Covalent Strategic Reserve and CXT Token BuyBack: Key Insights

Covalent, a modular data infrastructure layer designed to power blockchain and AI ecosystems, has taken a significant step towards ensuring the growth and sustainability of its token, CXT. The company has reportedly launched the Covalent Strategic Reserve. This initiative aims to accumulate around 10% of the total supply, fostering a stable economic environment for token holders.

Covalent Strategic Reserve: What You Need to Know

Recently, Chinese journalist Wu Blockchain posted on X that Covalent has created a strategic reserve. This reserve is a long-term move based on both on-chain and off-chain revenue used to establish a base level of CXT via buybacks on a regular cadence.

Importantly, the Covalent Strategic Reserve is a method of managing token distribution that allows the project to hold CXT for a future purpose. A notable aspect of the treasury is that it requires community governance votes to initiate any withdrawals from the reserve pool, demonstrating that holders are incentivized to approve any supply decision. By creating this treasury, the firm aims to reduce volatility in the marketplace and give investors an overt and predictable framework that provides both supply and demand (through usage and buybacks).

Token Buyback

It is noteworthy that, in 2025, the blockchain platform has made impressive strides, repurchasing over 17 million CXT tokens through buybacks that are backed by off-chain revenue. The company has further removed 9.05 million tokens from the circulating supply through automated buybacks, on-chain.

The buybacks and the supply depletion, in combination, tackle the circulating supply in hopes of increasing the value of the leftover tokens based on token scarcity. The mixed strategies of off-chain and on-chain determine Covalent's commitment to accumulating tokens in anticipation of extended stability.

Community Engagement

The crypto community has exceedingly produced support around the blockchain platform’s initiative. In response to a post made by Wu Blockchain, community members shared excitement and hailed the development as “a smart move.” They are saying that locking up crypto and executing a buyback underscores the company’s commitment to a more strategic, long-term point of view.

Another response read, “Covalent model blends accountability, sustainability, and decentralization in a way the space needs more of.”

CXT Plummets

Despite this development, the token has seen a significant plummet. Since its launch in August 2024, the cryptocurrency has been experiencing a volatile journey, with its price witnessing severe lows. Although it hit a high of $0.1597 earlier this year, it had a terrible track afterwards.

Now, CXT is valued at $0.01573, down by 0.5% in a day, 4% in a week, and 38% in a month. Although the crypto hasn’t shown much positive response to the treasury, the community is showing optimism. This is evident in the 7% hike in the 24-hour trading volume, currently at $2.09 million.