Is It Worth Investing In The Graph (GRT)?

Last Updated February 3rd 2022

16 Min Read

Information storage and sharing is becoming increasingly crucial as the world becomes more connected. Data is the backbone of any decision in the modern world, and for this reason, data storage and management is becoming extremely valuable.

The blockchain space is taking data sharing even more seriously. With its ability to decentralize data, many projects are emerging to take advantage of this feature. The most recent example is The Graph (GRT), an open-source protocol for blockchain data retrieval.

The problem with current blockchain projects is that they do not offer a platform where developers and users can share information easily. There is no medium through which information can be easily accessed and used by all the projects within the blockchain space.

The Graph aims to solve this issue. In this guide, we will look at what exactly The Graph is, how it works and whether it is a good investment.

Contents:

What Is The Graph?
How Does The Graph Work?
What Is GRT?
The Graph Price History
The Graph Price Prediction In 2022 And 2023
How To Invest In The Graph (GRT)
Is The Graph (GRT) A Good Investment?
Conclusion: So, Should I Buy GRT?

What Is The Graph?

The Graph is a decentralized network that allows developers to build their own APIs for retrieving blockchain data. The main idea behind the project is to give developers access to real-time data from several blockchain applications.

This means they can easily create dApps and smart contracts based on the information stored by the protocol regardless of which other blockchain or platform they come from.

In simple terms, The Graph acts as a bridge between all the different projects within the blockchain for information retrieval.

The Graph provides developers with access to various data sources in one place without having to use several blockchains. This data is usually retrieved from decentralized data storage like Filecoin, IPFS and Ethereum.

As a result, certain tasks can be completed in a more timely manner which in turn saves resources and money.

The Graph was originally built on the Ethereum blockchain in 2018 and has not created a mainnet yet. It was created by three tech enthusiasts who have developed several other projects together (Mostly developer tools). These are Yaniv Tal, Brandon Ramirez and Jannis Pohlmann.

Several blockchain projects are already using The Graph to retrieve and use important data. These include Ethereum dApps like Aave, Decentraland, Uniswap, Curve and DAOstack.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How Does The Graph Work?

First of all, The Graph's algorithm gathers and analyzes blockchain data. If it finds the data relevant, it stores it in different indices known as Subgraphs. Other blockchain applications can then send a query (such as the current price of Bitcoin) and receive a response immediately.

The Graph works pretty much the same as Google, where you type in a query into the search engine and get the information you are looking for immediately.

In order to pose queries to the Graph Protocol, dApps use a programming language known as GraphQL, which acts as a bridge between the data to be retrieved and the application that needs to retrieve that data.

In order to retrieve information from The Graph, developers can create their own Subgraph, which contains APIs (Application Programming Interfaces). APIs are a set of protocols and routines that help software applications interact with each other.

Subgraphs can be created by developers who pay a fee to The Graph in GRT tokens. If the data stored within the Subgraph is relevant, then they receive a share of the GRT made from transaction fees on that subgraph.

Basically, The Graph network is made of four categories of user nodes:

Indexers: These are the nodes in the network that operate to store, process and disseminate data. These nodes can be operated by anyone willing to stake their tokens for the maintenance of the network.
Curators: These are users who make decisions on what information should be included in The Graph protocol. They use an incentive system to reward the indexers. Curators are required to hold a minimum amount of GRT tokens in their wallets for verification purposes.
Delegators: These are users who elect to allow others to operate their indexer node on their behalf. They receive a portion of the rewards that come from the indexer's activity.
Consumers: These are the end-users, mostly applications and web services, who pay indexers in order to retrieve and use data from The Graph protocol.

What Is GRT?

GRT is the native token of The Graph. It is an ERC-20 compatible token based on the Ethereum blockchain. Unlike most tokens that don't have any real value, GRT plays a very critical role in the operation of The Graph. In fact, GRT is the only crypto asset that is used for critical operations on a blockchain network.

Its primary role is to ensure that smart contracts that rely on The Graph protocol are executed successfully.

Here are some of its other functions:

Used by consumers to pay query fees to indexers
Paid to curators as incentives for signaling subgraphs to be included in the protocol
Rewarded to indexers for their services
Paid to delegators for lending their GRT

Owning and staking GRT tokens also gives you the power to vote on proposals and participate in making important decisions that affect the protocol. If you are a delegator, you can assign your voting rights to someone else.

According to CoinMarketCap, there is currently a total supply of 10,000,000,000 GRT with4 .72B GRT of those in circulation. The maximum supply is capped at 10,057,044,431 GRT.

The total supply is increased by 3% annually, while the circulating supply is reduced by 1% every year.

The Graph Price History

Although The Graph was founded back in 2018, it started trading actively towards the end of 2020, where it was going for as low as $0.14. It, however, didn’t take long for the price to start shooting, and by December 20th 2020, it had surpassed $0.7.

