VSClan Focus: Covalent
Introducing the world to the members of the Victory Square family.
We first met Ganesh Swami at the Vancouver tech-hub, Launch Academy, in 2015. In a room full of early-stage startups and entrepreneurs, his drive and passion for data and technology could fill up a room. Having launched his share of start-ups over the years, it made sense that an already data-savvy industry veteran like Ganesh would enter the Blockchain space. Enter Covalent, Swami’s latest company and one based around a premier data analytics suite designed to maximize transparency and accountability in cryptocurrency and token offerings. Inspired by the breadth and coverage of blockchain data that Covalent will bring, Victory Square is working alongside Ganesh and his team to help them establish their cutting edge approach to data. We spoke with Ganesh, freshly returned from the World Blockchain Forum in New York, to get a better idea of what Covalent is doing to change the game.
Victory Square: Tell us about your background. How do we get from software consultancies in high school to Physics and then to bridging centralized databases?
Ganesh Swami: I’m trained as an engineer and have been writing code since I was 15. I’ve always known that I would start my own company someday but had no idea how. The software consultancy was selling simple Excel macros to automate tasks. At 18, we moved to Canada as immigrants. Since I had to rebuild my world, the only way to distract myself was to pick a difficult program and excel at it. I picked Engineering Physics at SFU and muscled my way into making friends.
But the dream of starting a company never left me. I needed to figure out how.
So, I joined a biotech startup company to learn how. That was my “AHA!” moment. I realized that it was possible for a group of people to come together and envision a new future.
Through my career working on multiple startups, I’ve become an expert in the entire lifecycle of data: data collection, data storage, data analysis and data visualization. Every couple of years, there’s a disruptive technology on the horizon and there’s an immediate need for data portability. You can change the code, but data has inertia and stays put.
That’s Covalent. We bridge the new world of decentralized blockchains and the old centralized world of databases.
Victory Square: What is the Covalent Terminal?
Ganesh Swami: Covalent Terminal is a visual way to explore the adoption and traction numbers of a particular token and smart contract on the blockchain. Right now, there’s not a lot of visibility on how these tokens are actually used in the real-world and all the mind-share is about the prices on the exchanges. It’s all speculative. With Covalent Terminal, you can connect the dots between utility on the blockchain with market prices and draw your own conclusion on whether a token is undervalued or overvalued.
Victory Square: Explain to us how a hackathon pointed you towards the Covalent Terminal?
Ganesh Swami: The genesis for Covalent came out of a hackathon. We had built a SQL to blockchain network translator just because it would be cool. We won that hackathon. After deciding to start a company around this technology, we quickly realized that there was no market for this technology yet. So we decided to use this technology as our proprietary secret sauce and build a use-case around it.
Covalent Terminal is a super user-friendly way to visually explore how the different tokens behave on the blockchain. This is a real use-case that investors can use today to make data-driven decisions on their investments and holdings.
We’ve indexed 70,000 tokens and 500 million smart contract executions and we show you everything you need to know about a token and the health of the token economy
Victory Square: How vital is the need for Transparency in today’s Blockchain market?
Ganesh Swami: There’s not a lot of data-driven reporting or transparency in the cryptocurrency market today. With public companies, you are required to make quarterly audited fillings in order to be compliant with the laws. There’s no such thing in the cryptocurrency market. Hence all the scams you hear about in the news.
With Covalent, we are envisioning a future that does not exist today. We are trying to bring transparency to investors in a way that has never been done before. The transparency is critical for crossing the chasm and mass market adoption. Sunlight is the best disinfectant.
Victory Square: How do you stand out *and* build something defensible in a day and age where almost everything is being packaged and sold?
Ganesh Swami: There are very few defensible business models in the technology space. Almost everything will be commoditized in a few years and your company will face downward pricing pressure from new entrants. I’ve studied a lot of business models over the years and I think you’ll have to build a moat and erect barriers to entry from day 1.
