The Graph is a protocol for indexing and querying data from blockchains, starting with Ethereum. Developers build applications with open APIs called subgraphs to easily access on-chain data that is indexed by a network of node operators.
Subgraphs are open source so anyone can use the APIs to build decentralized applications. Many Ethereum applications have already built subgraphs and use them today including: Audius, Uniswap, Opyn, ENS, DAOstack, Synthetix, Moloch and more.
Over 20,000 developers have contributed to developing subgraphs across more than 20 chains. The Graph decentralizes the query and API layer of Web 3, removing a tradeoff dApp developers struggle with today: whether to build an application that is performant or to build an app that is truly decentralized.
GRT is a work token that is locked-up by protocol participants (Indexers, Curators, and Delegators) to provide indexing and curating services to the network. Active Indexers, Curators, and Delegators can earn income from the network proportional to the amount of work they perform and their GRT stake.
Consumers will be using a growing set of Indexers by paying for their metered usage using GRT. Indexers will be able to stake Graph tokens (GRT) to participate in the network and earn fees as well as inflation rewards for serving queries.
Total GRT supply at mainnet launch will be 10 billion tokens, and new token issuance in the form of indexing rewards will begin at 3% annually and is subject to future independent technical governance.
Learn More: The Graph GRT Token Economics
Consensus & Emission
Indexers are node operators in The Graph Network that stake Graph Tokens (GRT) in order to provide indexing and query processing services. Indexers earn query fees and indexer rewards for their services.
Curators are subgraph developers, data consumers or community members who signal to Indexers which APIs should be indexed by The Graph Network. Curators deposit GRT into a bonding curve to signal on a specific subgraph and earn a portion of query fees for the subgraphs they signal on; incentivizing the highest quality data sources. Curators will curate on subgraphs and deposit GRT via the Graph Explorer dApp. Because this occurs on a bonding curve, that means that earlier signals gain greater share of the query fees on that subgraph for a given amount of GRT deposited.
Delegators are individuals who would like to contribute to securing the network but do not want to run a Graph Node themselves. Delegators contribute by delegating GRT to existing Indexers and they earn a portion of query fees and indexing rewards in return. Delegators select Indexers based on their performance on measures like query fee rates, past slashing and uptime as well as delegator parameters like the cut of fees and rewards from the Indexer. Delegators will delegate and undelegate GRT on Indexers via the Graph Explorer dApp.
Consumers are the end-users of The Graph that query subgraphs and pay query fees to the Indexers, Curators and Delegators. Consumers are likely to be developers or projects themselves that cover query fees for their applications as they would AWS or cloud service costs. However, some applications will pass on query fees to users or bundle the cost in product fees. Consumers will pay for query fees via “gateways” or wallets that will be built on top of open source contracts in The Graph Network.
Indexers that stake GRT operate in a query marketplace where they earn query fees for indexing services and serving queries to subgraphs. The price of these queries will be set by Indexers and vary based on cost to index the subgraph, the demand for queries, the amount of curation signal and the market rate for blockchain queries. Since Consumers (ie. applications) are paying for queries, the aggregate cost is expected to be much lower than the costs of running a server and database.
A Gateway can be used to allow consumers to connect to the network and to facilitate payments. The team behind The Graph will initially run a set of gateways that allows applications to cover the query costs on behalf of their users. These gateways facilitate connecting to The Graph Network. Anyone will be able to run their own gateways as well. Gateways handle state channel logistics for query fees, and route to Indexers as a function of price, performance and security that is predetermined by the application paying for those queries.
In addition to query fees, Indexers and Delegators will earn indexing rewards in the form of GRT that is new token issuance distributed proportional to Curator signal and allocated stake. Indexing rewards will start at 3% annually. Future GRT monetary policy will be set by an independent technical governance which will be established as after network launch.
The Graph Network will have epochs which are measured in blocks and are used for the Indexing Rewards calculations.
In addition to query fees and indexing rewards, there is a Rebate Pool that rewards all network participants based on their contributions to The Graph Network. The rebate pool is designed to encourage Indexers to allocate stake in rough proportion to the amount of query fees they earn for the network.
GRT that is staked in the protocol is subject to a thawing period and can be slashed if Indexers are malicious and serve incorrect data to applications or if they index incorrectly. Curators and Delegators cannot be slashed for bad behavior, yet there is a withdrawal tax on Curators and Delegators to disincentivize poor decision making that could harm the integrity of the network. Curators also earn fewer query fees if they choose to curate on a low-quality subgraph, since there will be fewer queries to process or fewer indexers to process those queries.
A portion of protocol query fees are burned, expected to start at ~1% of total protocol query fees and subject to future technical governance. The aforementioned withdrawal tax that is incurred by Curators and Delegators withdrawing their GRT is also burned, as well as any unclaimed rebate rewards.