The Graph

Understanding The Graph (GRT): A Comprehensive Guide

What is The Graph (GRT)?

The Graph (GRT) is a decentralized protocol designed for indexing and querying data from blockchains. Often described as the "Google of blockchains," The Graph makes it possible to efficiently search, access, and retrieve blockchain data that would otherwise be difficult to query directly. Launched in December 2020, The Graph has become an essential infrastructure component in the Web3 ecosystem, particularly for decentralized applications (dApps) that need to access blockchain data in a structured way.

How Does The Graph (GRT) Work?

The Graph operates through a network of participants who work together to process and serve blockchain data. Here's a simplified breakdown of its architecture:

Key Components of The Graph Network:

• Indexers: Node operators who stake GRT tokens to provide indexing and query services.
• Curators: Users who identify which subgraphs (data indexes) are valuable and signal this by depositing GRT tokens.
• Delegators: GRT token holders who delegate their tokens to Indexers to earn a portion of query fees and indexing rewards.
• Subgraphs: Open APIs that define which data The Graph should index from a blockchain and how it should be stored.

When a dApp needs blockchain data, it queries a subgraph through The Graph's network. Indexers process these queries, providing the requested data in return for query fees paid in GRT.

Staking and Delegation in The Graph (GRT)

The Graph offers staking opportunities but does not involve traditional mining. Instead, it operates on a proof-of-stake model with unique roles:

Staking Options:

• Indexer Staking: Indexers must stake a minimum amount of GRT tokens to participate in the network. This stake serves as collateral, ensuring honest behavior. Indexers earn both query fees and indexing rewards.
• Delegation: GRT holders can delegate their tokens to Indexers they trust. Delegators receive a portion of the Indexer's rewards without running infrastructure themselves. There's a 0.5% delegation tax and a 28-day unbonding period when withdrawing delegated tokens.
• Curation: Curators deposit GRT into a bonding curve to signal on subgraphs they believe are valuable. They earn a share of query fees generated by that subgraph.

Unlike proof-of-work cryptocurrencies, The Graph (GRT) doesn't involve mining with computational resources. Instead, network participants earn rewards through staking, delegation, and curation activities.

What is GRT Used For?

The Graph's native token (GRT) serves multiple functions within the ecosystem:

Utility of GRT Tokens:

• Network Incentives: GRT rewards Indexers, Curators, and Delegators for their contributions.
• Query Fees: Consumers of data pay Indexers in GRT tokens for processing their queries.
• Staking: Indexers stake GRT as an economic security measure.
• Governance: GRT holders can participate in protocol governance decisions.
• Signaling: Curators use GRT to signal which subgraphs are valuable to the ecosystem.

GRT Token Distribution and Launch

The Graph (GRT) token was launched in December 2020 with a total supply of 10 billion tokens. The initial distribution was structured as follows:

Token Allocation:

• Public Sale: 4% of tokens were sold in a public token sale.
• Team and Early Contributors: 18% allocated to team members and early contributors with vesting periods.
• Early Investors: 23% allocated to early investors with vesting schedules.
• Community Grants and Ecosystem Fund: 20% reserved for ecosystem development.
• Protocol Treasury: 15% allocated to protocol treasury.
• Curation Incentives: 10% for incentivizing curation activities.
• Indexing Incentives: 10% for incentivizing indexing services.

Many of these allocations have vesting schedules extending over multiple years to ensure long-term alignment with the protocol's success.

The Graph (GRT) in the Web3 Ecosystem

The Graph has become a critical infrastructure component for many popular blockchain applications:

Notable Projects Using The Graph:

• Uniswap
• Synthetic
• Decentraland
• Aave
• Balancer
• Curve
• Many other DeFi, NFT, and DAO platforms

As of 2023, The Graph supports indexing for numerous blockchain networks including Ethereum, Polygon, Avalanche, Celo, Fantom, Arbitrum, and more, making it an increasingly multi-chain solution.

Trading The Graph (GRT)

The Graph (GRT) is available for trading on numerous cryptocurrency exchanges worldwide. Investors and traders can easily access GRT markets through automated trading solutions like Cryptohopper's bot, which allows for efficient trading strategies across multiple exchanges. Whether you're looking to add GRT to your long-term portfolio or engage in more active trading, Cryptohopper provides tools to automate your GRT trading on any supported exchange.

Conclusion: The Future of The Graph (GRT)

The Graph (GRT) continues to grow as an essential infrastructure layer for Web3 applications. As more blockchain data is generated and more decentralized applications require streamlined data access, The Graph's indexing protocol becomes increasingly valuable. With its robust tokenomics, staking opportunities, and critical utility in the blockchain ecosystem, GRT represents not just a cryptocurrency but a fundamental building block of the decentralized internet.