Imagine reading 1000 pages of a book and then forgetting where you left because of a missing bookmark. You have to skim through a lot of pages before you continue reading it again. That was the case with data stored on blockchains before the arrival of the Graph crypto. It took hours or even days for DAPPS and smart contracts to fetch query-based data from the database because of the missing indexing feature and data assortment.
The Graph crypto is here to simplify the way web 3 applications access the data from decentralized storage systems. Many crypto enthusiasts call it the Google of blockchain which solves the problem of accessing quality data in the fastest time possible.
But, is it really the Google of blockchains or it’s just hype? Find out everything you need to know about the Graph – its use case, how it works, the Graph price prediction and more –
What is The Graph Crypto?
The Graph crypto is an open-source, decentralized protocol built for DAPPS and smart contracts that help retrieve skewed data by querying and indexing the database, stored in a decentralized manner (IPFS) on the blockchains, starting with Ethereum.
Take for example, it’s easier for DAPP to run a basic operation of collecting the data that represents the total volume of transactions on the Uniswap exchange for the given year. However, without using the Graph protocol, it will be difficult to fetch specific data that require rank wise transactional volume of all the ERC20 tokens on the Uniswap exchange for the first week of every month on 12 months period. It will take hours or days to get this information from within the blockchain without using the Graph protocol.
What Chainlink crypto protocol does off-chain, the Graph crypto protocol does on-chain
History of The Graph Protocol:
In 2017, three tech-savvy individuals tried creating dapps on the Ethereum blockchain but weren’t impressed with the time it took to retrieve query-based data from the database. They wanted an application that can provide the data faster and accurately as done by the services in the centralized system. This idea gave birth to the Graph protocol.
The Graph protocol was founded in 2018 by Yaniv Tal, Jannis Pohlmann and Brandon Ramirez. With prior experience in creating developer tools, they jumped on building the Graph for the Ethereum blockchain. The project is funded by top firms like Coinbase and Multicoin capital amassing an estimated investment of approximately $25 million.
What is The Graph Coin GRT?
The Graph coin or GRT is an ERC20 token of the Graph protocol. It is the currency of the network which is used by the network participants in different capacities. GRT is an inflationary currency with an inflation rate of 3% per year (It will lose 3% of its value every year if the holders don’t stake it). On a positive note, the token goes through several burning processes.
1% of the query fee goes towards burning GRT, any unclaimed reward from the rebate pool distributed to the network participants also gets burnt in a timely manner. This makes it somewhat deflationary if there’re good number of queries on the network (Graph explorer).
At the time of writing, GRT is primarily used for staking and reward distribution. The protocol will soon introduce governance for GRT token holders. The staking procedure and reward distribution will be covered in the following part.
The total supply of GRT token is currently capped at 10 billion
How does the Graph work?
The functioning of the Graph protocol is quite straightforward. When a project uses the Graph, the protocol creates an API of the project which is called Sub Graph. The sub graph is then made available to other projects like DAPPS or smart contracts to query data in order to retrieve the required information. A project can have more than one sub graph which is similar to sitemaps on a website that are made available for indexing by the Google crawler. You can find the sub graphs on Graph explorer (shown below).
Graph explorer can be used by any project (highlighting data decentralization) to query the data using the Graph’s own programming language i.e GraphQL. Consider it like SQL programming language which is used for finding the relevant information from the database tables.
If Sitemap is for website, Graph explorer is for the blockchain project
Take for example, if i want data about the total LAND parcels sold on Decentraland (MANA) in the month of October along with the sale amount per LAND parcel. I can use Graph explorer to query the data using GraphQL and get the requested information in the fastest time possible.
Of course, the network will charge me query fee for its services. This process further calls for the introduction of network participants.
Indexers are the Graph node operators. They are responsible for providing the indexing and query services to the consumers on the network. It is mandatory to stake at least 100k GRT tokens in order to become an Indexer.
Staking rewards the Indexer and keep them in check by slashing the stake in an event of faulty node response i.e incorrect indexing or false information. Coming to the incentive part, Indexers earn query fees and indexing fees along with rewards from the rebate pool after the process completion.
Indexer must have supported hardware to qualify for this role
Curators are the sieve of the whole process. Curators signals the Indexers to confirm which subgraphs should be indexed for the required query. It’s like selecting the right URL from the website sitemap that contains the required information searched by the user on Google search. Curator uses GRT tokens to signal its message to Indexer by depositing it on the bonding curve. He will be taxed at the time of withdrawal of these tokens.
For their service, Curator earns a portion of the query fee. They are also rewarded for finding the most relevant subgraph in the best possible time. Therefore, curators are mostly developers who know which subgraph to push or a highly skilled person who has in-depth knowledge of the complete ecosystem.
Curator uses The Graph explorer to find the relevant information and decide if it fits the bill.
