The graph | Making truly decentralized applications possible

After nearly three decades of development, the web has become a ubiquitous overlay of communications. In our information age, the way people store, find, manage, and share information directly defines the structure of society and everyone's life experience. Today's web has a client-server architecture that gives enormous power to whoever runs the server. Server administrators have unilateral authority to set rules, grant and revoke access, and control data, often without the user's say or awareness.

Information is asymmetric, which leads to an imbalance of power, and this structure favors concentration. This is why only a few companies run most of the world's software today. In a centralized world, individuals have less power over how things work. People become passive observers in a world they cannot change and have no stake in. Monopolies make it harder for individuals to contribute their talents. People get all or nothing deals, competition is stifled, and freedom of choice disappears.

The good news is that we may have reached peak centralization and the pendulum is starting to swing the other way. The sudden rise of cryptocurrencies and related protocols has created a unique opportunity that we can use to shift the balance of power from monopoly to individual sovereignty.

The Graph is the index and query layer of the Web3 decentralized network, providing the core data infrastructure for DeFi and decentralized applications. Developers or anyone can build and publish open data APIs called Subgraphs on our network, and applications can use GraphQL to query these APIs to retrieve data.

1. Web3 Protocol Stack

Web3 is the platform that enables massive decentralization. It’s too early to tell which protocols will ultimately comprise Web3, but we believe that a certain set of protocols will enable a new wave of decentralized experiences to flourish and replace the way software is built and deployed around the world.

Decentralized applications (dApps) enable users to control their data. dApps are built using data that is owned and managed by the community, or privately owned and controlled by the user. This way, many products and services can be built on pluggable data sets, and users can switch freely between dApps. This will enable millions of developers to thrive alone or in small teams, and give users choice and control over how they work.

Ethereum and storage networks like IPFS/Filecoin will be at the core of this new protocol stack, and anyone can run an Ethereum or IPFS node to verify the underlying data. Today, blockchains are slow and expensive, but there is reason to believe that performance and cost can be improved by orders of magnitude through new consensus algorithms, sharding, layer 2, and other solutions being worked on by teams around the world.

2. Query layer

While blockchains and storage networks are key components of the stack, data is rarely stored in a format that can be used directly in applications. Applications need to filter, sort, page, group, and join data before they can fetch it. Users don’t like watching spinners and waiting for screens to load. If web3 is to catch up, we need to provide an experience that is as good as or better than centralized alternatives.

Today, teams are closing this gap in functionality by building centralized indexing servers. These servers pull data from Ethereum, store it in a database, and then expose the data via an API. This is fragile because users need to trust these teams to continue to operate these servers correctly. Projects may go out of business, modify data for strategic reasons, gain, or simply make mistakes.

That’s why we’re creating The Graph, a decentralized query protocol for fetching data from blockchains and storage networks. By using The Graph, developers can query a peer-to-peer network of index nodes using GraphQL and verify the results on the client. This will allow teams to focus on the core functionality of their dApps. They’ll be able to deploy to trusted public infrastructure that they don’t have to manage and benefit from economies of scale.

If the point of web3 is to create a more reliable foundation for software, the Graph brings that stability to a level where any developer can reliably find and use organized data directly into their dApps.

Our founder, Yaniv Tal, is a serial entrepreneur with a passion for application development and making it easier for people to build apps. He has founded multiple startups with The Graph co-founders Brandon and Jannis Pohlmann, all working to provide better tools for developers.

Yaniv Tal was interested in Bitcoin and the idea of ​​decentralization during college, but it was when Ethereum started to develop that he felt he had to get involved. The team began building decentralized applications on Ethereum and realized that there was a lack of a decentralized way to index and query blockchain data. The lack of tools and mature protocols made it difficult to build truly decentralized applications. So the team decided to focus their efforts on helping anyone build on web3, which is the original intention of The Graph.

1. The Graph’s Vision

The digital currency economy brings fundamental innovation prospects to future construction and socio-economic models. Open smart protocols create transparency and opportunities for anyone to contribute their talents to the global economy.

We hope to support the realization of this vision and help developers build new collaborative mechanisms for the blockchain era.

1. Enable fully decentralized applications by creating tools that improve the developer experience of indexing and querying blockchain data.

2. Build a global open API network that is not controlled by a monopoly and maintained by various actual participants/stakeholders.

To achieve these two points, we spent a lot of time thinking about how to build frameworks, tools, and economic models to ensure decentralization and improve efficiency.

2. The Graph ’s Mission

Power applications for the decentralized web and break free from data silos.

The Graph hopes to make it possible for applications to run on their own without centralized assistance, and enable anyone to participate in building on web3. We believe that decentralization will revolutionize the way humans collaborate and organize, and tools like The Graph that enable web3 will help more people find their place in the world and make their greatest contribution.

The Graph will ensure that data remains open and decentralized applications can continue to run no matter what. By using The Graph, developers can query the peer-to-peer network of index nodes using GraphQL and verify the results on the client. This will help other teams focus on the core functions of decentralized applications. They will be able to deploy protocols to trusted public infrastructure that they don't need to worry about managing, and benefit from economies of scale.

If the purpose of Web3 is to create a more reliable foundation for software, The Graph brings the stability of that foundation to a level where any developer can confidently query and use the curated data in their decentralized applications.

The Graph solves several problems in the on-chain world:

1. dApps need solutions to obtain and convert data from underlying data sources. Blockchain data is difficult to store in a format that can be directly retrieved and used in applications.

