Sorting data on public blockchains is one of the most difficult challenges preventing decentralized applications from scaling up into the mainstream.
This is where an important but little-known protocol called “The Graph” comes into play.
According to Tegan Kline, co-founder of The Graph, “Without The Graph, the DeFi movement wouldn’t have happened. The transparency that the Graph brought through sub-graphs allowed us to innovate in DeFi.”
the graph is “It’s very important for us to build within the blockchain space. will be.”
Kline explained The Graph with an analogy. “Ethereum without The Graph is like walking into a library with all the books scattered on the floor, and The Graph picks those books up and puts them in alphabetical order. You can find books, graphs do this with data on the blockchain.”
Blockchain indexing is an important public good and lucrative product that serves the market. Graphs aren’t the only thing working on the solution.
The most user-focused Ethereum indexing tool is Etherscan, a centralized platform. Etherscan allows users to query the blockchain for wallet addresses, transaction hashes, DeFi capabilities, and even her NFT collection.
This is convenient for most users, but it doesn’t address the application level. Every decentralized application needs to search the blockchain to find the user’s data. Relying on Etherscan for such tasks means that if Etherscan goes down, or if a new paywall is introduced, the ‘decentralized’ application will not be available.
The team behind The Graph protocol realized that this core infrastructure was necessary for decentralized applications to become a reality long before the rest of the industry.
“It was just Ethereum back then, but they realized they were missing this very core part of the stack. [The Graph] I actually went to build the core part of this stack. ”
“In the early days, nobody believed in graphs. And I think with the launch of Graph Network, people really started to understand the value of The Graph.”
Graph is powered by a governance token, GRT, which also acts as a currency for creating decentralized queries. As with any system wishing to provide decentralized goods, communities need clear and attractive incentives.
Individuals can earn GRT tokens from applications by providing query results to the application. These fees are split with the delegator. Delegators assign tokens to those they believe are most valuable.
Individuals and applications can also earn GRT by “curating” subgraphs. A subgraph is a slice of the blockchain containing a particular set of data, such as Uniswap pools or art block galleries. The person who curates the most useful subgraphs for the indexer gets her GRT for that work.
Governance of The Graph is already decentralized, as Edge & Node, the team behind the protocol, have relinquished authority over the community. The team is currently working with the community to improve the protocol and extend its functionality to other blockchains.