If you’re familiar with the cryptocurrency space, you’ve probably heard people refer to Graph Protocol as the ‘Google of Blockchain’. However, if you’re reading an article about Graph Protocol for the first time, you might want to stay around to figure out it acquired the nickname.
Just before we go on to define Graph Protocol, as well as provide all the answers you may be seeking, let’s quickly take a look at a brief history of the decentralised infrastructure protocol.
A brief history of Graph Protocol
Project Graph, although launched in December 2020, has been around three years down the line. Specifically, the project kicked off towards the end of 2017 and was masterminded by three software engineers – Yaniv Tal, Jannis Pohlmann and Brandon Ramirez.
This trio of software engineers was caught in between building a solid decentralised application (dApps) on the Ethereum blockchain and the lack of great tooling for developers within the Ethereum ecosystem, and so they got really frustrated.
This situation led them to discover that building great dApps became very difficult on Ethereum, not to mention the network’s scalability issue at some point. Hence, the quest to resolve the bulk of the issues faced on Ethereum led to the birth of Graph.
In 2019, Graph Protocol was able to raise a total of $19.5 million in the first phase of its initial coin offering (ICO) targeted at early investors. About a year later, in October 2020, they raised another round of $10 million from public sales of their native token, GRT.
It is also worthy of note that at least 21% of the initial token supply of 10 billion GRT had been sold to investors such as Coinbase Ventures, Digital Currency Group, and Multicoin Capital before the time they sold GRT to the general public.
What is Graph Protocol (understanding Graph’s indexing)?
To have a full grasp of how Graph Protocol works, it is important to first understand the concept of indexing which operates at the core of Graph’s Protocol.
To begin with, indexing, according to Wikipedia is a data structure that improves the speed of data retrieval operations on a database table at the cost of additional writes and storage space to maintain the index data structure.
This further implies that indexes can greatly speed up search queries by providing quick access to relevant rows in a table rather than scanning the entire database table many times to offer data to a search query.
Simply, index storage is where people who need information can come and quickly retrieve information relating to a subject instead of having to navigate through a broader source.
Now, applying the same methodology in a blockchain system, indexing is very important, especially for developers who are building on such advanced technology. To understand why, let’s create a scenario you can easily grasp.
For instance, the blockchain is made up of different storage blocks, suggesting that each block contains varying information ranging from transaction receipt to NFT proof-of-ownership, and even the silliest information you can possibly imagine.
As a developer, searching for a piece of information across hundreds of thousands of blocks on a blockchain system can be chaotic, next to impossible in some cases. At best, you may decide to search block after block which on its own can take forever. Hence the need for an indexing concept as employed by Graph’s protocol.
But this feature already exists? Yes! If you are familiar with notable blockchain explorers like Etherscan, you probably would have come across a similar indexing concept. Etherscan, for instance, built its service, such that it can read all the data on its host blockchain and then store it in a separate database which makes search activities easier.
However, the sad part is that the Etherscan indexing concept is only limited to Ethereum blockchain alone. More so, it requires a great level of trust as it has to be integrated on various platforms as an API tool, something that can be pretty tough to achieve. Interestingly, this is the entry point for Graph Protocol. So what is Graph Protocol?
What is Graph Protocol?
To begin with, Graph protocol is particularly focussed on the third-generation decentralised open-source web (Web 3.0). As such, it strives to become the leading infrastructure project that will be required by developers to build their respective decentralised applications in the future of sharing finance.
Specifically, Graph Protocol is aiming to become the Google of web 3.0 and, to achieve this, it simply wants to decentralise the query and API of the decentralised web.
In other words, unlike Etherscan, Graph Protocol enables users to run search queries across the different network including Ethereum, IPFS, and their likes, using its custom query language – GraphQL.
The GraphQL, on the other hand, allows users to specify the field in which they want to search (prompt a query, for explample), as well as the search criteria that would be applied.
