March 7, 2023
6 min read
The Graph is an indexing protocol for querying data for networks and other blockchains such as Ethereum. The data is being used to power many applications both within DeFi and supporting the Web 3.0 ecosystem. It is a relatively new crypto currency that debuted at the very end of 2020. It can be used to build and publish open Application Protocol Interfaces (APIs). Within the Graph, these APIs are known as subgraphs. The subgraphs can be accessed by applications using GraphQL to retrieve blockchain data and then use this data for their own operations. The Graph currently supports indexing data from Ethereum, the Interplanetary File System (IPFS) and the POA Network. The Graph intends to add more networks that can be used for data collection. Let's get into some of the history of the Graph.
The graph has not been around a long time. It was officially launched at the end of 2020 in December. The graph is offering very new technology that could greatly enhance the blockchain and crypto currency ecosystems on a major scale.
The initial co-founding team includes Yaniv Tal, Brandon Ramirez and Jannis Pohlmann.The founders have engineering backgrounds and have worked together for 5-8 years. Tal and Ramirez studied electrical engineering at USC and worked together at MuleSoft, an API developer tools company that underwent an IPO and sold to the well-know major marketing platform, SalesForce.
They previously co-founded a developer tools startup together and have spent a significant portion of their careers working to optimize the API stack. At their last startup, the founders built a custom framework on an immutable database called Datomic. The Graph was born from this vision to create immutable APIs and data access, using the GraphQL query language, which was created by Facebook.
Speaking of GraphQL, this is the technology that is used to be able to access the dFcata that the Graph obtains from its unique data gathering services. We'll cover more of the technology in the technology section below.
The Graph token (GRT) is an ERC20 token, meaning it was created from the Ethereum Network. Since it is an ERC20 token, that means it can be used to collect data from any of the ERC20 tokens.
The Graph's mission is not to run a hosted API forever and ever, but rather to eliminate the possibility for APIs, servers and databases becoming single points of failure and control. The idea behind the Graph Network is to create an open marketplace of indexers and curators that work together to efficiently index and serve all the data for DeFi and Web3.0 in a decentralized way. As you may already know, Web 3.0 is all about decentralization and so is blockchain. Therefore, it is only natural that they work harmoniously together with each other to build out a decentralized network of APIs to feed Dapps around the world.
If you choose to get involved with the Graph, there are three supporting roles that you can take on.
Curators are a crucial part of the Graph economy: they are signaling on the subgraphs to be indexed by the network. Curators get rewards from the Graph Network for the signals on good quality subgraphs.
Indexers provide indexing and querying services for the chosen subgraphs. They are essentially Node operators that stake GRT to be able to do the indexing and querying.
Delegators stake (or delegate) GRT to the Indexers so that they can turn around and then stake that GRT and assist with running the network without having to install a node.
All of the users that are working in one of these roles are rewarded for their work on the Graph Network with a portion from the network fees that are collected from the transactions.
With that in mind, if the Graph is able to solve challenges that other blockchains are facing, then the Graph could become essential to linking up applications that are built on blockchain.
In this section we'll go over how value is generated and what mechanisms essentially drive the Graph. So the incentives are what drives most of the value generation. Let's examine that a bit more closely. There are 10 billion GRT tokens, with almost 7 billion in circulation.
GRT that are staked are subject to a thawing period and can be slashed, punished in other words, if Indexers are malicious and serve incorrect data to applications or if they index incorrectly, then they are slashed. This is a power balance check mechanism to ensure Indexers A) pay attention to details and B) don't act in a harmful way. Conversely, Curators and Delegators can't be slashed for bad behavior. However, there is a deposit tax on Curators and Delegators to disincentivize poor decision making that could harm the integrity of the network. Curators also earn fewer query fees if they choose to curate on a low-quality subgraph, since there will be fewer queries to process or fewer indexers to process those queries. This pushes them to look for quality and useful APIs to index and not waste time on useless ones.
Indexers that stake GRT operate inside of a query marketplace, where they earn query fees for indexing services and serving queries to subgraphs. In this case, they could be serving up data for any number of Dapps that require pricing data. So in this case they get the data from the Graph's decentralized subgraphs, instead of taking it from an API. Like many APIs, the data is not free and the same charge per use is under effect on the Graph. The Indexers can set the price to query the subgraph, based on the cost to index the subgraph, the demand for queries from that particular subgraph and, the amount of curation signal and the market rate for blockchain queries. Since consumers are paying for queries, the aggregate cost is expected to be much lower than the costs of running a server and database. Why you might ask? Because they don't have that overhead to run a server and database as you would classically find in this type of set up.
