Research Summary
The report provides an in-depth analysis of The Graph’s performance in Q2 2023. The Graph, an indexing protocol that provides on-chain data to consumers, saw a 39% quarter-over-quarter (QoQ) increase in the number of subgraphs published from its hosted service to the decentralized network (mainnet). However, it experienced a 48% QoQ decrease in demand-side revenue in USD, attributed to dapps optimizing query volumes and a reduction in usage from governance activities and decentralized infrastructure. Revenue from indexing rewards increased by 3% QoQ to over 9 million USD. Following the MIPs incentive program, The Graph’s active Indexers decreased by 29% QoQ, while Delegators and Curators grew by 2% and 3%, respectively.
Actionable Insights
- Monitor the ongoing L2 migration: The Graph’s protocol smart contracts are migrating to Arbitrum, aiming to provide a seamless and gas-efficient decentralized data experience to users. This migration is expected to influence future performance.
- Understand the impact of dapps optimizing query volumes: The decrease in demand-side revenue in USD was driven by dapps optimizing query volumes. This trend could have implications for The Graph’s revenue model.
- Keep an eye on the growth of Delegators and Curators: Despite a decrease in active Indexers, Delegators and Curators experienced growth. This could indicate a shift in the ecosystem’s dynamics.
