The Graph Launches Microtransaction System for Blockchain Data Providers

The Graph has introduced Scalar, a microtransaction system meant to enable new ways for the platform’s node operators and data providers to make money.

The Graph, which describes itself as “the indexing and query layer of the decentralized web,” functions as a link between decentralized applications (dapps) and different blockchains, providing a data querying platform that other blockchains and projects can use for their data requirements. The platform enables participants to package queries into “subgraphs,” custom feeds that provide application programming interface (API) data for use by blockchains and dapps.

The platform supports decentralized finance (DeFi) projects, including Uniswap, Synthetix and Aave, as well as major blockchains Polkadot, Solana, NEAR and CELO. The project also has its own native token, GRT.

Read more: Blockchain Data Indexer ‘The Graph’ to Support Polkadot, Solana, NEAR and Celo

“Using Scalar, node operators have a new way to monetize their infrastructure through query fees paid in GRT, and data providers can be paid directly for making useful data available for apps without paywalls and ads,” The Graph Foundation said in a statement, noting that the volume of transactions on the network created the need for a microtransactions infrastructure beyond existing options.

“The major jump in Web3 use cases” including DeFi and non-fungible tokens (NFTs) “has created unprecedented demand for a truly decentralized and scalable query processing system,” the foundation said.

Scaling transactions with state channels

Scalar was co-developed by The Graph Foundation and software developer Edge & Node with Connext, a peer-to-peer, cross-chain liquidity network specializing in microtransactions. Using state channels, where users can interact directly with one another more efficiently outside of the blockchain, Scalar aggregates and compresses transactions before they are finalized on-chain.

“Within The Graph ecosystem, we started looking at state channels a little over two years ago. And everyone said we were crazy,” Tegan Kline, co-founder and business lead at Edge & Node, told CoinDesk in an interview. “We kind of went against that, and we did a lot of research within the state channels space.”

“This is the first time state channels will be used in broad-scale production,” Kline added. “Scalar is this major new building block for infrastructure in the decentralized applications space. We’ll be using this within The Graph ecosystem to be able to handle the billions of queries that we’ve seen on The Graph’s hosted service, in The Graph’s decentralized network.”

In March, The Graph’s hosted service processed more than 600 million queries a day alone, totaling more than 19 billion queries, according to the platform.

Kline noted that the platform has seen “over 100x growth in the hosted service. In June of last year, we did 1 billion queries, which was a really big milestone.” The March queries figure “speaks to the explosive growth within Ethereum and the other blockchains that are supported on the hosted service,” she said.