A Gateway can be used to allow consumers to connect to the network and to facilitate payments. These gateways facilitate connecting to The Graph Network. Anyone will be able to run their own gateways as well. Gateways handle state channel logistics for query fees, and route to Indexers as a function of price, performance and security that is predetermined by the application paying for those queries.
In addition to query fees, Indexers and Delegators can earn indexing rewards in the form of GRT. Indexing rewards will start at 3% annually. The Graph Network has epochs which are measured in blocks and are used for the Indexing Rewards calculations. But wait, there's more to all these rewards!
In addition to query fees and indexing rewards, there is a Rebate Pool that rewards all network participants based on their contributions to The Graph Network. The rebate pool is designed to encourage Indexers to allocate stake in a rough proportion to the amount of query fees they earn for the network.
A portion of query fees contributed to the Rebate Pool are distributed as rebate rewards. This reward has a built-in function that when Indexers allocate stake in proportion to their share of contribution of fees to the rebate pool, they will receive back exactly 100% of their contributed fees back as a rebate. This is also the optimal allocation. In other words, you get back what you put in and the other rewards on top of that!
Atomic Wallet offers you a great place to store your Graph tokens. Besides just being a wallet for storing, sending, and receiving, you can do much, much more with an Atomic wallet. Atomic Wallet has some great features such as having a built-in decentralized exchange/swap where you can buy more than 300 crypto currencies and have them securely stored in your Atomic Wallet. What's more is that you can stake a number of tokens right in the Wallet! On top of that, for each transaction you make in Atomic Wallet, buying, selling, or swapping, you are eligible to get up to 1% back per transaction paid out in Atomic Wallet's native token, AWC.
Do you still have some more questions or are you looking for resources with more information? Then look no further! Check out the FAQ and Resources section below!
An API which stands for Application Protocol Interface is a way that computers send data to each other via applications and websites. On one end is the user or requester and on the other end there is a server, or dedicated computer which houses the data that the requester is seeking. The Server also contains a database which is queried by the API. The API is the method that the two computers talk to each other and exchange information. This method uses a single point of contact, that is server which has the info the requester wants, this makes it prone to downtime, planned or unplanned, which creates risk in one form or another. Graph takes all that data and keeps it in a distributed system of subgraphs that are hosted around the network. If one goes down, another one can step in and continue to serve the data.
To participate in the Graph's network and become and indexer to earn rewards, you'll need to have the minimum of 10,000 GRT to register as an indexer and you'll need to have extensive DevOps skills to be able to do the work. DevOps is a role within IT and software development.
Subgraphs are data structures, akin to an API to organize data pulled from a blockchain. They are a way to define which data you want to get indexed and how to store it. Some of them do pre-aggregations or calculations on their mappings, some just store plain data similar to what you could find on-chain. To access the data you need to query that data. You could use a dapp, bot, or even a simple user doing a query to find information. It's like an API but distributed through a decentralized network.
The graph uses GraphQL, which is an open source query language developed by Facebook. Each element in the schema has a description. Learn GraphQL and you can then retrieve all the data that you want from the blockchain. You can do some really cool things with GraphQL, if you are into application development.
GraphQL is a query language and server-side runtime for application programming interfaces (APIs) that prioritizes giving clients exactly the data they request and no more. GraphQL is designed to make APIs fast, flexible, and developer-friendly. GraphQL API is the API developers can use to access the indexed data by The Graph.
You can learn more about the GraphQL API in the official documentation.
Learn more about what Atomic Wallet has to offer on the official website.
Learn how to get started using Atomic Wallet.
Learn more about the status for each crypto currency that Atomic Wallet has on the asset status page.
Learn more about crypto currency on Atomic Wallet's Academy.
Learn more about the Graph Network on their official website
Discover Flow Crypto, a permissionless layer 1 blockchain that enables developers to create limitless Web3 apps for mainstream adoption. Learn about the power of Flow (FLOW) in the cryptocurrency landscape.
Discover USDC, a digital dollar backed 100% by liquid cash assets, offering instant redemption for US dollars. Learn about the benefits and security of USDC for seamless transactions.