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Tutorial: How to Signal on The Graph

Vajresh Balaji
Vajresh Balaji
0x7721
July 23rd, 2021

What is The Graph?

The Graph is a decentralized protocol for indexing and querying data from blockchains. If you are building an application that accesses data from the blockchain, it might take a long time to look through each block on the blockchain and extract relevant data. To solve this issue, you could build your own service to index data and store it in a conventional database. But this takes time and money.

Here’s where The Graph comes in. By allowing multiple types of network participants with specific roles, The Graph enables developers to build applications that can access blockchain data in a decentralized way without sacrificing performance. This

Let’s look at the participants in The Graph ecosystem.
Indexers: They stake GRT tokens and operate a Graph Node to index relevant data and process queries. They earn Indexing Rewards and Query Fees. Indexers are incentivized to serve correct data as their staked tokens will be slashed if they act maliciously.
Delegators: Delegators stake their GRT tokens on behalf of one or more Indexers. As a result, Delegators earn a portion of the Indexer rewards and Query fees without running their own Graph Node.
Consumers: These are the application developers that access data and pay for queries.

How do Indexers identify data that is relevant and store it in a suitable format? Here is where the next participant comes in.

Curators
Curators identify subgraphs that are important and of high quality by using their GRT tokens to signal to Indexers, who then proceed to index data and process queries. Curators also earn a portion of the query fees, which incentivizes them to curate data sources that are of high quality.

Risks of being a Curator

Bonding Curve Risks

When you use GRT tokens to signal on a subgraph, you deposit GRT in return for Curation Shares minted on a Bonding Curve. The Bonding Curve defines the relationship between the price of Curation Shares and its supply. This means that each additional Curation Share costs more than the last one.
Bonding Curves are volatile, and there is a possibility that you might receive less GRT than when you started.

Subgraph Assessment

If you falsely assess the quality of a subgraph and signal on a subgraph that may not receive many queries, you may risk earning very little or no query fees at all.

Costs of Being a Curator

  • GRT Tokens
  • ETH for Gas Fees
  • A 2.5% Curation Fee charged by the protocol.

How to Curate a Subgraph on the Graph?

  • Purchase GRT Tokens on Uniswap or an exchange of your choice.
  • Head over to the Graph Explorer and choose a Subgraph that you’d like to Signal on. For this example, I will select the ENS Protocol Subgraph to walk you through the steps. Feel free to choose one that you find interesting!
  • Connect your Wallet by clicking on the top right. Once connected, click on the Signal button, and you’ll be greeted with this.
  • You can see the price per Curation Share denominated in GRT. The bonding curve calculates the price of each Curation Share. The number of Curation Shares in existence and their total value (in GRT) is also displayed.
  • Click on signal to deposit your GRT in return for Curation Shares. This step also requires you to spend ETH on gas fees.
  • The interface will now display your curation shares and their value (in GRT).

Congratulations on becoming a Curator on The Graph!

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