Governance Proposal: Recalibrate $CXT Emissions by Half to Extend the Security Budget into the Next Stage of the Network
As the Covalent Network prepares for the transition to revenue-linked rewards and light client data validation, the network proposes adjusting $CXT emissions in half to extend the staking rewards runway.
Purpose of this Proposal
To bridge the gap between the current staking rewards program and the next stage of the Covalent Network, the protocol proposes recalibrating $CXT emissions from 66,750 $CXT per epoch (day) to 33,375 $CXT per epoch (day).
The Covalent Network is approaching an important inflection point. With approximately 4.1M $CXT remaining in the staking rewards pool, the current emissions schedule would deplete the budget by July 31, 2026. Halving emissions extends the program through the end of September 2026, providing the additional runway required to finalize the network's transition to its next phase of growth.
Current Context
The Covalent Network evolves as conditions change. Over the past several cycles, the network has scaled rewards, adjusted the max multiplier, increased the maximum and minimum stake for operators, and executed buybacks to strengthen the security budget. The network is now preparing for its next leg of growth: a reward model directly tied to network revenue and the introduction of user or light client data validation.
Two recent developments make this transition window especially important:
Base's announced shift to transitioning from the shared OP Stack to a unified, self-managed technology stack. The Covalent Network previously proposed preparation to migrate to Base. With Base's architectural direction now changing, the network is reconsidering the Base migration to ensure any chain decision aligns with the long-term interests of $CXT holders, operators, and delegators.
The next stage of the network is revenue-driven. Rewards in the next phase are intended to be directly linked to revenue generated by the network from API calls and to compensate users or light clients for validating data. This shift moves the Covalent Network from an emissions-funded security budget to a usage-funded one — a more sustainable and demand-aligned reward model.
To reach that next stage in an orderly way, the current rewards program needs to remain solvent through the transition window. Halving emissions provides time without exhausting the reserve.
Emissions Recalibration Proposal
The Covalent Network proposes adjusting emissions from 66,750 $CXT per epoch (day) to 33,375 $CXT per epoch (day).
Note: the current median APY is ~15%, which is expected to be half if the proposal is passed and the amounts staked with operators stays the same.
This adjustment preserves staking participation incentives while preserving optionality for the next chapter of the network. It does not introduce new emissions, change unbonding periods, or alter operator parameters — it only changes the rate at which the existing rewards pool is paid out.
What Comes Next
The additional runway secured by this proposal is intended to cover the transition to:
A revenue-linked reward model funded by API call revenue from data consumers.
Rewards that compensate participants for validating Covalent's data outputs, deepening the network's verifiability guarantees.
A final decision on the chain home for the Covalent Network, taking into account Base's architectural changes and the broader landscape.
Further proposals will follow as each of these components is finalized.
Voting Process
Eligibility: All $CXT token holders, including those staking, delegating, or holding $CXT on Base, are eligible to vote.
How to Vote:
Navigate to the Snapshot page for this proposal.
Connect your Ethereum wallet containing $CXT.
Vote by signing a meta-transaction.
Quorum:
A minimum of 10M $CXT voting weight is required to reach a quorum.
Duration:
Voting will be open for 5 days upon proposal launch.
