I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.
See all posts Frank GogolComplete Guide to Graph Crypto
Updated on April 9, 2024
Written by
Written by
Reviewed by
Rohit Mittal
Reviewed by
Rohit Mittal
Rohit Mittal is the co-founder and CEO of Stilt. Rohit has extensive experience in credit risk analytics and data science. He spent years building credit risk and fraud models for top U.S. banks. In his current role, he defines the overall business strategy, leads debt and capital fundraising efforts, leads product development, and leads other customer-related aspects for the company. Stilt is backed by Y Combinator and has raised a total of $275M in debt and equity funding to date.
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At a Glance: The Graph Crypto is a data management service for blockchains, collecting data and presenting it to programmers for use in their applications. It operates in a partially decentralized manner, with curators selecting high-quality data, indexers processing it, and delegators staking Graph tokens (GRT) on behalf of users. GRT is used for payments and rewards within the Graph ecosystem. Its value is linked to the demand for the Graph service, making it valuable as long as the service is useful. Increased use of the service can drive up the demand and price of GRT.
If you keep up with cryptocurrency news, you may have started hearing a new name recently: The Graph. From the name, it is not clear whether Graph crypto is a coin, a token, or something else. This article will clear up some of your confusion. Read on to learn more about Graph crypto.
What is The Graph Crypto?
The Graph is a data management service for different blockchains. The Graph’s software can collect data from various blockchains, like Etheruem, and present it to programmers to use in their applications. The Graph is a type of software known as a developer tool. A developer tool is a software that programmers use to help them make other software.
The Graph was originally developed using a programming language called GraphQL and used for Ethereum only. The service has since expanded to other blockchains. In a way, the Graph is like a search engine that searches blockchains rather than websites.
How Does The Graph Work?
The Graph operates in a partially decentralized way. The work of collecting data from various blockchains and presenting it for programmers to use is done by many different service providers. There are three types of service providers: delegators, indexers, and curators.
Curators are responsible for selecting which data from a blockchain is of the highest quality. They signal the quality level of the data by linking it with a certain amount of GRT, the Graph token.
Indexers take the data chosen by curators and process it into a standard form that can easily be used by programmers who need it for their apps. To do this processing, indexers operate specialized software on computers called nodes. To discourage indexers from providing false or inaccurate data, the Graph requires them to ‘stake’ GRT. Staked GRT is taken away if an indexer provides bad data, whether by mistake or on purpose.
Delegators are the third type of service provider. Setting up and operating a node is a specialized and quite difficult task. For people who are unwilling or unable to set up a node, the role of delegator allows them to choose an indexer they trust and give the indexer GRT to stake on their behalf. Indexers with more GRT staked are seen as more trustworthy because they have more to lose by being dishonest.
Users of the Graph service—programmers making apps—pay for it in GRT. These fees are shared among curators, delegators, and indexers. The best-performing service providers get the most rewards. That means curators who select the best data, and indexers and delegators with the largest stakes earn more.
Overall, the Graph is a way of providing a blockchain search service that does not rely on a single company but on a large group of different people who don’t have to know or trust each other.
How is The Graph Different Than Other Cryptocurrency?
In terms of actually buying and selling it, Graph crypto is not different from any other cryptocurrency. It is a token on the Ethereum network and traded on major exchanges like other high-volume cryptos. The main difference with GRT is that its value is linked to demand for a very particular service: the Graph. Since GRT is used in every aspect of the Graph service, the more the service is used, the more demand there will be for GRT.
This situation is quite different from other coins and tokens that are positioned as currencies or assets. The demand for these other types of crypto assets is linked to their desirability and market opinions. Both of these things can change extremely quickly. An example of this is the rapid rise and fall of the Safemoon memecoin.
Since the demand for Graph crypto is linked to the use of its data service, it is reasonable to assume that for as long as the Graph is a useful service, GRT will be a valuable cryptocurrency.
The Graph FAQ
Now that you have learned about the basics of the Graph, here are some Frequently Asked Questions about this service.
How does the Graph crypto work?
The Graph operates in a partially decentralized way. That means the work of actually getting the data from the various blockchains and then presenting it for others to use is done by many different people.
Delegators provide GRT to indexers to stake. Indexers operate computers called nodes which prepare the data so it can be used by programmers making apps. Curators choose which data on a blockchain is of the highest quality, then pass it on to indexers and their nodes.
The programmers who use the Graph for their apps pay for the service using GRT. The payment is shared among indexers, curators, and delegators.
What is GRT crypto used for?
Indexers, delegators, and curators are rewarded for their work using the Graph crypto-token, GRT. Indexers also have to ‘stake’ GRT when providing their services. Staking means that if an indexer provides false or inaccurate data, they lose the GRT they staked. Staking is a way of ensuring users act honestly.
The combination of staking and rewards using GRT provides a data service that does not rely on a single company or group of people but many different people.
Why is Graph crypto going up?
In complex financial markets, it is always a bad idea to try and explain price movements with a single, simple reason. With many different participants, each with their own goals, it is impossible to make accurate general statements about a market. However, since GRT is used in every aspect of the Graph’s service, it is reasonable to assume that increased use of the service causes an increased demand for GRT. This increased demand may be the cause of an increase in the price of GRT.
Read More
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Conclusion
Hopefully, it is now clear that Graph crypto is not quite the same as other cryptocurrencies. The token GRT exists to serve a specific purpose in the Graph’s data management service. Since GRT is traded the same as any other token, you can take advantage of its rising price.
Frank Gogol
I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.