What is The Graph (GRT)?

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What is The Graph (GRT)?

What is The Graph (GRT)?

Summary

  • In the world of computers, a query is the search term an application uses to ask another application or a database for specific information. As a database with a unique design, blockchain systems don’t support these conventional queries.

  • The Graph sits on top of the Ethereum blockchain, indexes its data, and creates APIs or Sungraphs that support complex queries. Dapps then will be able to benefit from Ethereum’s vast collection of data through subgraphs.

  • To provide its services to Dapps and Web 3.0 applications, The Graph has defined different roles: Indexers, Curators, and Delegators.

  • Indexers earn fees for processing queries. Delegators judge indexers based on various factors and choose the ones they find more qualified.

  • Curators look into the subgraphs and find the ones that look promising. They then have to signal Indexers that they have found a high-quality subgraph that is worth being indexed and processed.

  • GRT Token was launched with a total supply of 10 billion tokens and will increase its supply by 3% on an annual basis to reward Indexers. Additionally, a burning mechanism is conducted through network activities.

Table of Contents

What is The Graph (GRT)?

Blockchains are essentially distributed database systems that record transaction data between different members in a decentralised manner. Public blockchains are run and maintained by their users. To make this possible, different members of a blockchain system can download and hold a copy of the blockchain records, also known as the public ledger.

Just like any other database, this public ledger has a significant collection of data, can be used for various applications, and holds extensive insights. However, the unique nature of a blockchain system makes using blockchain ledgers more complicated than conventional database systems.

Transactions between members are stored on the ledger. Some of these transactions are the result of the execution of complex smart contracts. Fetching custom data from these transactions isn’t easy and applications may be able to get basic information at best.

The Graph is a decentralised protocol that helps decentralised applications (Dapps) explore the data stored on a blockchain system more easily. In other words, The Graph indexes the data stored on the Ethereum blockchain and allows Dapps to find the right data more efficiently through open APIs called Subgraphs.

Applications usually store the data on an external database system and connect to them once they need specific information. They can even ask third-party applications for information through APIs. They send their data request through a query.

In the world of computers, a query is the search term an application uses to ask another application or a database for specific information. As a database with a unique design, blockchain systems don’t support these conventional queries – and this is where The Graph comes into the picture.

The Graph makes complex queries possible which require filtering and aggregation of blockchain data. So to summarise, The Graph sits on top of the Ethereum blockchain, indexes its data, and creates APIs or Sungraphs that support complex queries. Dapps then will be able to benefit from Ethereum’s vast collection of data through subgraphs.

How does The Graph (GRT) Work?

To provide its services to Dapps and Web 3.0 applications, The Graph has defined different roles: Indexers, Curators, and Delegators.

The Graph Node, an open-source application and the heart of the Graph network, scans Ethereum constantly, looking for new data. Once a new transaction is detected, the Graph Node fetches and adds it to the proper subgraph. After this step, the work of Indexers, Curators, and Delegators starts.

Users need Graph Token (GRT), the native token of the Graph network to fill any of these roles. Now, let’s see what each of them is really responsible for!

Indexing

Users are required to stake GRT Tokens to become Indexers on the Graph network and earn rewards for providing indexing and query processing services. At the moment, you need at least 100,000 GRT tokens to become an indexer.

Indexers earn fees for processing queries. Their query processing capacity is dependent on the amount of staked GRTs. So the more they stake, the more queries they can process, and the more they can earn.

Indexers can choose a proper subgraph to work on based on the signals they receive from Curators.

Delegating

Just like indexers, delegators need to stake GRT tokens to offer their services. However, they stake these tokens on indexers.

Delegators judge indexers based on various factors and choose the ones they find more qualified. They then stake their GRT tokens on these indexers to have a share in the rewards indexers receive from processing queries and indexing.

Curating

Curator-Bonding-Curve

The Bonding Curve – Source: The Graph Academy

Are all the subgraphs worth being indexed? Well, this is a question that Curators need to answer.

Curators look into the subgraphs and find the ones that look promising. They then have to signal Indexers that they have found a high-quality subgraph that is worth being indexed and processed.

They deposit GRT tokens in the subgraph and receive Curation Shares of that specific subgraph. This makes them eligible for a portion of rewards that the subgraph is creating.

The price of Curating Shares of a subgraph is determined by the bonding curve. As the number of minted shares increases for a specific subgraph (it is being selected by more Curators), the price of the shares will rise as well.

What is Graph Token (GRT)?

GRT Token is one of the main components of the Graph ecosystem and is required to keep the system functional in an efficient and secure way.

Consumers use GRT Token to pay for the data they require and the queries they send to the Graph subgraphs (or APIs). Network participants such as Indexers, Curators, and Delegators will receive GRT in exchange for the services they are providing.

GRT Token was launched with a total supply of 10 billion tokens and will increase its supply by 3% on an annual basis to reward Indexers. However, GRT Token decreases its supply through burning as well.

The burning mechanism is conducted through network activities and as the adoption grows, more tokens will be burned and removed from circulation each year. This will offset the newly issued tokens and their effect on the market price of the GRT Token.

total-burned-grt.bfdc763b

Total Burned GRT – Source: The Graph Website

At the moment, almost 1% of the GRT total supply gets burned every year. You can see the number of burned tokens on the chart above.

Where to Buy Graph Token (GRT)

GRT is available on various decentralised platforms as well as centralised ones. You will be able to buy GRT tokens on BitDelta by using your credit/debit card or placing a market order.

To buy some GRT tokens on BitDelta, head over to BitDelta.com. On the top menu, select “Trade” and choose the “Spot” option. GRT will be available as the GRT/USDT pair.

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