Recent reports reveal that the Graph, a platform used to index and query blockchain data, is in the final stages of migration to Arbitrum, a popular Ethereum layer-2 protocol. Following this announcement, GRT, the indexer’s native token, is up 13% in four days, according to the candlestick arrangement on the daily chart.
Migrate the chart to arbitrage
The decision to migrate to Arbitrum follows a vote after a proposal was submitted to move the indexer to the layer-2 platform.
The Graph Improvement Proposal received majority support from the community, necessitating preparation for the eventual move to Arbitrum, a layer-2 platform that uses roll-ups. Like any other off-chain solution, Arbitrum enables high transaction throughput, increasing scalability.
With better transaction processing capacity, transaction costs are lower, enabling in-demand protocols to be launched while enjoying high levels of security as all transactions are rolled up and confirmed on the mainnet.
According to the development team, the goal is to improve scalability, increase transaction processing speed, and most importantly, reduce data indexing costs.
Tegan Kline, the CEO of one of The Graph’s development teams, Edge & Node, said the community chose Arbitrum for its speed and affordability:
Graph users have consistently sought solutions to improve gas efficiency and other aspects of the network. After careful evaluation of the available options, the ecosystem chose Arbitrum as the layer-2 scaling solution to provide speed and affordability to protocol developers and network participants.
Ask for cheaper
Although Ethereum has changed its fee bidding model following the implementation of the EIP-1559, transaction fees are still high, discouraging some users and protocols from using the mainnet.
In addition, as seen by the high network usage rate, the high demand for the mainnet means that users who want to transact on tier-1 have to pay a lot more to have their transactions approved.
On Arbitrum, The Graph holders will also be able to delegate GRT tokens cheaper. Delegated tokens are deployed at Indexers, which index and query data.
After this transition, Indexers will receive more GRT rewards as trades on Arbitrum are relatively cheaper. According to L2 Fees, a fee tracker, every Handover on Arbitrum costs $0.08, multiples cheaper than Ethereum, which costs $1.24.
It remains to be seen how The Graph will benefit from “data accessibility,” which Steven Goldfeder, the CEO of Offchain Labs, said Arbitrum provides.
However, what is clear is that The Graph offers a solution for users who want to query blockchain data more efficiently. Public blockchains like Ethereum or Bitcoin are designed to store data securely. However, they can make it challenging to reliably retrieve this data.
GRT is trading at $0.10, up 13% from this week’s June 14 lows.
Feature image from Canva, chart from TradingView
