Only one The Graph away from complete decentralization

Whenever we do anything online, we generate data all the time. At the end of each year, various annual lists such as payment, listening to music and take-out food are posted on Moments, all traces of our interaction with the Internet.

This is where APIs come in. Application Programming Interfaces, as the name implies, are software-to-software pages that allow applications to exchange data. This may seem like a programmer term, but it has a lot to do with everyday life.

For example, we use WeChat to transmit information, or through the market software to see the market, are connected to the Internet through the mobile phone application, and then through the Internet and the database interaction. The database is responsible for unlocking the required data, analyzing it, and transmitting the required information back to the phone in a way that we can understand after completing the instructions.

In the world of Internet giants like Alibaba and Meituan, people are used to using APIs to save time in the world of Web2. In the Web3 world, interactions also produce data, and the Web3 API is just as important.

APIs in the Web3 world

Capital has sniffed the blue ocean.

Nansen received a $1.2 million seed round led by Mechanism Capital and Skyfall Ventures, Dune Analytics received a $2 million seed round led by Dragonfly Capital, and API providers like GlassNode have become some of the industry's most used data providers.

In a blockchain system, data is encrypted and integrated into blocks and then recorded in a series of chains in distributed nodes. The data after being linked becomes a history that is extremely difficult to be changed. It is often difficult to work with on-chain data.

First of all, the data on the chain is stored in a distributed network composed of thousands of nodes. From the perspective of data reading, the difficulty of reading a distributed database is much greater than that of a centralized database.

Secondly, the data on the chain is encrypted to varying degrees, which makes the data on the chain very difficult to parse. Not only that, because the data on the chain is arranged in sequence by the block, the usual way to find the data on the chain is to search from the first block in the whole chain, and search in sequence by the block, which is very inefficient.

Since Ethereum is the most mature ecosystem for on-chain applications, we analyzed the on-chain data as an example. Before The Graph, there were two main ways to get data on The Ethereum chain: directly from The Ethereum node using web3.js /ethers.js or by setting up a centralized server to organize The data.

However, both solutions have their drawbacks. If a self-mounted server is chosen, it requires a large amount of hardware resources (running Archive Node), is expensive and difficult, and the server maintenance overhead is very high.

Using web3.js /ethers.js to get on-chain data directly from an Ethereum node would result in a longer and less efficient response time to requests and a single point of failure risk for the application if a node service provider like Infura is used. In & have spent On November 11, 2020, because Infura was not running the latest version of the Geth client, some special transaction triggered a Bug on the older version of the client, eventually causing many applications using Infura to temporarily go down.

Of course, there are professional data API providers like GlassNode, Nansen, and Dune Analytics, all of which are backed by top-tier capital, proving the value of on-chain data and the importance of on-chain APIs.

However, the centralized service providers naturally inherited the defects of the Web2.0 era, and all users who use the products of the centralized service providers will be at risk of rent-seeking in the future. It is not desirable to solve the problems in Web3 in a centralized way, and decentralized applications are not completely decentralized. To fully solve the problem, we need a decentralized data middleware.

Decentralized data middleware The Graph

The Graph, as an infrastructure for building fully decentralized applications, addresses The tradeoff between performance and decentralization for developers by targeting The API layer for on-chain data queries and decentralized networks. Many of you may not know that Coingecko, CoinMarketCap, Messari, Delphi Digital, Zapper, Uniswap, Synthetix, Pooltogether, LivePeer, MSTable, and Balancer are already using The Graph for their services.

The Graph node, which plays The role of data indexer in The network, is also The core component of The network and provides indexing and query services for The network. Just like the nodes in the POS network, the node operators need to pledge GRT tokens and get the query fee as well as the additional issue incentive from the network. Delegator can pledge the GRT to a trusted node without running the node and share the revenue with the node.

Subgraphs define the data query logic for different applications, and because anyone can write subgraphs for different applications, the quality varies. The Graph node retrieves The highest-quality SubGraph and uses its query service. Toth is the key to ensuring the quality of the Subgraph. Toth pledges GRT tokens to the Subgraph that it thinks is of the highest quality and will be called the most frequently and shares the cost of its query.

By Delegator and Curator's pledge, The indexer market and Subgraph market are formed in The Graph network, and The market competition guarantees The quality of The data provided by The Graph.

Subgraph for everyone to use

All applications are producing all kinds of data all the time. As mentioned above, the subgraphs of different applications tease out the most common data access paths for the retrieval nodes. At The time of writing, The Graph has over 8,000 different subgraphs in its network.

With our current most traded decentralized Uniswap trading platform as an example, in the image below you can see, in the Subgraph Uniswap can track the current state of the contract and the historical data and price, including trading of summary data, each transaction and tokens of individual data, within the contract transfer data, liquidity provider and so on.

Through The Graph's nodes, The user can call The Uniswap data to achieve a true on-chain search. Unlike other tools that can only see information provided within The platform, The Graph allows users to actually search on The chain.

Each DApp has multiple subgraphs provided by different developers, and different subgraphs provide different data categories. The Graph node will index The corresponding high-quality SubGraph on demand, forming an on-chain Google.

How can ordinary coin holders participate in The Graph

If GRT holders want to participate in The Graph Network, they can do so in three ways: by being Delegator, Curator or running node.

Being Delegator is The easiest way to participate in The Graph network. The holder only needs to select nodes in The Graph browser to pledge. Different nodes charge different fees, and holders choose according to their preferences. The difference with POS network pledge is that The Delegator in The Graph network does not have forfeiture risk, and The pledge income is proportional to The node income.

Compared with Delegator, if The holder wants to participate in The Graph network as a Curator, The difficulty is slightly higher. Since co-curator is responsible for sorting the subgraphs in the network, coin holders need to consider the merits of each Subgraph for themselves. The holder informs a token by pledging the GRT into the union curve of the Subgraph, which represents the holder's share of the revenue from the Subgraph query. In the future, the holder will redeem the locked GRT by destroying the revenue token.

Of course, if The coin-holder has a certain understanding of node operation and maintenance, he can directly participate in The network by running The Graph node. The minimum number of GRTs required to be pledged by the current running node is 100,000. Although The income of node operators is much higher than that of Delegator and Toth, The code-holder needs to run The Archive node of The retrieved chain at The same time as The Graph node, so The cost will be greatly increased.

Unleash the infinite possibilities of the Web3 world

Killer apps require the right tools. The Graph is a necessary tool for The next generation of application innovation, as The next generation of application innovation is based on The interaction between data on The chain.

With The help of The Graph, on-chain data can be more effectively mined and utilized. From the perspective of data analysis, with more and more comprehensive data being discovered, the valuation of on-chain native assets will no longer be a problem, as Ark Invest has done in the pastOn-chain Data: A New Framework to Evaluate Bitcoin", when the traditional valuation model cannot clearly estimate the assets on the chain, the on-chain data can provide more accurate answers. On-chain data can not only help to discover the value of crypto assets, but can also be used to further optimize the application by analyzing user usage data.

From The perspective of application innovation, The data generated by various applications used to be like thousands of islands. The Graph allows these data to be used flexibly. The Graph Foundation is currently exploring ways to support other underlying infrastructure beyond Ethereum and IPFS, and today it announced new support for Solana, Polkadot, Near, and Celo public chains. In the future we will see the interplay of data across thousands of chains, and that interplay could be the key to unlock the next killer app.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia