Improving the way in which blockchains can better index, catalog, and search through its vast troves of data is one area of interest that the subject of our The Graph review is most keen to solve. The word “graph” is defined as ‘an instrument of recording', and The Graph does just that within a blockchain. An indexing and querying protocol, The Graph is made to serve dApps and enabling developers to more efficiently store, manage, and access their data in a timely manner.
It all works through its open-source APIs, unique indexing systems, and further decentralization through the common Web3 layer that many dApps rely on. Thus, it won't just have the promise of significantly improving the performance of the many dApps in use today – which would otherwise take hours or more to query some indexed data – but also opening up the usability of blockchains massively. So, let's get into us The Graph review to find out if they really are that revolutionary.
What Is The Graph?
The Graph, as we explained earlier, is an indexing protocol to aid in querying data more efficiently from blockchains. As of this The Graph review, most of its concepts and technology is deployed on the Ethereum network, and has been adopted by several major dApps and services there such as Aave, Uniswap, Balancer, Synthetix, Decentraland, and more; hence proving The Graph's usability in any form of application, from DeFi (decentralized finance) to NFTs (non-fungible tokens).
This is so long as it involves managing, cataloging, and then serving that data from blockchains. The Graph essentially decentralizes the conventional query and API layer of Web3 – a structure that is necessary to run most new dApps – which helps to remove a massive barrier for developers. These dApps' creators no longer have to choose between whether they'd accept centralized data to make their services more performant, or to sacrifice that to build a more decentralized dApp.
How Does The Graph Work?
The Graph, therefore, makes it possible to query data that would otherwise be difficult to query directly. Certain queries may be straightforward for the dApp in question to answer. But there are other queries, such as those that involve searching through set dates and times or other long strings of data, which may take a long time for even the fastest of dApps to answer. This is owing to multiple complex structures around the traditional means of cataloging and indexing data.
Plus, there are issues like finality, chain reorganizations, or unconfirmed blocks to get in the way. To solve this, The Graph has created a hosted service that helps to index blockchain data in a very organized manner. These indexes are called “subgraphs”, and could then be queried at speed using The Graph's own GraphQL open-source API. Anyone can easily build and publish subgraphs, which could then be defined as certain event mappings or which smart contracts to use, and so on.
These parameters are called ‘subgraph manifests', where The Graph can learn how to properly index Ethereum data. These manifests are immutable and are thus deterministic to provide queries that can be reproducible and are reliable. There are numerous other benefits, such as lowering the cost and time overhead of developers who once needed to develop their own propriety indexing servers, enhancing security and data reliability, as well as adding a layer of cross-chain interoperability.
The Key Players In The Graph
On that latter point earlier in our The Graph review, their protocol is adopted by hundreds of dApps across Ethereum, and now adding the Polygon, BSC (Binance Smart Chain), Avalanche, Fantom, Celo, xDAI, and POA networks. Having now learned how The Graph has created a system where dApp developers can store, index, and access data with ease, we should turn to look at all the many key participants within The Graph's network that make it all happen, aside from the developers…
Indexers – They stake GRT tokens (more on that later) to become node operators on the protocol, where they could provide indexing and querying processing services. Indexers can earn fees for querying data, as well as additional rewards for their services.
Curators – These can be subgraph developers, data consumers, volunteers, or community members who signal to the Indexers on which APIs should be indexed by the protocol, where they could also be rewarded for helping to curate data on The Graph.
Delegators – Like a Delegated Proof-of-Stake (dPoS) system, Delegators can delegate GRT tokens to node validators (Indexers), who would otherwise like to help secure and power the network, but are unable to run a whole node by themselves.
Consumers – The end users of The Graph's protocol, where they can query subgraphs for answers or access to data, who would then pay a query fee to the Indexers, Curators, and Delegators, for their services.
What Else Could The Graph Do?
Aside from developing open-source APIs for dApp developers, and having created an entire global indexing solution for blockchains, they do indeed have other products and services. One of which is Graph Explorer, where you can explore the many subgraphs that are online, while also giving you the chance to interact freely with the protocol. The other is the Subgraph Studio, where developers can create and publish subgraphs, as well as various API keys.
