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What Is The Graph (GRT) Token?

UTC by Oluwapelumi Adejumo · 7 min read
What Is The Graph (GRT) Token?
Photo: The Graph Blog

The guide introduces you to The Graph (GRT) – an Ethereum-based marketplace that powers many of the most used dApps in the DeFi and broader Web3 ecosystem.

When The Graph (GRT) was introduced in July of 2018, the visualization of the project was to build a decentralized indexing protocol for Web3. The protocol is the core infrastructure for Web3, a necessary component for delivering decentralized applications with consumer-grade performance.

The Graph: Indexing Protocol for Seamless Data Exchange

The Graph is an indexing protocol for querying networks like Ethereum (ETH) and Interplanetary File System (IPFS). Any individual is capable of building or publishing open APIs called subgraphs, making data easily accessible. The Graph successfully completed an integration with Chainlink (LINK), the market-leading decentralized oracle network. The integration allows indexed data from The Graph’s APIs, called subgraphs, to be relayed to smart contracts via Chainlink oracles. As a result, there are opportunities for developers to use indexed data sets to build powerful, truly decentralized applications.

Meanwhile, indexing is a way of structuring and categorizing data so that users can easily search for and query.  Another important feature is making data indexed by The Graph available to smart contracts via secure and reliable oracles. Chainlink is a framework for building decentralized oracle networks that is critical to data sharing between decentralized applications. It allows users to decentralize both the node operator and data source of an oracle network. Besides, it provides incorporate advanced features such as trusted execution environments and verifiable randomness. Being the most widely used oracle network across an increasing number of different blockchains, Chainlink oracles make a perfect combination with The Graph for dApps across blockchain environments to index data and deliver that data to smart contracts.

Development and Growth of The Graph

The Graph (GRT) token is worth paying attention to, as since its introduction in July of 2018 it has significantly grown and expanded its community. Founded by Yaniv Tal (project lead), Brandon Ramirez (research lead), and Jannis Pohlmann (tech lead), it has attracted a team of other professionals. Among them are experts from the Ethereum Foundation, OpenZeppelin, Decentraland, Orchid, MuleSoft, which led to the IPO and acquisition by Salesforce, Puppet, Redhat, and Barclays.

To fund the network development, The Graph raised funds from community members, strategic VCs, and influential individuals in the blockchain community. It received support from Coinbase Ventures, DCG, Framework, ParaFi Capital, CoinFund, DTC, Multicoin, Reciprocal Ventures, SPC, Tally Capital, and others. The Graph Foundation also successfully completed a public GRT Sale with participation from 99 countries (not including the US).

As of April 2021, The Graph surpassed 20m billion monthly queries. For comparison, it was 1 billion queries back in June 2020, which means a 20x growth in less than a year. Unprecedented usage of Ethereum and Web3 were the key factors that drove the growth.

The Graph’s Tech Specs

The first feature of The Graph is subgraphs. They specify how to structure blockchain data that app and dApp developers will consume. App and dApp developers can query The Graph network using the subgraph schema with GraphQL which are paid in The Graph token (GRT).

Indexers who act as nodes serve these data and incentivize them with GRT tokens. This is to ensure that the API is always available in a decentralized manner and data are served correctly. As there can be many subgraphs out there, curators’ task is to find the subgraphs that are most useful to developers. Curators are also incentivized with GRT tokens to find the best subgraph that others would find useful.

The Graph Network

The Graph Network decentralizes the API and query layer of the internet application stack. For the first time,  The Graph Network makes it possible to efficiently query blockchain data without relying on a centralized service provider.

Notably, developers can run a Graph Node on their own infrastructure, or they can build on its hosted service. In The Graph Network, any Indexer will be able to stake Graph Tokens (GRT) to participate in the network and earn rewards for indexing subgraphs and fees for serving queries on those subgraphs.

