GRT, the token that powers The Graph network, a decentralized protocol for indexing and querying data from blockchains, is enjoying a massive rally. With the latest spike in prices, the market capitalization of GRT has once again surpassed the $1 billion mark, according to data from CoinGecko.
The $1.6 billion cryptocurrency is trading at above $0.184, up more than 40% in the past 24 hours at the time of writing. Much like the broad cryptocurrency market, GRT’s price has been enjoying an uptrend since the beginning of 2023. The coin is up 180% in the last 30 days and over 215% in the year so far.
With these spikes in price, the 40th largest cryptocurrency by market cap, GRT, is currently one of the best-performing crypto assets in the market. In the past 24 hours, GRT has recorded the most gains while it is the 3rd largest gainer in the past week.
Despite these gains, the price of GRT is down about 94% from its all-time high of $3 in February 2021.
GRT, the native currency of The Graph ecosystem, is an ERC-20 token that is used by network participants who need to stake GRT in order to contribute.
Click here to learn all about investing in GRT.
The Infrastructure Layer of Web3
Launched in July 2018, The Graph protocol was co-founded by Brandon Ramirez, Yaniv Tal, and Jannis Pohlmann. The development of the Graph ecosystem is managed by Edge & Node, previously known as Graph Protocol Incorporation.
The Graph (GRT) is a protocol designed to make it easier to access and index blockchain data. Process-wise, The Graph works similarly to how Google indexes websites, as it indexes records from blockchain networks like Ethereum and provides a global data layer for the decentralized web, making it easier to find and use data from blockchains.
It currently supports indexing data from 26 different blockchain networks, including Ethereum, Near, Arbitrium, Optimism, Polygon, Avalanche, Celo, Fantom, Moonbeam, and IPFS.
The protocol’s ultimate goal is to make it easy, quick, and secure to query data stored on the blockchain. This is done by using subgraphs, which are like open APIs that specify which Ethereum data the protocol should index and how it should be stored. With just a few keystrokes, this data can be transformed, categorized, and shared across apps for anyone to query and then saved and processed securely on open networks.
The Graph basically aims to provide the infrastructure layer for Web3 by serving as an integration layer for DApps.
The protocol is administered by a decentralized network of participants, including indexers, who run the servers that supply data; curators, who organize data; and delegators, who stake their tokens to provide security to the network. These participants feed data to Web3 applications, and subsequently, consumers interact with the apps and consume the information.
Indexers, curators, and delegators who provide services to the network can earn revenue from the network based on their work and how much GRT they own. GRT token is used to allocate resources and maintain the economic security of the network.
Lately, the GRT has been gaining a ton of traction in the cryptocurrency market, and as such, many are beginning to predict bullish price movements for the coin.
What’s Behind the Spike?
The Graph (GRT) is a fast-growing token, and its price action is more than just speculation. The project has actually been attracting major investor communities and surpassing expectations as its network developments continue to grow.
One of the reasons for this spike in GRT’s price is the Artificial Intelligence (AI) narrative playing in crypto. Much like how in 2021, Metaverse was the talk of the town after Mark Zuckerberg changed Facebook’s parent brand name to META, the narrative this time around is AI.
And with AI tool ChatGPT and now Bard making a noise around the world, AI-focused tokens in the crypto market are recording a surge in value.
While AI crypto tokens don’t have any association with ChatGPT, any crypto project that has remotely anything to do with artificial intelligence is getting investor and trader attention and helping these coins pump in a bear market.
The Graph currently acquires a first place in terms of market cap on CoinMarketCap’s rankings of the “most valuable AI and big data crypto projects and tokens.”
A recent study from tradingbrowser.com actually showed that The Graph is by far the most-searched AI/data-related crypto over the past 12 months, with a monthly average global search volume of 8,100 at the time of the study. According to the Trading Browser study, the highest search was seen for the term “Graph Crypto.”
The ChatGPT effect is affecting not only GRT but other related tokens, too, such as Singualtiy.net, Fetch.ai, and Ocean protocol, among others. But for GRT, it’s more than just an AI effect.
