The Graph (GRT)

What is The Graph?

The Graph is a protocol for querying other blockchains and storage networks. The project makes it possible to create server-less applications. The decentralized network is able to index and process queries without any central control. This is made possible with the help of the many actors on the network which include Indexers, Curators and Delegators.

The role of the network for blockchains is similar to what a search engine does for websites. With the help of The Graph, developers are able to query different blockchains. This grants them access to information that is relevant for developing the applications they are working on. The information includes those from many blockchains that already power DeFi and Web3 applications.

The main focus of The Graph is to bring different actors in the blockchain space to work together seamlessly by providing a decentralized indexing protocol. The project has a fast growing community of developers and users who are helping to achieve the cause of a decentralized internet.

A significant contribution that The Graph is making, is that it removes the need for custom servers. Building these servers required a lot of engineering effort on the part of developers. It also requires a significant amount of hardware and real decentralization is compromised in the process. With The Graph, all information is stored and processed on highly secured public networks and can be queried in a fast, reliable and secure manner.

How does The Graph work?

The Graph is used for querying networks such as Ethereum and IPFS. The querying can be done by anyone when they build and publish open APIs known as subgraphs. The subgraphs can be organized into a larger global graph containing global public information. The collected information is then shared across applications and can then be easily queried by anyone.

By combining the information from the many blockchains, developers can build dApps with improved capabilities to improve living.

The Graph works with a number of participants to make sure things run smoothly. The players include:

Indexers

These are node operators on the network. They stake their GRT tokens to provide indexing and querying services. To provide the services, they choose subgraphs that they wish to index based on the subgraph’s curation signal. They then decide which subgraphs are high quality and should be given priority.

In return, they are paid query fees and indexing rewards. Indexers also earn from a Rebate Pool in proportion to their contribution to the network, using Cobb-Douglas Rebate Function.

GRT staked by indexes are held for a certain length of time, during which it can be slashed if indexers provide incorrect data to applications. Such penalty can also be meted out if they index incorrectly.

Curators

This group is made up of subgraph developers, data consumers or community members who help indexers to determine which subgraphs to index. They do this by sending signals to indexers based on which indexers prioritize the subgraphs to index. Unlike indexers who stake their GRT, curators deposit their GRT into a bonding curve. They then signal on a subgraph and are paid a percentage of query fees for the subgraph.

Curators are able to determine the highest quality subgraphs through their knowledge of the web 3.0 ecosystem. They also use information such as the most used applications, the most trusted data sources and the fastest growing communities to determine the highest quality subgraphs. The higher the quality of curated subgraphs, the higher the query fees. This serves as an incentive to make curators gather only the best quality subgraphs.

Delegators

Deligators help to secure the network by delegating stakes to indexers. They don’t need to run a Graph Node, but earn part of query fees from indexers they delegate to. Selection of which indexers to delegate to is based on a few factors, including query fees, past slashing, uptime and how much fee they get from the indexer.

Delegators who make poor decisions that could harm the network are punished by imposing a deposit tax rather than slashing stakes as is the case with indexers.

Features of The Graph

• Global: Subgraphs come together to form one global graph of the world’s public data. This makes it easier for anyone to query regardless of where they are.
• Interoperability: The Graph deals with decentralized applications. It allows developers to switch effortlessly between dApps.
• Reliability: The Graph is guaranteed to run forever regardless of what happens in the future.
• Own your identity: The Graph allows users full control of their identities, data and reputation.
• Security: Users are guaranteed of full security which is a concern on the internet right now. The network is safe, secure and private.
• Community governance: Members of the community have a voice in the running of the network. They play different roles which together keep the network running.
• No need for custom servers: With The Graph, developers don’t need to invest time and resources to build custom servers. Data is rather shared on secure public networks.

What are the governance protocols of The Graph?

The governance protocol of The Graph uses the Decentralized Autonomous Organizations (DAOs) protocol, Voting Tools, evolving consensus mechanisms and more.

DAOs are scalable and self organized blockchain setups. This means that The Graph runs with the help of smart contracts and is governed partly through the rules embedded in the codes used to design the network. There are currently 66 projects providing DAO tools and services on the network.

There are also voting tools which support decentralized governance. These include signalling tools, coin votes, e-voting, and other voting mechanisms. There are currently 22 projects providing voting tools on the network.

What is the main purpose of GRT on The Graph network?

• Governance: The number one purpose of GRT token on The Graph network is governance. Indexers have to stake their GRT tokens on the network to get to be able to provide their services. The staked tokens are used as insurance to ensure indexers do their jobs well.
• Rewarding network actors: GRT is used to reward actors such as indexers, curators and delegators to keep the network running.
• For fee payment: Those who use The Graph network to query blockchains have to pay fees for the services. These fees are paid in GRT which is then used to incentivize those securing the network and making sure the best quality information is obtained during queries.

Pros of The Graph

The Graph is a unique project that has several advantages to it. Some of these are:

• Decentralization: One major issue in the crypto space is finding truly decentralized projects. The Graph is one of such projects and a hub for truly decentralized applications development.
• Building of next level apps: On The Graph, the stage is set for developers to build next level apps that will revolutionize the way humans interact on the web. This is significant as the network is accessible globally with anyone having capacity to query any blockchain through it.
• It is interoperable: The Graph allows users to easily switch from one app to another. This is known as interoperability and it is a critical feature of blockchain projects that give developers leverage to build exceptional projects.
• Improved security: The Graph boasts of high security. This is crucial in building a network that users will have confidence in using.
• Decentralized governance: The Graph governance protocol gives users a voice by allowing them to participate in the process of governance.
• Reliable network: The Graph is built to ensure that dApps will run eternally no matter what happens in the future. This makes it a very reliable network for developers to build dApps for future use.

Cons of The Graph

• Token holders don’t determine issuance: Although token holders play critical roles such as indexers, curators and delegators, they do not determine the issuance of GRT and other aspects of the network’s economy. This is perceived as a potential risk to the network in general.
• Capped supply: The capped supply of GRT tokens makes it unsuitable as a currency. This is okay though, as the network was built for developers to thrive and not to turn the token into a currency.

In summary

The Graph is one of the cryptocurrency projects helping to make the blockchain space more accessible to developers. Like other developer-centered projects, it gives users the ability to work on projects of their choice by bringing the strengths of different blockchains together, to build the kind of projects they want and that is key to a future that involves a decentralized web.