Smart contracts are the greatest crypto invention since Bitcoin. They are autonomous self-executable programs that perform actions upon meeting certain conditions. What you might have missed from this classic definition is that smart contracts also store data – data that’s hard to reach without projects like The Graph (GRT).
You can manually search data pretty easily. If you wanted to check out the characteristics of a specific NFT, you could do so by using a blockchain explorer (e.g. Etherscan.) You can check the NFT's image, owner, traits, rarity, and other aspects. However, things get more complicated once you’re required to scale or make more complex data queries.
You can't aggregate certain data sets, create data relationships, or filter data simply by interacting with smart contracts. You'd have to create a script that does this by scanning every single transfer to get your results - a quite resource-intensive process.
One project in the crypto market steps in by making querying and indexing blockchain data easy. Today's article explains how The Graph created a decentralized indexing protocol based on a magical feature called ‘subgraphs’ and why it’s so important for DeFi dApps.
The Graph (GRT) is a decentralized indexing protocol for querying networks like Ethereum and IPFS. The protocol lets anyone make blockchain data easily accessible by building and publishing public APIs called subgraphs. The goal of this project is to be for Web3 what Google is for the internet.
Graph Protocol uses subgraphs, which are open APIs that enable developers to query blockchain data efficiently. Subgraphs contain information about specific data types and events, such as token transfers, market prices, and user interactions, allowing developers to retrieve the information they need without having to write complex smart contracts.
The protocol consists of three main components:
Developers interact with the protocol through the GraphQL API, which enables them to query blockchain data using a simple and user-friendly syntax. GraphQL also provides real-time notifications, enabling developers to monitor blockchain events as they happen.
Querying and indexing blockchain data via The Graph works in the following way:
Graph Protocol was launched in 2018 by Yaniv Tal, Brandon Ramirez, and Jannis Pohlmann. The three founders recognized the need for a protocol that could make it easier for developers to access and query blockchain data. The Graph Protocol quickly gained popularity, and in 2019, the team raised $2.5 million in a funding round led by Multicoin Capital.
An Initial Coin Offering (ICO) took place for The Graph (GRT) token in October 2020. The team raised $12 million at a price of $0.03 per token, selling 400 million tokens in total.
In December 2020, The Graph launched its mainnet, marking a significant milestone for the project. Since then, the protocol has continued to grow, attracting several notable projects, including Uniswap, Synthetix, and Aave.
The project's latest funding round took place in January 2022. Tiger Global Management led the round - joined by Fenbushi Capital, Fintech Collective, Reciprocal Ventures, and Blockwall - raising $50 million.
The Graph protocol has several use cases, including: DeFi, Gaming, and NFTs. The sections below describe each individual use case.
Graph Protocol is widely used in DeFi applications, enabling developers to retrieve blockchain data in real-time. Popular DeFi projects, such as Uniswap, Compound, and Aave, all use the protocol to retrieve data, including token prices, lending rates, and user balances.
Querying data from The Graph is the easiest way for a DeFi dApp to access market and blockchain data. They can do so seamlessly without having to set up their own infrastructure for querying and indexing smart contract data.
The Graph has the potential to be a huge data highway for DeFi. It can connect every single dApp in the market and allow developers to quickly request and process data. For this reason alone, The Graph is often touted as being crypto’s Google.
The Graph Protocol is also used in blockchain-based gaming applications, allowing developers to retrieve game data, including player rankings, game statistics, and token balances. The Graph has a potential use case in Play-to-Earn (P2E) and metaverse Web3 games.
Games whose concept relies around grinding XP, players completing quests, and collecting in-game items could have a large need for Graph’s infrastructure. The project could collect and distribute these data sets to both players and developers.
It would be especially interesting to see how The Graph could play out if a true metaverse ever came into existence - one in which multiple games exist in the same virtual world.
Graph Protocol has a potential use case in the NFT market. NFT collections store all kinds of data into smart contracts. You have data such as the NFT’s image, properties, ID number, owner address, and so on. The Graph could facilitate the indexing and querying of such data for NFT marketplaces, collectors, artists, and developers.
For example, many tools that calculate NFT rarity exist. A project like Graph could make calculating, querying, and indexing NFT rarity even easier. It could also help facilitate integrations between NFT collections, NFT exchanges, and NFT analytics websites.
The Graph Council is a DAO supported by The Graph Foundation that manages protocol upgrades and the community treasury. Another DAO named The Graph AdvocatesDAO manages community grants and the Advocates Program.
The Graph Council supports the growth of its protocol and ecosystem by governing the community treasury and technical upgrades. Members of the council participate in a governance process in which they vote on Graph Improvement Proposals (GIPs).
The Council is made of five core stakeholder groups that play a crucial role in the protocol:
Graph Protocol is a powerful indexing protocol that enables developers to retrieve smart contract blockchain data efficiently. Its use of subgraphs and GraphQL APIs makes it easy for developers to query indexed data without having to host their own server infrastructure.
The number of integrations that The Graph has makes it a valuable tool for developers in the DeFi, gaming, and NFT spaces. As more developers discover the benefits of using Graph Protocol, you can expect to see even more exciting use cases emerge.
Like crypto, the Internet and its data was also scattered around with no way for users to easily execute queries. It took search engines like Google to solve this problem and make the internet more organized. Many within Graph’s community believe that the project has the potential to be crypto’s very own Google.
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