The Graph blockchain-based solution: features and purpose

The Graph is not a blockchain; it's a decentralized blockchain-based solution built on Ethereum to help app developers in their quest for useful data. Data found on just Ethereum is often not enough. It's good when you can combine stuff from various networks. It's often essential that you have easy access to multiple databases spread across Web3.

The Graph serves just this purpose. While an Ethereum-developed solution, it's distributed throughout several notable blockchains, including Binance Smart Chain, Avalanche, IPFS, and others. This ensures as decentralized an experience as possible with no preferential treatment towards one network or the other. The solution's utility token is called GRT, or Graph Token.

Main features

The main purpose of this solution is to provide a fast and effective way of selectively indexing data. It means that, through this solution, data can be systemized and categorized. In order to collect the necessary information from an available network, of which there are several, you don't need to scan whole registers anymore.

The Graph offers a very precise and cost-effective way of extracting the necessary data from blockchains. This is achieved via a thoroughly developed indexing mechanism. The indexing itself is carried out by Indexers — a special type of participants that dedicate their processing power to handling and storing data.

However, the way indexing works can be customized by any individual user. Since The Graph is mostly created to serve dApp developers and similar entrepreneurs, the target audience likely already possesses ample development skills to create specific indexing protocols that fit their exact needs. That's the logic.

This feature helps immensely. You might need very niche data to be collected from open sources, but this will require very specific indexing if you want effective queries.

GraphQL

GraphQL is a query language used in The Graph APIs. It can be used to create custom subgraphs, enabling specific queries that benefit a particular type of dApps. Any user can create them to better organize the development process of their decentralized products and make them more cost-effective.

Moreover, subgraphs are open to scrutiny and observation by other users. There is even a special type of participants called Curators. Their job is to draw attention to high-quality, effective subgraphs. Well-designed subgraphs can then enter a wider circulation, earning their creators rewards and making the lives of many other developers easier in the process.

Participants

The main purpose of The Graph is to provide a feasible way to collect information from a variety of blockchains without investing heavily in scanning, processing, and storing data. It's a more cost-effective way of accessing data and sorting data, which greatly benefits developers of all stripes.

The Graph is built upon several main components:

• Indexers. Indexers are participants who contribute their servers towards this process, indexing and processing of data, which enables regular users to scan for necessary info from other networks and handle it without spending much of their own processing power or investing in more servers than needed.
• Curators. The main job of Curators, the other caste of participants, is to look for good subgraphs of high quality and attract attention to them. This enables the creators of good indexing protocols to have their work elevated, which benefits all parties.

All active participants receive a number of Graph Tokens, which are utility tokens used for various types of staking. In return for putting them into circulation, the participants are awarded additional GRT in proportion to their original staked amount. The result is a never-ending exponential growth of revenue.

Staking GRT

GRT is used in several types of staking, which define the operational process of this network. There are several ways you can use this token:

• Indexing staking. To provide a certain amount of servers, an Indexer is supposed to allocate a proportional amount of GRT. In exchange, Indexers earn rewards also represented in this token.
• Query fees. Query fees are a large part of the rewards that Indexers receive for their work. People who use their servers to handle data must provide some financial reimbursement to whoever provided a server. That's how query fees are formed.
• Delegating. Participants who want to take part in indexing data but refuse to allocate their own servers can sponsor actual Indexers by granting them a share of their own GRT. This way, they can provide more servers for less cost, and delegators receive a portion of query fees in return.

Graph Tokens can be used to other ends, as well. Although not a blockchain, the solution still has a governance algorithm. As part of this algorithm, participants propose and vote on the new features and changes. This allows them to directly influence the way this solution develops and grows.

Effectiveness

The Graph is capable of massively improving the development process of dApps, DeFi solutions, and many other decentralized products. DeFi solutions, in particular, benefit hugely from the financial data scattered all over the Web3, which they need to make lightning-speed calculations and profitable decisions.

There are several visible implications that The Graph functionality brings to the table:

• Fewer servers to keep. For a small fee, you can essentially rent servers from other people. It's safe, thanks to the system's security mechanisms, and productive, thanks to the decentralized nature of this experience.
• Fewer expenses. Paying people to keep up servers for you is a better move than renting servers yourself. It's more reliable to trust experienced, invested people who keep many servers in bulk rather than buy a small amount of servers yourself.
• More uptime. The thing about these servers is that there are a lot of them. If one fails, you can be quickly rerouted to the other. There is a huge anonymous pool of server keepers, whose hardware can be accessed very fast.

As such, The Graph is a beneficial addition to your toolbox as a developer of decentralized apps and other solutions. For a small fee, you can massively increase the efficiency of your queries and improve the indexing situation of your project. Hence, there is really no reason not to try this service.