We live in a very dynamic environment and this month was very busy on the Web3 arena in particular. The Graph protocol is one of the leading Web3 infrastructure protocol has released some important updates this month. Let’s look at those in various perspectives.
Month ago, The Graph Foundation has announced the migration plan of three phases:
- Phase 1 — Migration Bootstrapping.
- Phase 2 — Production Dapps
- Phase 3 — Curation Live.
Week ago, The Graph announced the Scalar, the micro transaction solution developed on the Connext Vector protocol and Ethereum State Channels.
Yesterday, Phase 1 has arrived, with a deployment of the first ten production subgraph on The Graph Decentralized Network.
Great news and busy times for all.
What does it mean and what to expect? Let’s look at it in perspective.
Scalar is a new component within the Indexer infrastructure, which needs to be integrated and tested on the testnet first, followed by the production upgrade. This is exciting news for all technical geeks. The grassets-tech team has already deployed a vector node in the testnet and encourages all other indexers to join the testing to bring the scale to the testing and to try new products in a safe environment.
Multiple subgraphs bring us challenges. Determining which subgraph to index and what cost model to use when the queries will come. How to manage allocations efficiently and be ready to scale as fast as the query may grow. Compete with other indexers for the Indexer Rewards and Query fees. There is no silver bullet in doing it right. The environment is extremely dynamic and there is more uncertainty than even the known ones. Finally it significantly increases our costs of operation.
This means some indexers will perform better than the others, and unfortunately some indexers may find themselves not breaking even and may convert into delegators and curators.
Although Delegators are considered relatively passive actors who do not need to act on a daily basis for their stakes to grow, The Graph protocol has already proven that is not the case here. Not straightforward Indexer Reward cuts and even more complex Query fee cuts made delegators life a bit more complicated. Now, with the migration of the new subgraphs the APY figures discussed and calculated in the space may only represent an estimation of the rewards for the few hours and could change significantly during the period of a week.
Now, Delegator’s rewards will depend not only on the cuts set by their Indexers, but also on the performance of the Indexers while competing with others for Indexer Rewards and Query fees.
Curators are now given an estimate for the go live and can start preparing. We expect the Phase 3 — Curation Live will come in early summer. Before that, those who can’t wait and technically savvy can interact with the contract directly. Although we would not recommend anyone to go ahead with the curation until the official Phase 3 announcement, those who are willing to bear the risk can already signal on the recently migrated subgraphs.
Enjoy the space!