2. It is difficult to obtain data directly from Ethereum nodes to support web pages or mobile applications

3. The Web3 stack is missing an index and query layer

With The Graph, data queries are processed on a decentralized network, ensuring open data and sustainable operation of dApps . dApps using The Graph will be service-free, meaning they will not rely on a single centralized server, thus reducing the possibility of downtime. Users do not have to trust a team to operate the server, and developers can deploy protocols to trusted public infrastructure that they do not have to spend their own time and energy to manage.

The Graph Network consists of Indexers, Curators, and Delegators who provide services to the network and provide data to Web3 applications. Consumers use applications and consume data.

1. Indexer

Indexers are node operators in the Graph Network who stake Graph Tokens (GRT) in exchange for providing indexing and query processing services. Indexers earn query fees and Indexer Rewards for their services. They also earn money from a rebate pool shared by all network contributors in proportion to their work, as per the Cobbs-Douglas rebate function.

2. Curator

Curators are subgraph developers, data consumers or community members who deposit GRT to signal on a specific subgraph, indicating which APIs to index, and earn a portion of the GRT query fees through the subgraphs for which they signal, incentivizing the highest quality data sources. Of course, this is a little more complicated than staking directly to a node. In fact, end users have also participated in The Graph's ecosystem in various forms, such as the data display of many DeFi interfaces using The Graph's services.

3. Delegator

A Delegator is an individual who delegates their stake to an Indexer to contribute to securing the network without running a graph node themselves. By delegating to an Indexer, a Delegator receives a portion of the query fees and rewards earned by that Indexer. Delegators select Indexers based on performance on metrics such as query rate, past slashing and uptime, and index parameters such as fee cuts and rewards from Indexers.

Centralized service providers have great unilateral power to set rules and grant or revoke access rights to data. Usually, users have no say or awareness, and information is asymmetric. In a decentralized blockchain network, data is difficult to store in a format that can be used directly in applications, which makes it difficult and time-consuming to retrieve data, greatly affecting the user experience.

Previously, many teams overcame the problem by using centralized index servers, which retrieved data from Ethereum and stored it in a database. The API was public, but this approach felt a bit like returning to Web2. Users needed to trust these teams to run the servers continuously and correctly. Modifying data for some reason, being acquired, or simply making mistakes could lead to the termination of the project.

The value of decentralized applications comes from openness, transparency, and no need for permission. You don't have to trust any specific company to use, expand, and combine functions.

Both The Graph and Chainlink are key middleware that make decentralized applications possible. The collaboration between the two parties provides Chainlink with more potential data sources for the data indexed in the subgraph. Indexing data and transmitting that data to smart contracts is a natural combination, so that data can be better transferred from on-chain to off-chain and from off-chain to on-chain.

Oracles like Chainlink bring Web2 data into Web3. For example, the most important application is to feed digital currency price reference data to decentralized exchanges and lending platforms.

Through its partnership with The Graph, Chainlink can provide key on-chain metrics directly to projects in near real-time, reducing latency and better shaping the user experience. This provides developers with tools to build powerful, truly decentralized applications using indexed data.

Specific examples include:

1. For example, using subgraphs to classify on-chain liquidity to calculate and cross-compare slippage on other Dex;

2. Use the subgraph to classify the average gas fee of each block to calculate the recommended gas fee;

3. Use subgraphs as APIs to integrate real-world off-chain data into decentralized applications.

4. For example, games, user identities, off-chain financial assets, etc. Synthetix is ​​a good example, which uses Chainlink pricing and subgraph-indexed data to enhance their exchange user interface experience. Decentralized applications will only have a chance to replace centralized applications if they improve the user experience to the same or even better level.

On December 17, at 9 am Pacific Time, The Graph Network launched its mainnet, the first global and easily searchable blockchain data index. It allows developers to easily search, find, publish and use the public data needed to build decentralized applications without relying on centralized servers and proprietary infrastructure.

The Graph Network greatly expands the accessibility of decentralized applications through public and open APIs , called subgraphs, which are used by hundreds of applications today.

Currently, more than 200 indexers have deployed nodes in the testnet, and more than 1,600 people have successfully completed the Curator Program to learn how to identify high-quality subgraphs. Since June, the use of the hosting service has grown rapidly, from 1 billion queries per month in November to 10 times that in October. Subgraphs have been used by top applications such as Curve, Zapper, Uniswap, Decentraland, PoolTogether, etc.

Additionally, through public GRT promotions, the Graph community welcomed over 4,500 delegates who can contribute to the network by delegating their stake to Indexers. The Graph community members are currently in over 100 countries and growing.

GRT and smart contracts will be deployed on the Ethereum mainnet. At that time, Indexers will be able to process queries and earn query fees and indexing rewards. There will be a user interface to stake coins to Indexers.

GRT will be distributed to fundraisers when the mainnet goes live, and those who participated in the curator program will also receive the original GRT rewards . Coins obtained from participating in the testnet and coins from our supporters will begin to unlock. During the lock-up period, the coins cannot be transferred, but users can use them to participate in staking.

The main focus of the mainnet launch will be to ensure a healthy supply to the query market. As confidence grows, the number of participating nodes and stakers is expected to increase. Query volume will grow organically in the weeks and months after launch. This will require a community-wide effort, so we hope and invite the entire Defi and Web3 ecosystem to participate in the development of the network.

The Graph can be said to be the core tool component and backbone middle-layer infrastructure of Defi and the entire Web3. One of the necessary conditions for the emergence of killer decentralized applications is to provide a user experience that is not inferior to or even better than centralized applications.

The emergence of The Graph makes this possible. The maturity of Web3 tools and service protocols will attract more outstanding developers and applications to jointly build the ecosystem. At the same time, it will also accumulate more blockchain data and give rise to more demands for efficient acquisition of effective data.

We have reason to believe that the entire ecosystem will become more prosperous in the future and the entire industry will develop in a healthy and stable direction.