This was after gaining almost 400% in just three days. After this price surge, there was a slight correction that brought the price back to around $0.3 during the first few days of January 2021,

As you probably already know by now, there was a market-wide bull run that started in early 2021 and ended around May. GRT is one of the coins that quickly took advantage of this market momentum and shot up.

It started with a small jump to about $0.60 in mid-January, then the real rally began at the start of February.

From February 1st to 12th, 2021, GRT rose from $0.78 to a whopping $2.88, its current all-time high. That is a staggering 270% gain in less than two weeks.

But as is expected with any major price increase, a steady crash soon followed. GRT struggled to stay above $2 per coin and managed to do so until February 22nd.

From there, there were wild fluctuations, with the price bouncing between $1.2 and $2.2 until somewhere in late April. From April 25th, The Graph couldn’t manage to go back to above $2, and its downtrend to below $1 began.

GRT kicked off May 2021 at around $1.7 and then gradually dropped to around $0.6 by May 23rd. The coin encountered a lot of resistance around this time. The market-wide bull run that began in early 2021 was signing out, and most investors were rushing to sell their stash.

For the rest of June, GRT traded between $0.4 and $0.9 with little activity in between. The same happened in July, and then in August, the coin began picking up momentum again and then on August 20th, it managed to surpass $1 again.

However, the recovery was short-lived, and by the end of August, GRT was back to $0.88. It again went back to above $1 at the start of September, but by the end of that month, it had dipped to $0.6.

The coin remained below $0.7 until mid-October, when it recovered and went to $0.9. The uptrend continued, and by October 26th, 2021, GRT was trading at $1.2.

Although The Graph dropped again, it fluctuated between $0.9 and $1.2 for the first few days of November. Since December's market downturn, GRT price has also declined.

At the time of writing, The Graph was trading at $0.40 per coin with a market cap of $1.9 billion and a fully diluted market cap of $4 billion.

Check Out: What Might Happen If You Invest $100 In The Graph (GRT) Today?

The Graph Price Prediction In 2022 And 2023

There are a lot of mixed signals concerning the growth of GRT in 2022 and 2023. We have looked at what several price analysts have to say about the future of this coin in the next two years.

As usual, the aspect of volatility comes out very strongly, judging by how different the predictions are. Some experts believe that GRT might rebound in 2022/2023 and hopefully trade above its all-time high at some point. There are also those who believe that the coin might struggle during this period.

According to Wallet Investor, the rally to $2 and $3 will be challenging, with the coin mostly bouncing between $0.1 and $0.9 for the rest of 2022. For some reason, Wallet Investor believes GRT will record more downtrends with very little growth.

In fact, the coin might start dropping from the start of the year, where it will be trading at around $0.93 and close the year at $0.12. This is obviously a bit discouraging if you are looking to invest in The Graph for the long term.

Gov.capital seems to align with the same downtrend trajectory as Wallet Investor. In fact, the numbers are even lower. The site predicts that GRT will reach $0.15 by mid-May 2022 and this is where its predictions end.

We can’t tell why these two price analysts think GRT will drop in 2022. We can’t also say that they are right or wrong. This is because some other price trackers are hopeful that this digital asset might rise in 2022.

For instance, Coin Price Forecast predicts that GRT might trade at around $0.55 in mid-2022, then close, then at close to $0.60. This is not exactly encouraging, keeping in mind that it is still more than $1 lower than the ATH. However, it is a good indication that the token might record some positive growth in 2022.

Priceprediction.net agrees with this as it predicts that GRT will end 2022 at an average price of $1.51 or as high as $1.83. Our most optimistic prediction comes from Long Forecast, which happens to be the only site that believes GRT will cross $2 in 2022.

According to Long Forecast, GRT will drop throughout 2022 and end the year with a price of $0.14.

In 2023, Long Forecast predicts that GRT will go as high as $0.29.

Wallet Investor is still very bearish about 2023 and predicts a drastic drop. According to the site, GRT will start off 2023 at around $0.114 then increase only slightly to $0.151 by the end of the year. Speaking for most long-term investors, we do hope this will not be the case when 2023 comes around.

According to Coin Price Forecast, Long Forecast might be right about GRT trading above $0.7 for the most part of 2023. It predicts that the coin will close the year at $0.89 but might not cross $1 until 2024.

Honestly, we believe that the most bullish of these predictions are conservative in reality. The Graph has a powerful technology that deserves some decent growth in the next few years. We are positive that if the team behind the project fulfils its promises and The Graph gets enough adoption, we might see a figure of more than $2 sometime in 2022 and hopefully more than $5 in 2023.