The Continued Growth
The increase in the value of the indexing protocol’s price reflects The Graph network’s significant ecosystem growth in 2022, particularly during the fourth quarter.
According to a Messari report from February 2023, in the fourth quarter of 2022, The Graph network saw growth in various metrics, starting with subgraphs. As of Q4 2022, 618 subgraphs have migrated from The Graph’s hosted service to the decentralized network, which is an increase of 25% QoQ and 151% YoY.
The Graph protocol is currently a hybrid of its hosted service and mainnet, with the first subgraph launched on the mainnet in Q1 of 2021. In November 2022, the Graph team launched Substreams to speed up indexing by allowing data to be transformed in parallel.
This growth in the number of subgraphs launched on mainnet has been steady over the past six quarters as several prominent Web3 companies like Oasis, Solana, and Request leverage subgraphs and substreams to execute their data strategy and retain data transparency.
Besides subgraphs, the ecosystem of The Graph saw continued growth in its active Indexers (+33%), Delegators (+9%), and Curators (+2%). Curators are currently signaling over 26 million GRT, which is about 0.4% of the circulating supply, toward The Graph’s active subgraphs. The highest amount of GRT is signaled toward the Livepeer, Premia, and Snapshot subgraphs.
Meanwhile, all 424 Indexers have allocated their own stake towards their subgraphs to earn staking rewards. The minimum stake for an Indexer is currently set to 100,000 GRT (worth about $18,000 as of writing).
In total, more than 2.9 billion GRT tokens are staked, which is 39% of the circulating GRT supply as of Q4 of 2022. The GRT token follows the Stake-for-Access model, meaning participants in The Graph’s ecosystem need to stake their own GRT tokens to earn revenue for indexing and querying services.
With network participants recording strong growth, The Graph experienced a 66% QoQ and over 6,200% YoY increase in its GRT revenue from query fees. In USD terms, this amounts to a 5% quarter-over-quarter increase and a 265% year-over-year rise.
Besides all this, through its Multi-Chain Incentivized Program (MIP), the Graph network aims to fund 75 million GRT to Indexers supporting new chains on the decentralized network. Out of this 0.75% of the total GRT supply allocated to the program, 50 million GRT will be allocated to the reward pool for Indexers, while 25 million GRT will be distributed as grants for new subgraphs. The six-month incentive program will be launched after the decentralized network goes live.
With all this growth experienced by The Graph this past quarter, it only makes sense that the GRT price is pumping.
Focus on Building
The Graph’s primary focus is on migrating from a hosted service to a decentralized network. It already has a vast ecosystem — with support for 26 different blockchain networks. Meanwhile, its subgraphs are used by Uniswap, Synthetix, KnownOrigin, Gnosis, Balancer, DAOstack, Audius, and Decentraland.
A year ago, the startup that likens itself to Google for indexing information on blockchains also raised $50 million in a funding round led by Tiger Global Management with other participants including Fenbushi Capital, Blockwall Digital, FinTech Collective, and Reciprocal Ventures.
In total, the project has raised $69.6 million, according to Crunchbase, which means it can focus on the development part without worrying about the ongoing bear market.
Not to mention the project has been seeing an increase in its revenue, which is “expected to continue to rise as more subgraphs are migrated to mainnet in the coming quarters.” This will, in turn, attract more key participants to the protocol, as it drives profitability for existing ones.
“By adding more subgraphs, The Graph will continue to remove technical barriers for developers, ultimately leading to faster innovation across Web3,” stated the Messari report.
Final Word
As we saw, the Graph network continues to grow, which means so will its demand. This could lead to an increase in investor interest in GRT tokens, which already reflects in market activity.
However, the future of GRT, like the majority of cryptocurrencies, is uncertain, but one thing is pretty much assured; with its network developments and its growing popularity, The Graph is expected to see more adoption and will position itself among the strongest projects in the crypto space.
With the AI narrative gaining strength and investors bullish on the project’s future prospects, GRT is well-positioned to continue its bullish momentum.
The post The Graph (GRT) Enjoys a Massive Rally as the Network Grows at a Fast-pace & AI Narrative Takes Hold appeared first on Securities.io.
