The Graph’s Proposal to Increase Indexing Reward on L2

On April 23rd, the decentralized indexing protocol The Graph community proposed a proposal to gradually increase the indexing reward of 5% on L2 to 100%, and proposed a timetable and implementation process, from 5% to 25% (expected for the week of May 8, 2023), then to 50% (expected for the week of May 22), 95% (expected for the week of July 24), and finally to 100% (expected for the week of August 28). The Graph states that it is expanding to L2 to achieve faster transactions, significantly reduce gas costs, and participate more openly in the network. Transferring indexing rewards from Ethereum to Arbitrum will enable more indexer to run on L2, and also provide more rewards for curators and clients.

The Graph community proposes to gradually increase the 5% index reward on L2 to 100%

The Graph, a decentralized indexing protocol, recently proposed a gradual increase of the indexing reward on L2, from 5% to 100%. This move aims to benefit the community by enabling faster transactions, reducing gas costs, and promoting greater decentralization of the network. In this article, we will explore in more detail The Graph’s proposal, timetable, and implementation process.

What is The Graph?

Before diving into The Graph’s proposal, it’s important to understand what The Graph is and what it does. Simply put, The Graph is a decentralized indexing protocol that allows developers to query data from blockchain networks. With The Graph, developers can build and run decentralized applications (dApps) more efficiently by indexing the blockchain data they need to operate, and making it easily accessible via an API. The Graph is built on Ethereum and is currently one of the largest subgraphs deployed, with over 10,000 subgraphs created so far.

The Proposal

On April 23rd, The Graph community proposed the gradual increase of the indexing reward on L2, starting from 5% and ending with 100%. The proposal aims to encourage more indexers to participate on L2, thus expanding its capabilities and improving overall efficiency. By gradually increasing the indexing reward, The Graph also hopes to promote greater decentralization.
The Graph intends to transfer the indexing rewards from Ethereum to Arbitrum, which will allow more indexers to run on L2. It will also provide more rewards for curators and clients, who are critical components of the network. The gradual increase is expected to take place over several weeks, with the first increase from 5% to 25% expected to happen during the week of May 8, 2023. The next increase to 50% is expected during the week of May 22, followed by a jump to 95% during the week of July 24. Finally, the indexing reward will reach 100% during the week of August 28.

Benefits of the Proposal

The proposal has several benefits for developers and the community at large. First and foremost, it will enable faster transactions by reducing gas costs. Running on L2 will allow developers to access greater bandwidth and lower fees, thus improving the efficiency of their dApps. Moreover, this move will also promote greater decentralization of the network, which is essential for building a robust and secure blockchain ecosystem. By expanding to L2, The Graph aims to lower the barriers of entry for developers and promote greater community involvement.

Implementation Process

The implementation process of The Graph’s proposal will take place over several weeks, beginning with the first increase on May 8, 2023. The community will be closely involved in the process, with regular updates provided on the status of the implementation, as well as any changes or adjustments to the timetable. The Graph is committed to making this process as smooth and efficient as possible, while also ensuring that the benefits of the proposal are realized as quickly as possible.

Conclusion

The Graph’s proposal to increase the indexing reward on L2 is an exciting development for the blockchain community. It will enable faster transactions, reduce gas costs, and promote greater decentralization of the network. The timetable and implementation process outlined by The Graph are well thought out and demonstrate their commitment to the community. By expanding to L2, The Graph hopes to create a more open and accessible network for developers and users alike.

FAQs

1. What is L2 and how does it benefit The Graph?
L2 refers to Layer 2 solutions that are built on top of Layer 1 (i.e., Ethereum). L2 solutions are designed to improve the efficiency of the network by reducing gas costs and improving transaction times. By expanding to L2, The Graph hopes to reduce the barriers of entry for developers and promote greater community involvement.
2. How will the gradual increase of the indexing reward promote decentralization?
By gradually increasing the indexing reward, The Graph hopes to attract more indexers to participate on L2. This will increase the number of nodes on the network, which will in turn promote greater decentralization.
3. What is the role of curators and clients in The Graph’s proposal?
Curators are responsible for selecting the subgraphs that will be indexed by The Graph, while clients are the consumers of the indexed data. By providing more rewards for curators and clients, The Graph hopes to incentivize greater participation on the network, which will ultimately benefit the entire community.