Edge & Node, A New Software Development Company Is Launched By The Graph Core Protocol Team


The creator of Bitcoin, Satoshi Nakamoto, in the seminal paper, mentioned two ideas making it easy for a user to get at transactions they are interested in. In section 7 of the paper, a way to prune data was discussed. In section 8, Simplified Payment Verification lays out how specific payments can be verified without running a full network node. Storing just the headers of the longest chain and the Merkle branch of the transaction is enough to verify the transaction. These techniques of running nodes limits the view to shards of data that the user is interested in. These sections were presented in the original paper because the creator of Bitcoin knew how difficult it would be to look for specific transactions in the soon to be sprawling and constantly growing Bitcoin blockchain data.

Blockchain storage is usually optimized for adding a new block to the end of the chain and to be easily distributed to new nodes. Data is not stored as in a conventional database, with facilities for efficient searching, filtering and grouping. This design which started from Bitcoin continued on the Ethereum and in other blockchains by necessity, the data store structures that they use can be barely called databases, in fact they are not databases. In databases, structures known as indexes make searching efficient, these indexes are part of the primary conception of any database design. Indexes come with extra cost that slow down writes to the data store.

The Graph protocol provided the answer to making the building and running of queries to get at the data more efficient and decentralized. The availability of The Graph protocol made the rapid development and deployment of DeFi (Decentralized Finance), exploding to a value of billion in 2020 alone. An incentive system was built on top of The Graph with the GRT token and released into the Ethereum Mainnet in December. Such an incentive system allows for many virtuous effects: the payment of people for their efforts, the resistance to malicious participants, including Sybil resistance. The governance of the network has been turned over to an independent network, The Graph Foundation. A new software and services company, Edge & Node is emerging from stealth mode, established to continue developing the protocol. I spoke to Yaniv Tal, their CEO & Tegan Kline, their head of business about the new company and their vision for it. Before getting to that part, the technical and crypto-economic underpinnings are explored.


To overcome the inefficiency of reading from blockchain storage, data from a public blockchain could be read into a real database, indexed and stored to allow for complex searches and queries on the data. This is what powers companies like Chainalysis. Users are willing to pay for these bespoke indexes and analytics on the data. These are centralized and proprietary solutions running on top of decentralized protocols.

Ethereum, the world computer, whose main feature: the scope, flexibility and capability of smart contracts, led to the explosion of tokens and of DeFi. Ethereum suffers from the same limitations mentioned before, the difficulty in reading and making sense of data. Ethereum smart contracts however, do allow for events to be emitted at key points in the execution of the contract. These events can be observed from outside Ethereum using an Application Program Interface (API). Once a specific event is detected, data from the event can be collected and stored in a database and indexed for ease of querying. This data tied to a smart contract is a shard of the original data and a view applicable only to the dApp or decentralized app running on the specific smart contract. Ethereum whose explosion of data due to the number of smart contracts housed inside it, needs such a solution targeted to a specific dApp.


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Facebook developed a language to manage the API centric view published on the web by companies. This is called GraphQL, in homage to SQL or Structured Query Language. GraphQL was released into open source. The main idea behind GraphQL was to develop a language to describe the data and provide a means to ask for only what the user wants on top of web APIs. This cuts down on the data clogging up the pipes of the internet and provides a concise and complete answer catering to the user’s needs. GraphQL also protects the query from breaking due to the vicissitudes of API upgrades. GraphQL needs a server to post-process the data and create user centric views and structures to serve up focused data items.


The latest avatar of the web, namely Web3, is focused on decentralization, this not only means that the dApps themselves are decentralized, but even applications, like a efficient query layer provided on top can be decentralized, by creating a community of servicers who participate in their own token economy to run a resilient utility layer. The creation of such an ecosystem is the story of The Graph protocol.

It was only natural that GraphQL would be adopted to the challenge of querying Ethereum data. This resulted in The Graph. An indexing protocol for Ethereum, and then IPFS (decentralized file storage). Ethereum with its fervent and multitudinous following of developers and traders and its rich ecosystem of tokens based on ERC-20 and all the DeFi solution, is the natural target. The Ethereum ecosystem also brings with it a huge engaged and committed developer and user base, now flush with funds from the ICO and DeFi booms.


The Graph went further, the developers created a way for anyone to become an indexer by creating a manifest for the events to be listened to, then automatically generating a data-store and a GraphQL based query mechanism from the subset of transactions according to the manifest. These are called subgraphs.

The Graph and its evolution brings to focus what can be truly called dSaaS, decentralized Software as a Service. There are other well known protocols that embody this ethos already, like Chainlink, the open source Oracle. Chainlink brings trusted data from the outside world into the blockchain, also centered on Ethereum. The Graph brings data from the blockchain to the outside world. A natural evolution of such a decentralized protocol with its mixture of technology and incentive driven crypto-economics is to establish a governance structure, which is happening with The Graph Foundation. The main developers are starting their own software company to support the protocol called Edge & Node.

