What is The Graph (GRT)?
The Graph, a decentralized protocol for indexing and querying data from blockchains. Just as Google indexes the web, The Graph indexes blockchain data from networks like Ethereum and Filecoin. This data is grouped into open APIs called subgraphs that anyone can query.
The platform can be used to search for any Ethereum data through simple queries conveniently. This addresses the common problem that many other blockchain indexing platforms have.
Blockchain applications struggle to adhere to properties such as finality, chain reorganization, and query fulfillment security. The Graph aims to remedy this and other problems.
Through “subgraphs,” The Graph indexes blockchain data that users can access through the GraphQL API. According to the team, they will fully decentralize it in the future. More nodes will be involved and made responsible for maintaining the index.
Interest in the platform continues to grow. In fact, they reached over one billion queries last June 2020. That was right around the time that decentralized finance was also gaining a lot of institutional attention.
How it works?
To index Ethereum-based data, The Graph uses the “Subgraph Manifesto.” This refers to the description of a subgraph that contains data about smart contracts, blockchain events, and the process of mapping event data together before it is all stored in the platform’s database.
The flow of data from transactions, subgraph manifests, and the database follows a certain structure. It all starts with decentralized applications that add data to the Ethereum blockchain using smart contracts.
All this data contains a record of all events and transactions up to the point where they reach finality. Then comes The Graph Node, which scans the entire blockchain database, collects new data, and filters out those relevant to users’ queries. To facilitate indexing, it identifies each piece of information that answers the queries from subgraphs.
GraphQL is the link between the blockchain data and the application a user wants to feed it to. Finally, after the whole process, users can view their query results from within their applications.
Basically, this is how the cycle of data query and indexing works in the platform. Users can refer to Graph Explorer to browse the subgraphs that already exist in the platform. Each of these subgraphs has a playground where users can perform queries using GraphQL.
Why does GRT have value?
The GRT cryptocurrency derives its value from its ability to ensure the successful execution of smart contracts that depend on the The Graph protocol.
Most notably, GRT is the only cryptocurrency used for key network operations. For example, consumers who submit queries to indexers must pay a query fee, denominated in GRT.
Curators earn query fees for the subgraphs they signal, indexers earn a portion of the query fees and rewards from the protocol, and delegators earn part of the indexer fees for lending their GRT.
Anyone who owns and stakes GRT tokens can participate in decisions affecting the software, voting on proposals for the rules that govern the platform’s use. Delegators assign their voting rights to someone else to vote on their behalf.
Investors should note that, while The Graph introduced 10 billion GRT in 2020, the total supply is set to increase on average around 3% annually, with an estimated 1% of tokens to be removed from circulation each year.
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Cryptocurrency