If you think Chainlink is important for blockchain, then this one too

A quick overview of the Graph blockchain protocol and GRT Token

8 min readApr 6, 2021

TL;DR

The Graph blockchain network is an indexing protocol for querying data on blockchain networks like Ethereum and IPFS.
Anyone can build and publish open APIs, called subgraphs, making data easily accessible.
Graph is an essential component in the blockchain apps ecosystems like Dapps, DeFi in particular.
Graph currently reports 4 billion monthly queries on Graph hosted services from dapps like Uniswap, Synthetix, etc.
They have decent token economics which is all performed with the one staking token called GRT
They have the first-mover advantage in this space like Chainlink in the Oracle ecosystem.

What is the Graph Protocol?

The Graph protocol is an open-source, decentralized indexing protocol for blockchain data. Currently, the protocol works in the Ethereum platform but will be integrated with other blockchain networks like Bitcoin and other Layer-1 blockchain networks. Data is critical for Dapps running in the Ethereum ecosystem. The Oracles like Chainlink solve one-half of the problem by making real-world data available to blockchain networks. The other half is solved by Graph protocol in a decentralized fashion to keep up with the blockchain philosophy. The Graph protocol index the blockchain data available in the blockchain networks for Dapps to query and use as required. When I explored this project further, I realized getting blockchain data is more painful than getting the different web applications data tied to various applications on the internet. Any blockchain network data is scattered into various pieces. The Block data is shared between various nodes in a blockchain network. The State data have data associated with smart contracts. Transactions data are the list of transactions enclosed in a block. The Transaction receipts data contains data related to each transaction execution, including gas cost, transaction status, etc. The log data contain event data like data related to token transfers. The only way various Dapps can get the required blockchain data is by collecting all the blockchain data into a separate database and index it. This is what a blockchain explorer like Etherscan does. The process is called ingestion service. The downside is this requires a huge DB and is done by a centralized entity that collects the blockchain data and transforms it into queryable data.

The Graph is the Google of Blockchain data.

Google search engine indexes web data to make searching efficient, and Graph is doing something similar in a more decentralized fashion to blockchain data. DApp developers can build a component called a subgraph which is the queryable data from a blockchain. E.g., A Uniswap subgraph will have all the data related to trading in Uniswap, which can be queried. Subgraphs will be registered in a graph node. You can find the details of subgraphs in Graph explorer. The query language used in Graph protocol is GraphQL which is a smart REST API tool developed by Facebook.

How does the Graph protocol work?

The following are the Network participants of the Graph protocol.
Indexers — They are the Graph node operators. They participate in the network by staking GRT Token and run a Graph node. Their job is to index the relevant subgraphs. They earn rewards in GRT Tokens for indexing subgraphs and collect fees when consumers query their subgraphs.

Consumers — They are end-users or other Dapps that query indexers to get data.

Curators — They are like the curators on the Medium platform. They use their GRT tokens to signal what subgraphs are worth indexing. Curators are incentivized in GRT tokens based on how popular a subgraph becomes.

Delegators — They can be anyone who likes to participate in the Graph Network. They will have to stake their GRT on behalf of an indexer to earn a portion of the indexer’s rewards and fees.

The Graph council is the future model for decentralized governance of Graph protocol like something similar to MakerDAO. They will form a Decentralized autonomous organization to do governance of Graph protocol.

The Graph Token

The GRT Token is capped at 10 billion, and new token issuance is at 3% annually. A portion of the protocol query fees is burned at a ~1% rate. You can stake the Graph token directly from The Graph website or use staking websites like Stakingrewards.com and earn passive income while participating in The Graph network.