Further, consumers will be able to query this diverse set of Indexers by paying for their metered usage. Thus, they prove a model where the laws of supply and demand sustain the services provided by the protocol. There are roles that interact with the system, the behaviors they must engage in for the protocol to function correctly, and incentives/rewards that motivate them.

The key participants of the network are as follows:

  • Consumers. They pay Indexers for queries. These will typically be end users but could also be web services or middleware that integrate with The Graph.
  • Indexers. These are the node operators of The Graph. Their motivation is earning financial rewards.
  • Curators. They make use of GRT to signal what subgraphs are valuable to index. These will typically be developers who share their motivations. However, they could also be end-users supporting a valuable service they rely upon or an identity that is purely financially motivated.
  • Delegators. They put GRT at stake on behalf of an Indexer in order to earn a portion of indexer rewards and fees. Notably, there is no need to personally run a Graph Node.

The Graph (GRT) Token

The Graph (GRT) coin is the native token of the network. Its main use is coordinating the work on The Graph. GRT is an ERC20 token. Node operators, called Indexers, stake and earn GRT for processing queries. Anyone can delegate GRT to Indexers to secure the network and earn rewards. Curators organize data on The Graph by signaling GRT on useful APIs, called subgraphs. Indexers, Delegators, and Curators work together to organize the data for the crypto economy and maintain a useful global API for DeFi and Web3.

The total supply of GRT makes up 1,224,999,438 tokens. The token is available on several exchange markets, but Digifinex is the most active exchange.

The Graph ICO

In October 2020, The Graph conducted an ICO. It closed a $5 million private token sale funded by Coinbase Ventures, Framework Ventures, Digital Currency Group, and more while also completing a $2.5 million seed round led by Multicoin Capital. A public sale round of $12 million also ended few months before the launch of the main net. During the sale, 4% of the total token supply (400 million tokens) was allocated to over 4,500 individuals outside the U.S. who successfully passed KYC compliance, from more than 90 countries.

Benefits of The Graph

The main advantage of The Graph is that developers are able to obtain most of the essential Ethereum data through the platform.  It includes data for Uniswap (UNI), Balancer (BAL), Curve (CRV), Aave (AAVE), Moloch DAO, Compound (COMP), and more. Apps and dApps that are using The Graph include CoinGecko, Uniswap Info, Decentraland, Synthetix, Aragon, and more.

Conclusion

You may wonder whether you should invest in a currency like GRT. For an individual trader in the stock market, it becomes even more important to safeguard your investments through safety devices like risk/reward calculation. This is especially relevant for the free markets because there is uncertainty and risk inherent within that route. However, you can sway uncertainty in your favor by finding investments and trading opportunities that the possibility of loss is smaller relative to the possibility of gain. The Graph is definitely worth paying attention to. And undoubtedly, you can consider it for expanding your investment portfolio.

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FAQ

What is The Graph?

The Graph is an indexing protocol and global API for organizing blockchain data and making it easily accessible with GraphQL. The Graph makes it possible to build serverless dApps that run entirely on public infrastructure.

What issues does The Graph solve?

It helps to search for any Ethereum data through simple queries conveniently. This addresses the common problem that many other blockchain indexing platforms have.

Who founded The Graph?

The Graph was founded by Yaniv Tal (Project Lead), Jannis Pohlman (Tech Lead), and Brandom Ramirez (Research Lead).

How does The Graph work?

The Graph shows how to index Ethereum data based on subgraph descriptions, known as the subgraph manifest. The subgraph description defines the smart contracts of interest for a subgraph, the events in those contracts to pay attention to, and how to map event data to data that The Graph will store in its database.

What are the key components of The Graph Network?

The key components are Consumers, Indexers, Curators, and Delegators.

What is GRT token?

GRT is the native coin of The Graph Network and an ERC20 token.

How to buy GRT token?

If you want to buy The Graph token (GRT), it is available on several exchange markets. Digifinex is currently the most active exchange.

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