About The Graph (GRT)

What is The Graph?

The Graph is a decentralized protocol that enables efficient querying of blockchain data. Blockchains like Ethereum store data that is difficult to directly query beyond basic operations. Projects with complex smart contracts like Uniswap and NFT initiatives like Bored Ape Yacht Club store data on-chain that cannot be efficiently filtered, aggregated, or searched directly.

The Graph solves this by indexing blockchain data and enabling developers to publish open APIs called subgraphs. These subgraphs can be queried with GraphQL to return specific filtered data quickly. This makes it easy for decentralized applications to access indexed blockchain data without needing to process entire blockchains or set up their own indexing infrastructure. The Graph has a hosted service and an open source protocol that provides the same capabilities. Both are backed by Graph Node software.

In summary, The Graph fills a critical need for a decentralized indexing and querying layer to make blockchain data efficiently accessible. This unlocks the potential for more useful decentralized applications across industries like finance, collectibles, and gaming.

History of The Graph

Early Development (2017-2018)

The idea for The Graph was conceived in late 2017 by founders Yaniv Tal, Jannis Pohlmann, and Brandon Ramirez, who had previously collaborated on software startups. They built an initial prototype in 2017 with the goal of making it easier for developers to build sophisticated blockchain applications.

Testnet Launch and Community Growth (2019-2020)

The Graph launched its hosted service and Graph Explorer in January 2019 with 7 partners. By July 2020, it was processing 50 million queries per day from hundreds of applications. Key launches in 2020 included the incentivized testnet Mission Control in July and the Curator Program in September.

Mainnet Launch (2020-2021)

The Graph held a $12 million public token sale in October 2020 prior to launching mainnet in December 2020, with GRT listed on major exchanges.

Growth and Expansion (2021-Present)

The Graph gained significant traction within the Ethereum ecosystem, becoming a fundamental tool for developers building DAPPs on the Ethereum blockchain. By mid-2023, the protocol has expanded its support to other networks like IPFS, Polygon, Avalanche, Arbitrum One, Gnosis, and Celo, enabling developers to index data from multiple blockchains. In June 2023, The Graph announced to be migrating its settlement layer to Arbitrum for Ethereum.

Throughout its development, The Graph has focused on making blockchain data easily accessible for developers. After launching its hosted service in 2019 and mainnet in 2020, it continues to expand support to additional chains and fund development through grants. Adoption has steadily increased, with over 22,000 subgraphs deployed as of early 2022.

How Does The Graph Work?

What Info is Indexed by The Graph?

The Graph indexes various types of blockchain data, including:

• Smart contract events: The Graph indexes and processes event data emitted from smart contracts, making it accessible for querying and analysis.
• Blockchain transactions: It organizes and stores transaction-related information in a way that is optimized for searching and querying, providing developers with access to data through APIs provided by GraphQL and other web3 protocols.

How Does The Graph Index Ethereum Data for DAPPs?

The Graph indexes Ethereum data based on developer-created subgraph descriptions called the subgraph manifest. This manifest defines the smart contracts to index, events in those contracts to track, and how to map event data into The Graph's database.

Developers write the subgraph manifest then use the Graph CLI to store it on IPFS and notify The Graph indexer to start indexing data for that subgraph.

Once deployed, the data flow is:

1. A DAPP issues a transaction on a smart contract, which emits events while processing.

2. The Graph Node continuously scans Ethereum for new blocks that may contain data for tracked subgraphs.

3. The Graph Node detects relevant Ethereum events and runs mapping handlers from the subgraph manifest. These map events to entities stored and updated in The Graph's database.

4. The DAPP queries The Graph Node's GraphQL endpoint for indexed blockchain data. The Graph Node translates the GraphQL into database queries to fetch the data.

5. The DAPP displays the data in its UI for users, who can then issue new transactions, restarting the cycle.

In summary, developers deploy subgraph manifests to dictate what data The Graph indexes. The Graph Node scans Ethereum, maps events to database entities, and provides a GraphQL API for DAPPs to query indexed blockchain data.

What Products do The Graph Have?

The Graph has three main products :

• Graph Explorer allows developers to discover indexed blockchain data and query it for their DAPPs. Key features include querying data, viewing logs, managing subgraphs, and toggling between versions.
• Subgraph Studio enables users to build, test, and publish subgraphs and manage API keys. Users can create subgraphs via the UI or CLI, restrict API access, and publish to the decentralized Explorer.
• The Hosted Service is being phased out to enable fully decentralized data retrieval.

Overall, The Graph's products empower developers to access blockchain data for DAPPs. Graph Explorer and Subgraph Studio facilitate discovery and development, while the Hosted Service is transitioning to a decentralized network in the near future. The tools offer features like querying, logging, access management, testing, and publishing to make blockchain data useful for applications.

Who Fuels The Graph's Data Ecosystem?

