Overview
The Graph is a decentralized protocol for indexing and querying data from blockchains, starting with Ethereum. The Graph allows query data that is even difficult to query directly.
Some projects with complex smart contracts like Uniswap or Bored Ape Yacht Club store data on the Ethereum blockchain, making it very difficult to read information other than basic data. In the case of Bored Ape Yacht Club, users can perform basic read operations on the contract like getting the owner information of a certain Ape, getting the content URI of an Ape based on its ID or total supply. However, they cannot query and perform more advanced operations such as aggregation, searching, checking relationships, and creating filters. That is, if users want to query those Ape owned by a certain address or filter by one of its characteristics, they won’t be able to get that information by directly interacting with the smart contract itself.
Blockchain properties like finality, chain reorganizations, or uncled blocks complicate this process further, and make it not just time consuming but conceptually hard to retrieve correct query results from blockchain data.
The Graph aims to extract, statistics, filter and organize data from different protocols. As a result, users can easily access and use data sources. Meanwhile, developers can retrieve data such as token prices and adapt to their applications.
How does it work
The Graph works by learning what and how to index data on Ethereum based on subgraph descriptions or subgraph manifest. In a subgraph manifest, The Graph will define smart contracts of interest for a subgraph, the events in those contracts to pay attention to, and how to map event data to data that The Graph will store in its database.
Once developers have written a subgraph manifest, they will use the Graph CLI to store that information into IPFS (Interplanetary File System) and The Graph’s algorithm will start indexing data for that subgraph.
The process follows these steps:
- A decentralized app adds data to Ethereum through a transaction on smart contracts.
- Smart contract emits one or more events while processing the transaction.
- The Graph Node constantly scans Ethereum for new blocks and data for the Subgraph they may contain.
- Graph Node finds the Ethereum events for that Subgraph in blocks and runs the Mapping handler provided by the app developer. Mapping is a WASM module that creates or updates data stored by the Graph Node, corresponding to events on Ethereum.
- Next, the decentralized app can query the Graph Node for indexed data from the blockchain by using GraphQL API. The Graph Node, in return, translates the GraphQL queries into queries for its underlying data store in order to fetch this data, making use of the store’s indexing capabilities. The decentralized app will display this data in a user-friendly interface, which they can use to make new transactions on Ethereum. Finally, the cycle will be repeated.
Components
Indexers: are node operators in The Graph Network. They will stake Graph Tokens (GRT) in order to provide indexing and query processing services. Indexers earn query fees and indexing rewards for their services. They also compete with each other to provide the best service at the lowest price.
Curators: are Subgraph developers. They sort data and signal which subgraphs are useful and accurate. Curators can earn GRT by doing this.
Delegators: are network participants who delegate GRT to one or more Indexers. Delegators contribute to securing the network without running a Graph Node themselves. Delegators can delegate their GRT tokens to Indexers to earn a portion of the Indexer’s query fees and rewards.
Consumers: The Graph’s end users. They use the data query service provided from Indexers and fees will be shared proportionally to Indexers, Curators, Delegators. Consumers can be other developers or projects that want to query data from the blockchain for their apps.
Highlights
Reliable and safe
The Graph is a protocol used to restructure blockchain data, making it more accessible. The protocol is currently providing data for many apps in the DeFi and Web3 ecosystem.
The Graph will receive query commands from users and then collect, analyze and aggregate data without any interaction with third parties. The development team claims that they will make querying data faster, more reliable and more secure.
Easy to join
Anyone can build and publish Subgraphs. Subgraphs make it easy for developers to build new projects on the blockchain. What Google has done with the search engine, The Graph will do the same for blockchain. Currently, The Graph’s hosting is processing more than 4 billion queries monthly for apps like Uniswap, CoinGecko, and Synthetix.
Professional team
The Graph;s development team are all seasoned experts from large organizations and companies such as Ethereum Foundation, Puppet, Redhat and Barclays PLC.
Smart token supply mechanism
The project’s native token, GRT, plays an important role in The Graph’s economy. This economy has the contribution of different components such as Indexer, Curator and Delegator. Indexers, after staking GRT, will operate The Graph’s nodes and earn money once a query is processed. Curators decide what information it needs to index and will get paid for it. Delegators receive a portion of money from Indexers they delegate even if they don’t directly launch nodes.
The development team is also working on support for Layer-1 blockchains like Bitcoin, Polkadot and NEAR protocol, making all information retrievable.
Tokenomics
GRT is the native token of The Graph and to hold key roles on the network such as Indexer, Curator, and Delegator, users must stake GRT. Staked GRT is also used as an insurance cost for operations on the system. Once an Indexer shows signs of fraud in providing and statistical data, they will be penalized by deducting the staked tokens.
Total GRT supply at mainnet launch will be 10 billion tokens, and new token issuance in the form of indexing rewards will begin at 3% annually and is subject to future independent technical governance. In addition, a portion of protocol query fees are burned, expected to start at ~1% of total protocol query fees and subject to future technical governance.
Potential of GRT
GRT is attracting a lot of attention and is in the top 50 cryptocurrencies with the highest total market capitalization in the crypto market. The Graph has a partnership with many well known names in the market like CoinGecko, Aave, Decentraland, Synthetix and more. The project is backed by large investment funds such as Multicoin Capital, Framework, Coinbase Ventures and Digital Currency Group.
Although The Graph is still a new project, many platforms have already started retrieving data through Subgraph. If The Graph can sustain this growth, it could be one of the key projects in the blockchain field in the coming years.