Delegators: (User Staking)
Delegators are GRT investors or GRT holders who staked their tokens on the selected Indexer. It’s like normal staking where the delegator will earn a portion of the query fee and indexing fee, decided by the respective indexer. Let me explain it from the image shared below –
In the image, the top Indexer is giving Delegator 50% of the query fee as reward and the bottom indexer is giving Delegator 84.93% of the query fee as reward. This will help you make better staking decisions.
Remember, Delegator will be charged 0.5% tax for delegating their tokens. By any chance, if a Delegator chose an untrustworthy Indexer, his stake will be frozen for a period of 28 days. Here’s a detailed article that will help you with the delegation process.
Delegator stake won’t be slashed for bad behaviour of the associated Indexer
Consumers are the end-users who pay the Indexers for raising the query. This is where the process initiates and the demand for the Graph protocol is generated. Consumers can be a developer, middle man or web service.
Fisherman & Arbitrators:
Fishermen are there to keep a check on the Indexers. Faulty Indexers are reported by the Fisherman who then signals the Arbitrator to the final call on penalizing the Indexer by slashing its GRT stake.
Fisherman plays similar role in the Polkadot crypto ecosystem
The Graph Crypto Products:
As explained earlier, Graph explorer helps find the subgraph to complete the given query. It is monitored by Curators.
It creates, manages and publishes subgraphs. Providing the related API key for connection.
It lets you create and explore Subgraphs on the hosted services.
The Graph Crypto ICO:
The public sale of GRT tokens took place in October 2020. 400 million GRT were put on sale with tokens priced at $0.03 each, raising a total of $12 million. There was an investor cap of $5000 and it’s worth noting, only 4% of the total GRT supply has been put on sale. The tokens were sold as PreGRT and has been converted to GRT after the mainnet launch, the same year.
The token distribution is shared below. Further details can be read here.
The Graph Benefits:
Better Query & Indexing services:
The Graph filled the missing link in the Web3 puzzle by indexing the database across multiple projects built on the Ethereum blockchain. It has made the on-chain data operations smoother and faster.
Staking & Network Rewards:
The network rewards all its participants by sharing part of the query fee and index fee for the respective roles. Rewards and staking are the part of financial incentives that attract the users to the network.
First Mover Advantage:
The project is in the right place at the right time. It has no competition and there’s no other project who’s even close to challenging its dominance in this space.
The Graph Drawbacks:
Poor Token Emission Schedule:
The total amount of tokens in circulation was tripled in six months from the launch. This has severely impacted the price action of GRT tokens by bringing in high supply and low demand, considering the age of the project.
Not yet Multichain:
The Graph Price:
Please check the latest Graph price, shared below –
The Graph Price Prediction:
Priced at just $0.03 in the ICO, the token has already rewarded the early adopters of the project. The project is promising but a poor emission schedule has deteriorated the momentum of the coin that made it nearly impossible for GRT to hold $1 spot for a longer period of time.
So far, the real growth has been observed in the bull run of 2021, where we witnessed the price go beyond $1.30 mark before crashing down to $0.70 per token in the crash of December 2021. Certainly, the currency is less volatile and may not post massive gains, especially in the short run.
Given the price action and the project expansion into the multichain ecosystem, it is safe to predict that the coin has the potential to break its previous high and aim for $3 mark when the market corrects itself. Do not have high hopes with GRT, unless it has something special for 2022. Well, that’s just my point of view as of now.
Where to buy The Graph Crypto?
Fortunately, GRT is an ERC20 token. That makes it available on centralized as well as decentralized exchanges. GRT can be bought on the popular centralized exchanges like Binance, Coinbase, KuCoin etc. When it comes to DEXes, it can be bought on Uniswap, SushiSwap crypto exchange and of course on 1INCH DEX aggregator.
Is The Graph worth Investing?
The strength of technology rests in the quality of data it collects and retrieves in the fastest time possible. Blockchain was missing this feature since the inception of the Ethereum blockchain that brought data hungry smart contracts and DAPPS looking for quality data to make ends meet.
All thanks to The Graph protocol, the blockchain may have just found its own search engine. The hype is real and Graph fits the bill. The success of Graph protocol totally depends on the adoption of blockchain technology, especially dapps and smart contracts.
It is ready to spread its wings on popular blockchains. However, if you’re looking for instant returns on your investment then Graph isn’t the best choice at this point in time.
The project is still in the Beta stage on several blockchains and has a surplus supply that deflates the price. Considering the best-case scenario, it will take at least 2-3 more years for GRT to surpass $10 mark. That’s my analysis for now. What do you think?
This completes my review of The Graph Crypto with price prediction. In the next post, I will cover AAVE Crypto, the lending protocol and Solice Crypto Metaverse. If you’re a fan of blockchain technology then please do share this post on your social handles and educate everyone around you. Do remember to subscribe to my YouTube channel for more informative content, released every week.
Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.
Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.