trying to stay up to date with all those things and then building tools that will make the lives of everyday users easier interacting the blockchain system. So I think we have a lot of features. You're right that the homepages and the coin pages get the most visit, but like there's all these small different pages, smaller site that we built up that actually serves a lot of use to some niche users somewhere. I think for us, some of the latest thing that we did is, like yesterday we kind of launched our Bitcoin treasuries stage for public companies.

So Tesla just announced that they purchased $1.5 billion worth of Bitcoin. No idea how many Bitcoins they have yet, because that wasn't announced. But, we kind of launched this page too track all the supplies. So that's, I think I calculate that there was 0.52% of all Bitcoins are currently held by public companies. And we anticipate that these numbers are going to go up. More and more public companies just start putting Bitcoin in their treasuries. I can't wait for a time when governments start holding Bitcoin in their treasuries. So like you start seeing, I mean, the mayor of Florida started talking about it but central banks, US government or any other government start holding them, then it really becomes like a replacement for gold. So that becomes a really interesting metric to track. Because once they start holding Bitcoin is just a matter of time before they start holding ETH and maybe a basket of other currencies. So, really excited for that. So we kind of start the things for that. I think another feature that we've kind of rolled out recently as well was button on the coin pages. 

Ganesh Swami (00:34:06):
I saw that I saw that. Yep. 

Bobby Ong (00:34:08):
So, I mean, it was kind of annoying on Metamask like your coins are not reflected and you got a copy the contract address, go to asset page, paste the address and then click add and before you can send a token outside. So like, we had this idea that like, "Okay, there's this shortcut where you can click and it goes out to Metamask then it automatically add it.  So that's one of the things that we put out as well. And turns out that a lot of people like this feature as we announce it. So yeah, these are some of the things. I think for us is a lot of these small, incremental changes are kind of what we plan to make the product better. They are some other bigger trend that we are seeing as well. We don't really have, I don't know, six months or a one year roadmap per say, if you want to put it that way, because things just move so fast and we just have to adapt as we go along. But yeah, these are kind of the ideas that we have on improving CoinGecko. 

Ganesh Swami (00:34:56):
Very cool. Anything on the NFT side? 

Bobby Ong (00:35:00):
Thinking about is, do, try to make sense things is still a bit complex. Yeah. 

Ganesh Swami (00:35:05): 
So we've invested a lot into the NFT space. And I got to say, the data is the best. It's unlike anything else that's on the blockchain. And so I think we have probably like 12 or 13 customers who use our NFT endpoints and all kinds of things like machine learning, valuation, liquidity, analysis, all kinds of things. And even like wallet use cases. And the data is quite difficult. I think the initial, you know how it is like someone builds a piece of technology and the technology picks up. It picks up amazing traction. And what follows up from that basically defines the future of that industry. And because Ethereum didn't have a storage layer the NFT metadata was all stored off-chain in all kinds of random places.

That's just one example. And so if the team did launch with the storage layer everything would be in one place. They'll be all consistent. And that's not the case. Just like how, you know, the Ethereum gas token is not an ERC20 contract. So you can't, you know, like all kinds of weird things. It's a completely different merklerized route, which is different from every other ERC20 contract. So all of these small little things that is basically set and now every other competitor to Ethereum, to make developers lives easy, have to copy over those bugs as well. Right. So it's very, very interesting what's happening in this space.

Bobby Ong (00:36:30):
Cool. Okay. I guess that's all that we have for today. For our CoinGecko podcast. So, thank you very much once again, for spending the time to come and explain what Covalent is. Really appreciate you coming on the show. 

Ganesh Swami (00:36:41):
Thank you, Bobby for this opportunity. Looking forward to getting this out live. 

Bobby Ong (00:36:46):
All right. That wraps up the show. Thank you for listening to the CoinGecko podcast with Bobby. If you like our show and want to know more, check out or please leave us a review on iTunes. If you have any feedback, do drop us an email at Join us for more next week. 

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