How Will The Graph Affect The Future of ETHEREUM?

The Graph is considered an integral part of Web3. I hope by the end of the article, we will find out why. But, before we dive into today’s topic, let’s first understand the concept behind The Graph.

The Graph is based on the simple principle of indexing. Indexing can be understood through a real-life example: indexing in a book. The index of a book is sorted alphabetically, which drastically reduces our time to reach the desired chapter in a book. We could only imagine how incompetent of a process that would be!

Similarly, in computer science, databases have the same use-cases. Now, in blockchains such as Ethereum, indexing is quite significant.

A typical blockchain contains blocks that contain transactions, and these blocks are connected adjacently to each other. In order to search for a particular transaction, it will search in one block, and if the transaction is not found there, then it will move to the second block, and so on; this process is time-consuming and complex.

A group of developers realized that there is a lack of tooling in the Ethereum ecosystem and created The Graph in 2017. After going through many iterations, the Graph finally went live in 2020.

The Graph is an indexing protocol used for querying data in blockchain that facilitates the development of fully decentralized applications. It is used for querying networks such as Ethereum and IPFS.

Blockchain explorers such as Etherscan build their own blockchain and store their data in a database that enables quick retrieval of data. These services are called ingestion services. Though this approach is perfectly fine, it requires trusting a third party to provide data, which isn’t suitable for building a decentralized application.

Basically, what The Graph does is decentralizes the query layer and the API of the internet application stack. The Graph eliminates the dependency on a centralized service provider, making the process of querying data on blockchain efficient for the first time. The Graph allows anyone to develop and publish open APIs, called subgraphs. Thus, making data easily accessible.

In order to participate in The Graph Network, any Indexer can stake Graph Tokens (GRT) and earn fees for serving queries on those subgraphs and rewards for indexing subgraphs. By paying for their metered usage, consumers can query this diverse set of Indexers.

Vitalik Buterin On The Graph

In 2021, Vitalik Buterin, founder of Ethereum, dropped the name of The Graph as a viable data storage solution while addressing the roadmap for the ecosystem.

He signified that Protocols such as The Graph can “create incentivized marketplaces where clients pay servers for historical data with Merkle proofs of its correctness.”

This led to the creation of an incentive for both institutions and individuals to operate servers that store historical data and deliver it on demand, Buterin further explained.

Now, it is inevitable that the data on blockchains are going to increase by leaps and bounds with the rise in the popularity of NFTs, digital assets, the Metaverse, and Web 3.0. Therefore, the need for indexing will become even more vital.

Therefore, the platforms such as The Graph will become more significant in the coming years. Ethereum is already leveraging The Graph for querying the data. It would be interesting to see how compatible this combination will be in the future or if Ethereum decides to integrate similar features into its ecosystem.