The Graph
Time factors
| Protocol time | Human readable time | |
|---|---|---|
Protocol time 1 | Block | 12 seconds |
Protocol time 2 | Epoch (= 7,200 blocks) | 24 hours |
First reward delay | N/A | - |
Reward frequency | Every epoch | 24 hours |
Unbonding period | 28 days | 28 days |
The protocol follows the block times of where it is deployed. The main deployment is on Ethereum mainnet.
First reward and reward frequency will depend on when validators close their subgraph allocations.
Lifecycle
Must know before staking
Minimum stake amount | ❌ | |
Partial stake changes | ✅ | |
Partial reward withdrawal | ✅ | |
Compounding | ✅ | |
Penalty | ❌ | |
Slashing | ✅ | Incorrect indexing - 2.5% |
Validators are called Indexers in the protocol.
Delegation tax. The protocol burns 0.5% of a delegator’s staking amount when they stake.
Rewards are added directly to staking balance.
Slashing applies to the validator’s own stake.
Advanced topics
General
The Graph is a middleware protocol that helps developers to index and query data from blockchains.
The staking mechanism helps ensure the integrity of the data indexed and queried.
Validators run Graph Nodes to help index subgraphs and service queries from users. They are incentivized to service subgraphs that have high signal from curators and high demand from users.
Curators play a critical role.
Curators signal which subgraphs should be indexed by validators.
Curators’ signal determines the amount of indexing rewards that gets distributed to each subgraph.
Curators earn 10% of the query fees from the subgraphs they signal to. They do not earn any of the indexing rewards.
Stake allocation mechanism.
Validators need to select and allocate their stake, including their delegator’s stake, to subgraphs. Their stake is not considered active and will not receive any rewards unless they are allocated.
A subgraph with high signals from curators will receive a bigger portion of the new issuance rewards. The rewards for a subgraph are shared with all allocated stake to that subgraph. Therefore, validators are incentivized to select subgraphs with high signals and low allocated stake.
The protocol will automatically close allocations after 28 epochs. Validators can choose to close their allocations to subgraphs earlier. They must provide a proof of indexing (POI) when closing in order to receive rewards.
Rewards
Rewards are distributed only once a validator closes an allocation with a POI.
Rewards come from newly issued tokens and query fees.
Inflation rate applied to total token supply. The protocol issues 3% of total token supply as indexing rewards distributed to stakers.
Query fees. Users of subgraphs need to pay a query fee. Of the collected query fees, 1% is burned, 10% is distributed to curators, and the remaining 89% is distributed to stakers (indexers and delegators).
Factors that impact realized rewards.
Validator allocation duty. A validator needs to allocate all of their stake to subgraphs, including any new stake from delegators. Unallocated stake will not receive any rewards.
Subgraph saturation. Rewards for a single subgraph are shared with all allocated stake to that subgraph. Therefore, if too much stake becomes concentrated to a subgraph, that could lead to suboptimal rewards for stakers.
Indexing reward cut and query fee cut. Validators have separate commission fees charged on the inflationary rewards and the collected query fees. Please see the validators section for more details.
Risk
Slashing. If a validator incorrectly indexes or incorrectly services data, they will lose all rewards for that epoch and will have its own stake deducted by 2.5%. Delegators’ stake is not affected.
The protocol requires validators to actively participate in the protocol in order to receive staking rewards. Any validator failing at performing its duties will lead to less or no rewards for its stakers.
A validator needs to actively allocate its stake to subgraphs in order to receive rewards.
A validator needs to submit a POI when closing allocations in order to receive rewards.
Validators
Total validator cap | ❌ | |
Validator requirements | ✅ | 100,000 GRT |
Validators have two separate commissions.
Indexing reward cut is the portion validators take from inflationary rewards. For example, if a validator has an indexing reward cut of 20% and it received 1,000 GRT in staking rewards for an epoch, the validator will take 200 GRT and 800 GRT will be distributed to its delegators.
Query fee cut is what validators take from collected query fees. For example, if a validator has an query fee cut of 20% and it received 100 GRT in query fees for an epoch, the validator will take 20 GRT and 80 GRT will be distributed to its delegators.
Before comparing the commissions across validators, stakers need to take a validator’s own stake into account. For example, let’s assume Alice and Bob are validators with 1M stake and a 20% indexing reward cut. They both earn 1,000 GRT in staking rewards from a recently closed allocation. However, Alice’s self-bond is 500,000 and Bob’s self-bond is 100,000. Even though Alice and Bob both have the same reward cut of 20%, Alice’s delegators will earn a higher reward rate (800 GRT shared with 500,000 delegators’ stake) than Bob’s delegators (800 GRT shared with 900,000 delegators’ stake).
Validator saturation. A validator can have up to 17 times their self-bond amount as stake. For example, if a validator stakes 1,000,000 GRT, it can take on 16,000,000 GRT from other stakers. Any additional stake will not earn additional rewards.
Resources
The Graph documentation: https://thegraph.com/docs/en/
Community knowledge base: https://thegraph.academy/
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