Posted on 22nd October, 2021
Overview:
The Graph Token is an ERC20 token that serves as an internal payment method. As a result, the GRT token is used to settle incentives for indexers, delegators, and curators. GRT is required by consumers to pay for data queries.
The CMP is $0.921 as of 22nd October 2021.
What is The Graph ?
The Graph is aa decentralised protocol for indexing and accessing blockchain data. The Graph indexes blockchain data from networks like Ethereum and Filecoin in the same way that Google indexes the web. This information is organised into subgraphs, which are open APIs that anybody may use to query.
Why The Graph matters and its problem solving capabilities
The project is a decentralised Oracle solution that collects data from blockchains and analyses it for later usage. Subgraphs, which can be comparable to an application programming interface, are utilised (API). To obtain the data, they may be integrated into a variety of programmes.
The goal of the Graph is to retrieve and prepare data from various protocols (e.g., Ethereum or Filecoin). Users will have simple access to data sources and will be able to use the information immediately as a result of this. Developers may get this information (for example, token pricing) and utilise it in their apps.
- Indexers:- Those wishing to provide data must operate their own node. The GRT token is required for this, which node operators can get. If a supplier delivers inaccurate or incorrect data, he will be penalised and a portion of his deposit will be forfeited. As a result, the service provider attempts to sell only accurate data.
- Curators:- Curators determine if a source is reliable and delivers useful information. They tell indexers which subgraphs in the network should be indexed. They accomplish this by placing GRT tokens in the appropriate subgraph. They are then paid a portion of the fees.
- Delegators:- Delegators are participants who contribute to the network’s security by depositing shares in indexers. They do not, however, have to run their own node; instead, they can join one that already exists. In exchange, they may receive a portion of the node’s fees.
- Consumers:- End-users who wish to buy qualitative data are referred to as consumers. Trading platforms and decentralised apps are examples of this. They pay indexers and then use APIs to integrate the data into their application.
Fundamentals of The Graph
The Graph acts as a kind of marketplace for specialised data on Ethereum. The Graph Explorer may be used to view each data set on this marketplace, which is referred to as a Subgraph.
You may think of it as the textbook equivalent of utilising bookmarks and a highlighter. Every subgraph description is duplicated and saved on IPFS, Filecoin’s decentralised data storage layer (FIL).
Graph Explorer now allows app developers to quickly obtain the data they require for their apps using Graph QL, the company’s own straightforward querying language. When a developer makes a data request, the Graph Network’s indexes are used. To discover the information you’re looking for, go through relevant subgraphs. Indexes use a signal called a curations signal to determine which subgraphs to extract material from. Curators provide this service by creating subgraphs and evaluating their quality.
Index has also been rewarded with GRT tokens for inflationary indexing. Delegate a steak GRT to let the Graph Protocol know which indexes to use to collect data for developers to guarantee that indexers do not overpay developers for their services.
For this service, delegators receive a share of query costs and indexing incentives. Indexes must stake GRT tokens to guarantee that they execute their job. Even if the indexer gives erroneous data or indexes a portion of their state incorrectly, the state can be sliced. Curators must stake GRT on a subgraph bonding curve, which is the curatorial signal utilised by indexes, to guarantee that they are guiding indexes to the highest quality material.
The most important conclusion is that the bonding curve encourages curators to be the first stakeholder on a new subgraph. They feel it has high-quality data. This is because curators get a share of the query costs paid to indexes, and owing to the bonding curve, curators who staked the earliest on a subgraph being searched will get more of the query fees allotted to curators. Curators, unlike indexes, will not be fired for poor behaviour.
Use case:-
- GRT is used by Curators to signal subgraphs that are worth indexing. Through the Explorer, curators are able to view network data to make signalling decisions. The Graph Network rewards curators that signal on good quality subgraphs earn a share of the query fees that subgraphs generate.
- It is staked by Indexers to keep their incentives in check.
- People who own GRT tokens, but don’t want to be Indexers and run the GRT node, can become Delegators and earn a portion of Indexers reward. Indexers select subgraphs to index based on subgraph’s curation signal, where curators stake GRT in order to indicate which subgraph are high-quality and should be prioritized
- The Graph is already used by other popular projects such as Uniswap, Synthetix, Decentraland and Aragon.
Tokenomics
Token Symbol : GRT
Token Name : Graph Token
Initial Token Supply : 10 billion GRT (initial)
Annual Issuance : approximately 3% (for year 1)
Annual Burn : around 1% of query fees & taxes
Max Token Supply : 10 million minted + New issuance – Burning
Competition Analysis
Team, Media & Community strength
Graph was launched in 2018, founded by electrical engineer Yaniv Tal, computer scientist Jannis Pohlmann, and roboticist Brandon Ramirez.
Their media presence seems to be growing significantly with over 150K Twitter followers and over 25K Telegram members.
Conclusion
The Graph has been online since December 2020 and already has a large following. Unlike many other cryptocurrencies, some of which are much more valuable, GRT can already help to build the crypto ecosystem.
Pros:-
- Decentralization:- Finding fully decentralised enterprises is a huge difficulty in the crypto realm. One of these initiatives, The Graph, is a centre for genuinely decentralised application development.
- Increased security:- The Graph has a high level of security. This is critical in establishing a network that consumers can trust.
Cons:-
- Token holders have no say in issuance:- While token holders play important roles like indexers, curators, and delegators, they have no say in GRT issuance or other parts of the network’s economy. This is seen as a possible threat to the network as a whole.
- GRT tokens have a limited quantity, making them unsuitable as a currency. This is OK, though, because the network was designed to support developers rather than transform the token into a currency.
MintingM rating for The Graph: 3.95/5
| Criteria | Score |
| Industry | 4.00 |
| Opportunity Size | 4.00 |
| Competitive advantage | 3.50 |
| Tokenomics | 4.25 |
| Team | 4.00 |
| Overall Score | 3.95 |
Important links and sources:-