The Graph network has several roles that work together to build a decentralized protocol for organizing and querying blockchain data:

• Consumers pay query fees in GRT to access data indexed by the network. They are typically DAPP developers building on blockchains like Ethereum, but can also be services aggregating data for end users.
• Indexers operate nodes that index blockchain data into databases as specified by subgraph definitions. They earn query fees from consumers and inflationary rewards from the protocol for their services. Indexers require technical expertise in running reliable distributed systems.
• Curators signal which subgraphs provide valuable data to index through staking GRT in bonding curves. They earn a share of query fees proportional to their signal. Curators tend to be subgraph developers, data consumers, or community members incentivized to curate high-quality subgraphs.
• Delegators stake GRT on behalf of Indexers to receive a portion of rewards without running a node themselves. They select Indexers to optimize financial returns based on metrics like fee rates and uptime.
• Fishermen help secure the network by checking result accuracy. They are motivated by altruism rather than financial rewards. The Graph will initially operate a centralized fisherman service.
• Arbitrators resolve disputes over potential indexer slashing. They rule based on incentives around accuracy and uptime rather than direct financial rewards.

Token Economics

Token Utilities

GRT is an ERC-20 token used to allocate resources and incentivize participants in The Graph network.The token utilities are strongly tied to protocol roles.

Indexers stake GRT to provide indexing services and earn query fees and inflationary rewards proportional to their stake. Curators stake GRT in bonding curves to signal on subgraph quality and earn a share of query fees based on their signal. Delegators stake GRT on behalf of indexers to earn indexing rewards without running a node. Consumers pay query fees in GRT to access indexed data.

A portion of fees are contributed to a rebate pool and distributed as rewards based on relative contributions, incentivizing optimal stake allocation. GRT stake is slashable for malicious behavior and subject to a deposit tax on withdrawals. Some query fees are burned along with unclaimed rebates and deposit taxes.

Overall, GRT aligns incentives around securing the network, providing accurate data, and optimizing capital allocation through staking, fees, rewards, slashing, and burning.

Token Distribution

The initial GRT supply is 10 billion, with a 3% annual issuance to reward Indexers. This increases total supply by 3% yearly for Indexers' contributions.

The Graph has multiple burning mechanisms to offset issuance. Approximately 1% of supply is burned annually through network activities. These include a 0.5% delegation tax when Delegators delegate to Indexers, a 1% curation tax when Curators signal on a subgraph, and 1% of query fees burned.

GRT also has a slashing mechanism to penalize malicious Indexers. If an Indexer is slashed, 50% of their epoch rewards are burned, and 2.5% of their self-stake is slashed, with half burned. This incentivizes Indexers to act in the network's best interests and contribute to security and stability.

Why Is The Graph (GRT) Valuable?

One of the key features that make The Graph valuable is its ability to make blockchain data easily accessible . It uses GraphQL to index and query blockchain data, making it more efficient and user-friendly . This allows developers to easily retrieve the specific data they need from the blockchain, saving time and resources .

Another unique aspects of The Graph is its compatibility with various blockchains and protocols . It is not limited to a specific blockchain, which makes it versatile and adaptable to different environments. This flexibility enables developers to build applications that can interact with multiple blockchains, expanding the possibilities for decentralized applications .

Additionally, The Graph has seen massive growth in the usage of Layer 2 solutions, such as Arbitrum, for improved scalability and cost-effectiveness . By migrating to Layer 2 solutions, The Graph reduces transaction fees and improves transaction speed, making it more accessible and efficient for developers and network participants.

Furthermore, The Graph is designed to incentivize network participants through various roles, such as developers, delegators, curators, and indexers . Users can generate passive income by participating in these roles, contributing to the security and functionality of the network . This incentivization model promotes decentralization and community involvement, making The Graph a truly decentralized protocol.

Last but not least, The Graph is widely used in the decentralized finance (DeFi) space, where it simplifies the process of retrieving and interpreting blockchain data. It enables developers to build serverless applications with their entire stack running on public infrastructure, extending the use of blockchain networks beyond smart contract processing. The Graph also has applications in other areas such as governance protocols, marketplaces, and fraud detection

Highlights

In January 2019, The Graph launched its hosted service and Graph Explorer with 7 launch partners.

By July 2020, The Graph was processing over 50 million queries per day.

In September 2020, The Graph launched its Curator Program with partners like CoinGecko, Messari, and Synthetix.

On December 17, 2020, The Graph announced its mainnet launch, followed by exchange listings on Coinbase Pro and Binance.

In February 2021, The Graph expanded support to Polygon, Polkadot, NEAR, Solana, and Celo.The Graph has continued expanding integrations, such as Optimism in June 2021.

March 2022, The Graph has deployed over 22,000 subgraphs and has over 2,000 curators, 7,000 delegators, and 160 indexers. This demonstrates the growth and adoption of The Graph's decentralized query protocol.

In June 2023, The Graph announced migrating its settlement layer to Arbitrum.