Speaking of subgraphs, we hinted earlier in our The Graph review on its GRT tokens. Built on Ethereum, GRT is thus an ERC-20 utility token, and it does have a lot of uses within the Graph that we should uncover before we move any further. Here are some of the ways that you can use The Graph's GRT tokens within its indexing protocol…
Staking – As we've learned earlier, Indexers need to stake a set amount of GRT tokens to set up, and run a node to validate block creation and validation for all transactions through the network.
Deposit – Curators need to deposit GRT tokens into a bonding curve, where they can then access the ability to signal on which specific subgraphs could be indexed. They could then earn a portion of the query fees in GRT.
Delegation – Delegators can contribute to the network by delegating GRT tokens to exist Indexers of their choosing. They can later earn a portion of both the querying fees and additional indexing rewards in return.
Payment – As consumers and developers use The Graph's indexing and querying services, they'll be required to pay set fees to the Indexers, Curators, and Delegators that help to run the protocol.
What Are The Graph's Native GRT Cryptocurrency Tokens?
The native cryptocurrency of The Graph, as we've explored already, is the GRT token. We've also discussed how GRT may be used to provide indexing and querying services, as well as functioning as an incentive tool to reward its network participants. As for those fees, they are judged by a metered usage model through the use of specialty payment gateways. There is also a rebate pool at work that rewards all network users based on their overall contributions to the network.
To ensure the security of the protocol, staked GRT tokens have a thawing mechanism that can be slashed if Indexers prove to be malicious by serving data incorrectly, intentionally, or otherwise. As for The Graph's tokenomics, the original main-net launch is capped to 10-billion GRT tokens, though there is a 3% inflation rate for new token issuance in the form of indexing rewards. In mid-2020, The Graph held funding round and an ICO, which raised $7.5-million and $12-million, respectively.
There's also a burning mechanism, where a portion of the query fees – roughly 1% of the total fees in the network – are burnt. The withdrawal tax collected for Curators and Delegators to withdraw their GRT tokens will also be burnt. As of this The Graph review, GRT is valued at $0.653925. With a circulating supply of 2,897,903,422 GRT – out of 10,057,044,431 GRT in total, counting for inflation – GRT has a market cap worth $1,895,010,767, making The Graph the 48th-most valuable token.
Future Roadmap, And Conclusion
At the time of writing this The Graph review, they've had a flurry of new announcements, such as its acquisition of the multi-chain development platform, StreamingFast, and news that its curation program is now open to the public. Right now, there are more than 2,000 Curators at work, along with 210 Indexers around the world. This is on top of plans to continually tweak its already speedy indexing system, such as allowing developers to query fully encrypted data.
So far, it looks like smooth sailing for The Graph, having hosted and processed more than 20-billion queries as of April 2021 – a 20x growth in less than a year since it went live in June 2020. It's quite astounding to see the rate of growth that The Graph has witnessed in such as short span of time, empowering the idea that structured and fast indexing (and querying) systems such as that built by The Graph are in high demand right now as blockchains continue its pursuit for mass adoption.
The Graph Review
Monetary abilities, and tokenomics model
Long-term sustainability, and roadmap updates
Ease of use, and seamlessness of integration
Feature sets, technologies, and overall solutions
Project values, and mission
- Supremely fast and efficient indexing system for dApp developers to store, manage, and query data with.
- Its ‘subgraphs' (or open APIs) are open-source and are easily accessible and programmable.
- Enables dApp developers to lower the costs as they no longer need to develop and operate dedicated indexing systems.
- Improves the reliability, performance, and security of data querying, and data management.
- Enables interoperability between dApps and data across multiple different blockchain networks.
- Is already widely adopted and used across countless dApps from DeFi, NFTs, governance platforms, marketplaces, social network dApps, and more.
- The on-chain structure isn't as lean enough, with things like the thawing mechanism adding some cost and complexity for network participants.