The blockchain and cryptocurrency industry has become tremendously versatile over the years. Dedicated projects like The Graph may often fly under the radar, although they provide crucial infrastructure. In this article, we will take a closer look at the project and its GRT token.
The Purpose of The Graph
One might argue the name “The Graph” will not make the project stand out from other blockchain entities. That is not necessarily correct, although a Google search for “The Graph” will not land you on this project right away either. Even so, it is a marketable name and one that explains the project relatively well.
The objective of The Graph is to provide an open-source software solution to help users collect, process, and store data from multiple blockchain applications. There is much to learn from decentralized applications, their behavior, and day-to-day operations. However, making that data comprehensible to the average human is no easy feat, which is where The Graph comes in.
Initially, The Graph launched on Ethereum, widely considered the biggest network for blockchain applications. It is not the most active network for overall activity, though, as BNB Chain holds that crown. However, Ethereum is a solid starting point, and The Graph’s software helped developers use crucial data to streamline their applications and enhance their efficiency.
How Does The Graph Work?
When using the open-source software, users will perform queries through GraphQL. GraphQL is the widely-used language originally developed by Facebook to gather data to build personalized user news feeds. It is interesting to see that technology finds more utility in the blockchain world, and it seems to do the job just fine.
With GraphQl, The Graph can analyze and gather blockchain data to store in various indices or Subgraphs. Those Subgraphs make it easier for applications to send a query to The Graph’s protocol and receive an immediate response. Data is processed by indexers and delegators, who then pass on the information to end-users and applications.
Various top-tier Ethereum-based decentralized applications make use of The Graph, including Aave and Uniswap. If any of these applications add data to the blockchain through smart contracts, it will be added to the Graph’s appropriate Subgraphs through The Graph Node.
Those who partake in the processing of the data – curators, indexers, and delegators – earn network fees for their contributions. A Curator is a Subgraph developer assessing which Subgraphs need to be indexed by attaching GRT to their choices. An Indexer is a node operator who indexes and queries services for the Subgraphs by staking GRT. Lastly, a Delegator delegates GRT to indexes to contribute to the network without running their own node.
The Purpose of GRT
Like other protocols and ecosystems, The Graph has a native currency called GRT. The token is designed to ensure the data integrity of the entire network. Moreover, GRT has value because it is a crucial cog in the machine of executing smart contracts reliant on The Graph and its data. Additionally, GRT is the only currency one can use to perform network operations, including the users submitting queries to indexers.
Extra utility for GRT is provided through governance and staking. Users can take the asset to become a curator, indexer, or delegator. However, they can also participate in the decision-making process for The Graph’s software, network rules, etc. Governance activities are a crucial aspect of building decentralized solutions, and leveraging the community’s wisdom is always worthwhile.
It is worth noting GRT will remain an inflationary currency for the time being. The total supply increases by roughly 3% per annum, while 1% of tokens are removed from circulation every year. Those tokenomics may change over time, depending on the overall demand for GRT.
You can earn $4 in GRT by taking the Coinbase Earn Quiz. Coinbase puts together a set of educational resources for users to learn more about new projects and offers native tokens as a reward. You will need to submit the right Graph quiz answers and will receive free GRT tokens if you answer everything correctly.
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