Subgraphs Make DeFi Possible

What The Graph has built is an engine to create subgraphs and an ecosystem to power it. Subgraphs are the main mechanism for participating in The Graph ecosystem. Anyone can create a subgraph and run as an indexer. However, the indexer needs to stake tokens to prevent malicious actions. This incentive ecosystem was launched on the Ethereum mainnet last month, with a token called GRT which powers the incentive and governance schemes. Subgraphs in The Graph directory number 2811. Many of the well known DeFi protocols use their own subgraphs, they include Uniswap, Synthetix, Aragon, Gnosis, Balancer, Livepeer, DAOstack, AAVE among others.

The effort of setting up a dApp is eased considerably when the effects of the protocol itself can be made transparent during development using subgraphs on the testnets. Instead of struggling to setup infrastructure to look at the data hidden in the Ethereum blockchain, a simple configuration file defining their subgraph and a server could expose specific DeFi data to their creators and subsequently adopted to the users of that specific DeFi. This is the strength of The Graph protocol, the DeFi ecosystem on Ethereum grew from around a billion dollars to about 24 billion dollars in 2020. In no small part due to the leverage afforded by The Graph and Chainlink protocols and the developers and participants in those ecosystems. These communities are powered by tokens, no longer do engineers have to convince business people and venture capitalists to fund them.

Edge & Node

The creation of Edge & Node, a new software development company founded by the core protocol team behind The Graph, will be announced today. The Graph Foundation carved out of The Graph and funded by tokens will run the governance piece. Edge & Node has a 2-year service agreement with The Graph Foundation. Edge & Node will help maintain the core protocol and build new tools and applications.

I interviewed the CEO of Edge & Node, Yaniv Tal and the Head of Business, Tegan Kline. I summarize some of the main ideas below.

Yaniv Tal waxed eloquent on the possibilities for Web3 to redefine the nature of work as a network of decentralized teams working to create value on dSaaS which will transform the economic landscape of centralized monolithic corporations to a more democratic world. Compute has been steadily moving from main frames to client server to the edges, closer to the end user. The shared vision of blockchains helped transform proprietary solutions to open APIs. Tal considers Edge & Node an important contributor to this vision by building applications and managing services in the new paradigm.

Tegan Kline emphasized the thesis that DeFi could not have been possible without The Graph protocol. The Graph protocol has grown to 10 billion queries a day with 141 indexers, 1.5 billion GRT has been staked so far and GRT is the 8th most popular token on Coinbase.

On the question of whether The Graph can become active in the field of Enterprise blockchains, Tal re-iterated his commitment to the public decentralized world; enterprise blockchains are considered more centralized, even though many production level consortia run private Ethereum. There are many problems yet to be solved in the public blockchain world. Edge & Node will concentrate on this world.

The latest Forbes Blockchain 50 lists 22 Ethereum projects and 9 Quorum projects which can probably use The Graph without too much trouble. A bespoke server against nodes in each of these networks would be needed, but it is certainly possible since The Graph protocol is open source.

The Future

We briefly discussed the movement that is afoot to regulate the decentralized space. Proportional regulation, where like activities need to be regulated similarly, will attract regulation on the DeFi activities with finance like characteristics. A query language to watch and monitor the public blockchains will be part of an ambient system to flag activities that are considered fraud or those that support terrorism. Open public blockchains already permit free access to reads of data; The Graph based code can quickly surface certain transactions if appropriate regulation subgraphs are built and run. Many DeFi solutions may be required to do so. This is one function where DeFi and CeFi (Centralized Finance) will converge.

The last point was the possibility of reading multiple blockchain protocols through The Graph protocol. Since the future could be many chains operating together, also called an omni-chain world, possibly a hybrid omni-chain world with public and private blockchains, such a decentralized utility will be crucial in creating interoperability of assets and protocols. Trading between chains will be powered by dSaaS, some more decentralized than others.

The setup of incentive schemes and the release of tokens through a rigid standard like ERC-20 has started to cause distortions in the DeFi marketplace similar to that found in traditional markets. DeFi is starting to look more like CeFi. A group of early adopters and builders corner the vast majority of utility tokens, giving them an outsize vote in the ecosystem. The meteoric rise in value of tokens also attract speculators who could care less about the utility protocol. There could be different ways of dealing with this distortion of a utility token. One would be the adoption of quadratic voting or funding schemes, or dropping in value of tokens that are not being used in the ecosystem. Another way is to release multiple tokens through ERC-1155 or ERC-1400 or to create a new EIP to handle such possibilities. All these are food for thought for future columns. Now, we celebrate the arrival of a new entrant into the dSaaS environment, Edge & Node.


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