Research Summary
The report provides a comprehensive analysis of The Graph’s performance in Q3’23, highlighting key metrics such as the growth of subgraphs, query volume, and the activity of Indexers, Delegators, and Curators. It also discusses the protocol’s migration to Arbitrum One, changes in revenue, and the introduction of new proposals and initiatives.
Key Takeaways
1. Growth and Migration of Subgraphs
- Subgraph Expansion: The number of subgraphs published on The Graph’s decentralized network increased by 22% QoQ, reaching a total of 1,322 subgraphs as of Q3’23. This growth indicates a steady increase in the use of The Graph’s services.
- Migration to Arbitrum One: The Graph completed the migration of its protocol smart contracts to Arbitrum One, enabling the transfer of delegations, subgraphs, curation signals, and indexer stakes. This migration is expected to improve various metrics and remove technical barriers for developers.
2. Changes in Query Volume and Revenue
- Increased Query Volume: Query volume on The Graph increased by 39% in Q3’23, indicating a growing demand for The Graph’s services.
- Decreased Revenue: Despite the increased query volume, demand-side revenue in USD decreased by 52% QoQ due to optimizations in query pricing. Additionally, revenue from indexing rewards decreased by 19% QoQ to over $7.3 million in Q3’23.
3. Activity of Indexers, Delegators, and Curators
- Decrease in Active Indexers: The number of active Indexers on The Graph decreased by 41% QoQ, potentially due to the conclusion of The Graph’s Multi-Chain Incentivized Program and some Indexers un-staking their GRT.
- Growth in Delegators and Curators: The number of Delegators and Curators grew by 247% and 5% respectively, driven by a Coinbase Earn campaign and the migration to Arbitrum One.
4. Distribution of Indexing Rewards
- Indexing Rewards: Indexing rewards decreased 19% QoQ to approximately $7.3 million in Q3’23, but remained relatively stable in GRT terms. Delegators received 65% of the total indexing rewards distributed in Q3’23, indicating a significant share of rewards for Delegators.
5. New Proposals and Initiatives
- Introduction of CIP: The Chain Integration Process (CIP) was introduced as a community-led initiative to integrate more chains into The Graph Network.
- Formation of TAB: The Graph Council plans to form a Technical Advisory Board (TAB) to support core contributors in accelerating R&D efforts. The board aims to review Graph Improvement Proposals (GIPs) to increase confidence in approving technical proposals and software upgrades.
Actionable Insights
- Monitor the Impact of Arbitrum One Migration: Stakeholders should observe the effects of The Graph’s migration to Arbitrum One on the protocol’s performance and metrics.
- Assess the Implications of Query Pricing Optimizations: The decrease in demand-side revenue despite increased query volume suggests that the optimizations in query pricing may have significant implications for The Graph’s revenue model.
- Consider the Role of Delegators and Curators: The significant growth in the number of Delegators and Curators and their share of indexing rewards indicates their increasing importance in The Graph’s ecosystem.
- Understand the Impact of New Proposals: Stakeholders should understand the potential impact of new proposals and initiatives, such as the CIP and the formation of the TAB, on The Graph’s operations and future development.