The questionable data is organised in numerous subgraphs in the Graph Protocol. Each subgraph functions as a sidechain and can only be used by one dApp.
However, depending on the project’s complexity, a single dApp can make use of numerous subgraphs. Interestingly, each subgraph can also consist of several subgraphs, thus providing a consolidated view of data based on the application use case. Now that you have a grasp of what it means, let’s take a look at how Graph Protocol work.
How does Graph Protocol work?
By applying the indexing concept at its core, the Graph Protocol is able to perform specialised functions. As a result, participants within the network are also able to execute specialised tasks which are tailored to their roles.
Notably, there are three major roles in which participants can act within the Graph network, and they include; i. Indexers, ii. Curators, and iii. Delegators. So, what exactly do each of them do within the network?
Indexers: These set of participants are primarily addressed as the network’s node, and are responsible for indexing relevant subgraphs as well as processing queries within each of them. However, a member must first obtain and stake the network’s native token, GRT, in order to participate as an indexer. In addition, indexers also earn rewards from the query fees paid by end-users.
Curators: These participants act as typical validating nodes, signalling indexers which subgraph within the network should be indexed next based on priority. To become a curator, a participant must deposit GRT into the platform’s “bonding curve”, which qualifies them to signal on a certain subgraph and earn a commission in return.
Also, unlike with other roles, the indexing reward for a given subgraph is proportional to the number of curator signals it receives over time, further implying that the more popular a subgraph is, the bigger the reward.
Delegators: Because not everyone has the time or resources to contribute as an indexer or curator, Graph Protocol allows participants to earn money by delegating. This set of participants is simply required to obtain GRT tokens, stake them, and then delegate the staked GRT to Indexers, who will then complete the task on their behalf.
Delegators, in this context, become sub-indexers, or sub-nodes, and receive commission dependent on the activities of the main indexer to which their staked token is delegated.
Aside from these three roles, there are two other passive roles that also plays out during the validating process within the Graph network.
Namely, “fishermen” and “arbitrators,” these two play active roles in the event that an end-user or middleware initiates a dispute over an incorrect data entry for instance, or perhaps, in the case of any other abnormality within the network.
In terms of application, developers can use subgraphs to provide relevant data to their dApps. Depending on its requirements, a dApp can use one of several subgraphs.
To ensure seamless integration, the Graph Protocol provides dApp developers with readily available subgraphs that may suit their primary function. However, developers can also customize these subgraphs to further suit their core function.
Graph native token – GRT
Similar to other decentralised blockchain Protocol, the Graph network also make use of a native token, GRT, which is primarily used to facilitate the network’s nodes activities including curation, indexing, and delegation.
In addition to fuelling the activities on the Graph Protocol, the GRT token is also used by consumers to pay for query fees. Likewise, the digital asset is used in the network’s reward system, specifically for paying incentives to all relevant stakeholders who contribute to the successful running of the platform.
The Graph Protocol had an initial supply of 10 billion GRT tokens and additional token issuance at a rate of 3% per year, which is used in the network’s reward system. Also, the Graph Protocol, like most decentralised Protocols, employs the proof-of-burn mechanism which is intended to eliminate at least 1% of overall protocol inquiry fees.
Graph Protocol governance – The Graph Council
The Graph Protocol is governed by the Graph Council which was born out of the need to support the Graph Foundation in its strive to steward the decentralised Protocol into the future. Specifically, the Graph Council oversees the decentralised Protocol as well as ecosystem governance.
Composed of six-of-10 multi signatures, the Graph council primarily represent the interest of every participant within the ecosystem, including indexers, users, technical domain experts, initial team and active GRT holders.
Furthermore, the Graph Council leverage what the platform describes as Graph Improvement Proposal (GIP), to ensure seamless protocol upgrades. Most importantly, the GIP process empowers the community members to contribute to the development of The Graph protocol.
Ultimately, the Graph Protocol, although not the first of its kind, offers a far more sustainable indexing solution to the entire blockchain ecosystem than any of its antecedents.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.