The Graph Protocol or The Graph is a one-of-a-kind indexing protocol for on-chain data stored in different decentralized systems like Ethereum or Filecoin. In coming months, it is set to integrate a variety of mainstream smart contract platforms like Solana, NEAR, Celo, Cosmos, Binance Smart Chain, Avalanche, Flow, and Polkadot.
Proposed in January 2019, The Graph Protocol started working with Ethereum mainnet in December, 2020. Its progress is backed by $5 million raised from Coinbase Ventures through a simple agreement for future tokens (SAFT), $2.5 million seed round led by Multicoin Capital and $12 million public sale of its core native asset GRT.
In February, 2021, The Graph team rebranded itself as Edge & Node. Led by Tegan Kline, Yaniv Tal, Eva Beylin, it includes a number of top-tier developers and mathematicians.
How The Graph works and who needs it?
The Graph protocol is a Web3 analytics and querying platform: it indexes data from various blockchains and rolls it up into the custom feeds dubbed ‘subgraphs’. Simply put, it provides readable API data streams for decentralized applications. Using The Graph makes it easier for developers to query the data via its patented GraphQL API.
The Graph allows dApps to receive and process sensitive data in an advanced manner. That’s why it is of a particular use for the high-load applications like decentralized exchanges, decentralized finances protocols for yield farming, lending/borrowing instruments, GameFi metaverses, and so on.
In Q3-Q4, 2021, The Graph usage spiked tenfold due to the increase of NFT and DeFi activity. In December, 2020, The Graph mechanisms processed 300 millions of ‘subgraphs’ daily.
Which dApps have already integrated The Graph?
As Ethereum is the first-ever platform that was integrated by The Graph, the top-notch Ethereum’s DeFis became its first mainstream users. Decentralized exchange DODO, distributed data network Livepeer, stablecoin protocol mStable, derivatives trading protocol Opyn, liquidity aggregator PoolTogether, non-pegged stablecoins’ creator Reflexer and UMA synthetic assets dashboard were the pioneers of The Graph usage.
The Graph mechanisms were also explored by Uniswap, Balancer, Aave and Synthetix, four most popular protocols of DeFi Summer 2020.
What is a GRT coin and how is it used?
The Graph Token (GRT) is a pivotal element of The Graph technology and ecosystem. Holders of GRT can participate in the most crucial operations, e.g. the processing and the verification of ‘subgraphs’.
GRT holders can participate in The Graph operations as either ‘Indexers’, ‘Delegators’ or ‘Curators’. ‘Indexers’ stake GRT coins in order to obtain the right to process queries to The Graph endpoints. Also, they choose subgraphs for the indexation. For their participation, ‘Indexers’ receive periodical rewards.
In turn, ‘Curators’ are in charge of the prioritization of subgraphs. They signal to ‘Indexers’ which subgraphs are the most important for dApps. ‘Curators’ receive query fees for their work.
Like in many systems based on staking, ‘Delegators’ just lock their tokens in favour of ‘Indexers’ to obtain periodical APY.