Ultimately, I think the only true defensible asset is your brand. We are investing heavily in the Covalent brand. Our hires number 4 and 5 were research analysts who are writing deep, cutting analysis of the cryptocurrency market using our proprietary data and Covalent Terminal. That’s how we are going to stand out and build our brand at the same time.
People will come for the cryptocurrency research and stay for the blockchain data.
Victory Square: Tell us more about your research reports and the team behind it?
Ganesh Swami: As with any emerging industry, crypto has attracted both aspiring entrepreneurs working on world-changing ideas as well as a barrage of fraudsters launching scams ICOs with poorly designed projects.
In a broad sense, the research reports are editorial on the data that Covalent Terminal gives us. We set ourselves up with a high bar to clear — to only publish our very best work, our team has formulated a research methodology to act as our own internal benchmark for quality. We call this process AUDIT, an acronym that stands for:
A — Actionable. With a clear highlight on what problems are being solved, what are the dominant platforms and their opportunities, strengths, and weaknesses.
U — Understandable to the layperson. Jargons permeate whitepapers and can make it difficult to decipher whether the supply-demand economics are sound and whether the problems with the centralized counterparts are actually being solved.
D — Data-driven. The fundamental challenge with crypto-backed assets is that there are no established valuation and risk models for them. We try to draw the line between current utilization of the blockchain platforms — using Covalent’s proprietary methods to source the data and what current market prices suggest about investor’s expectations for the future.
I — In-depth. In order to structure our research, we’ve categorized the different platforms into sectors (or “decentralized economies”) and repeat our investigative process. This ensures that we leave no stone unturned.
T — Timely. Platforms come and go and new network incentives are introduced all the time. Our research always reflects the state of the art at the time of publication.
There’s something in these reports for everyone: whether you’re an investor looking to deploy new capital, or an existing player trying to understand the adjacent competition, or a centralized alternative trying to understand the new decentralized economy.
Our research will ensure that you know what platforms and decentralized economies are worth your attention.
Victory Square: You’ve been in the data space for over a decade now, what is it about it that appeals to you?
Ganesh Swami: There are strong parallels to the energy market: capturing, storing, transporting and using energy. It’s so interesting and there are so many variants and iterations of both the problem and solution space that are possible.
High level, Data is the only artifact that we as a species leave behind. Everything else we’ve built will disintegrate over time, but data has inertia and is here to stay. In fact, the amount of data we are collecting and storing continues to grow exponentially. Some people say we’ve collected more data in the last 10 years compared to the 1000 years prior.
Data is everywhere. Your car is now collecting tons of data. Tesla uses data to tune their self-driving functionality. Your buildings are now collecting tons of data. The data is being used to tune the HVAC systems to control CO2 levels preventing the occupants from becoming drowsy. People are now also collecting real-time data on their health. We need to understand it and use it for preventative care.
Victory Square: Why is having in-depth data analysis so important?
Ganesh Swami: Data has always been important, but over the last couple of years data-driven decision making has become crucial. If you look back at the last 30–40 years, the technological and innovation cycles are starting to shorten. It has taken less time for Snapshot to reach mass adoption compared to Facebook prior and Google prior to that, etc.
The flip side of this pace of innovation is that without data, making the wrong decision can cost you your leadership position in the industry. Data allows you to course correct mid-flight.
Data > Opinion
Victory Square: What’s next for Covalent? That you can talk about…
Ganesh Swami: Over the next few months, we are going to be staffing up. We are actively looking for engineers to round out the founding team.
Our first product offering is in private beta right now. We are heads down fixing bugs and adding polish based on the feedback we are receiving from our early users.
In the long term — 2–5 years, we are going to innovate around some of the most fundamental parts of the decentralized stack. Decentralization started as an insurance policy against an Orwellian future, but there’s so much more in terms of privacy and security that are still yet to be figured out.
Learn more about Covalent: