The Graph - $GRT, Asset Review
General Information-What is The Graph
The Graph Background
The Graph Funding/Collaboration
Token Information-Tokenomics
Staking/Governance
Additional Information-
What’s Next?
Technical Analysis
Conclusion
General Information-
What is the Graph
The Graph is an indexing protocol for organizing and displaying data for blockchains. In some ways, The Graph is similar to Google on how it displays data. The way Google displays verifiable information from the internet on their site(google.com) is what The Graph does for blockchains. By using The Graph protocol it allows developers and builders to create their own unique set of data to their liking. The Graph makes it easily accessible for applications to plugin The Graph’s API making it cheap, reliable, and fast for data access across the crypto economy.
Figure A
2. The Graph Background
The Graph Protocol Inc is a project based out of San Francisco, California, and founded by Brandon Ramirez, Jannis Pohlmann, and Yaniv Tal in 2018. The founders created The Graph because they saw data was hard to access in the blockchain space. So they created an API that is called a “subgraph” that links on-chain data to any application that is being built by developers. It is also important to note that the only network The Graph supports is the Ethereum network with plans to add more chains. All founders have backgrounds in technology and experience in software engineering.
3. The Graph Funding/Collaboration
The Graph held and raised money two times in 2020, one was a private sale and the other was an ICO. The Graph was able to raise about 20 million dollars from both offerings. The Graph has prominent investors like ParaFi Capital, Coinbase Ventures, Digital Currency Group, CoinFund, Multicoin Capital, and more. Today, The Graph’s subgraph API has been utilized across many well-known networks like Uniswap, Decentraland, Audius, Polygon, CryptoPunks, and many more. There is a total of 441 applications utilizing the subgraph on the Ethereum chain. Lastly, The Graph Foundation Awarded Messari a $12.5 million developer grant to build and standardize subgraphs.
Figure B
Token Information-
Tokenomics
$GRT is the native token for The Graph’s network. Currently, their circulating supply is 7,400,273,157 billion tokens, with a capped total supply of 10,000,000,000 tokens according to CoinGecko. $GRT is a token that is utilized to pay protocol participants to index their work. Per Figure D, users can earn income based on the work they perform in $GRT stake. At launch, 12.5% of the supply was released and the rest of the tokens will be issued over time per the below image. The issuance chart may* be used to help investors decide when to buy or sell as they are released too early investors.
Figure C
2. Staking/Governance
$GRT token holders may contribute to the network by staking. Staking rewards vary but on average are 3% from the official website. $GRT also has a burn mechanism that deducts 1% of a stake when depositing into the network. Centralized exchanges sometimes offer $GRT staking but also vary as pools quickly fill up. The Graph council is a team of people who want to introduce protocol governance. This idea was proposed in 2020 but has not been implemented yet.
Figure D
Additional Information-
What’s Next?
The Graph is an intelligent protocol that makes it easy for chains to access data using subgraphs, but what’s next? We already know that Ethereum is the main chain that drove adoption for The Graph. Most recently they hinted at adding a new chain, for developers to continue building out the network. This is extremely fascinating because $GRT grew to 5.7 billion dollars in market cap with only one chain. With the addition of more chains, and more utility we may* expect an even higher valuation. Another announcement that was made was “nested queries” which allow more filtering when using subgraphs giving more customization for developers. Despite the market downturn, the team behind The Graph is working around the clock.
Figure E
2. Technical Analysis
Figure F
$GRT has had an amazing run from $.10 to $2.9 yielding ~28x + returns. Since the all-time highs have been hit it's mainly been down-trending. It is best to wait and let the dust settle as bottoms take a long time to form. Currently, there is no support and the price recently hit an all-time low. So it's best to be sidelined until more data is presented. However, if the price recovers back to 0.10 cents it may* become a zone of interest as its ranges.
Conclusion
I believe The Graph protocol is set up to do wonders in the future. With an idea like subgraphs, it is quite difficult to imagine most blockchains not adopting free data to only benefit them. This technology has gone far with only one chain support, can you imagine what will happen as more and more chains are added? The demand for $GRT will continue to rise and more people will rely on The Graph’s protocol. Also, earlier this year The Graph also launched a 200 million-dollar ecosystem fund that will continue expanding the network. I think it's clear that The Graph is unique and not going anywhere anytime soon. The only complaint one may have is the vesting schedule. Some may look at the vesting schedule as a problem while others may look at it as an opportunity in the long* term. Lastly, while I am bullish on The Graph, it doesn’t mean it's correlated to the value of the $GRT.