Don't Miss: The Graph Price Predictions

How To Invest In The Graph (GRT)

If you believe that The Graph cab be profitable and want to invest in it, there are several ways you can do so. These are:

Buying and holding
Trading
Staking
Being an Indexer or Curator Node

Method 1: Buy and HODL

If you are new to investing in cryptocurrencies and want a straightforward strategy that does not involve a lot of technicalities, this is the best approach. Just buy GRT tokens and hold them in your wallet until you can sell them at a higher price than what you paid for.

The only problem with this strategy is that it requires patience because there are no metrics based on which to predict how much profit you will make.

In order to HODL, you will need to buy it then send it to an off-exchange wallet. Currently, you can buy GRT from several exchanges, including Coinbase, Etoro, Binance, BitPanda and Uphold.

Since GRT is an ERC-20 token, you can use MyEtherWallet or any other ERC-20 compatible wallet to store it.

We usually recommend using hardware wallets since they are the most secure. Trezor T is a good option for security-conscious users, while Ledger Nano S is a better choice if you value convenience.

Method 2: Trading

If you are more interested in the price movement of cryptocurrencies than their long-term potential, then this is one of your best options. Trading is all about buying and selling cryptocurrencies at the right time to take advantage of market hype and avoid losses.

You can choose from a number of online cryptocurrency exchanges that allow you to trade GRT tokens for other crypto assets or fiat currencies. There are also OTC markets where you can make deals with other traders directly.

In order to succeed in trading, you need to pay attention to fundamental and technical analysis. Fundamental analysis tells you how project fundamentals affect prices, while technical analysis is all about using past data to predict price movement.

For fundamental analysis, tools like CoinMarketBook can give you insight into GRT's market cap, daily trading volume, circulating supply and various social media statistics.

We recommend trading GRT on eToro. You get a ton of tools and can execute your trade in a few clicks.

All you have to do is;

Head over to eToro.com
Create an account if you don't already have one
Deposit a minimum of $200 into your account
Search for GRT
From the search results, click on the "TRADE" button just next to GRT
On the next page, click on "Trade" again
Enter the amount you want to spend on GRT
Click on "Open Trade"

Method 3: Staking

If you want to invest in The Graph and earn some tokens without having to buy them, then staking is the best choice. It's like mining, but instead of spending a lot of money on hardware and electricity, you lock up your GRT tokens in a wallet and wait for your share of rewards.

You can stake GRT in any ERC-20 compatible wallet using the official staking DAPP. The best way to stake your GRT tokens is by becoming a Delegator. This way, you can delegate your tokens to an active indexer then earn a portion of the profits they make.

Staking your tokens is better than holding them because you get a continuous stream of GRT tokens whenever your indexer earns them. The downside is that if the ROI of the indexer goes down, then so does yours.

Method 4: Become an Indexer or Curator

You can also make money on The Graph by either becoming an indexer or a curator.

In order to be an indexer node, you will need to stake a minimum of 100K GRT. After being approved, you will be able to earn income in two ways:

From Query fee rebates: These are payments you receive for serving queries on The Graph network
From indexing rewards: Incentives you receive for indexing subgraph deployments for GRT. The indexing rewards come from the 3% annual protocol-wide inflation then distributed to indexers based on their allocated stake on a particular subgraph.

As a curator, you will need to signal on high-quality subgraphs then receive 10% of all query fees generated by those subgraphs.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Is The Graph (GRT) A Good Investment?

The Graph has a lot of potential to grow and become a key player in the ever-growing decentralized data industry. The project team has a great track record and is committed to making this idea come to life.

In order for GRT tokens to have real value, The Graph needs strong adoption from both developers and users of decentralized applications built on top of the platform.

It's difficult to tell how GRT will perform in the short term, but long-term investments could increase your ROI by several folds.

According to Tim Frost, the founder of Yield App, The Graph's critical role in the DeFi ecosystem makes it a potentially valuable investment.

However, being a relatively new token, it will be quite difficult to assess its true value until there is some adoption. GRT is also a long way down from its all-time high price of $2.88.

Over the past few days, it has had trouble staying above $0.5 and doesn't seem to be in a hurry to get back to above $2 per coin. If you are going to invest in this coin, keep in mind that it is highly volatile and currently experiencing wild price swings.

So, while you can make some decent profits in the long term, GRT is not a guaranteed investment.

Check Out: Will The Graph Make Me Rich In 10 Years?

Conclusion: So, Should I Buy GRT?

If you are looking to invest in a blockchain project with real-world use cases, then investing in The Graph is definitely an option worth considering. There is currently no other cryptocurrency that offers the same services as GRT does. If it succeeds with its goal of becoming the information channel for blockchain projects, then the future looks bright for the token.

However, if you are looking to make quick profits without understanding how The Graph works, then we would advise against investing in this project. It's a relatively new cryptocurrency with no strong fundamentals or price history to predict how it will perform in the short term.

The only way to establish how well it will perform in the future is to wait and watch over a long period of time. But if you are looking for a high-risk, high-reward type of investment, then this might be just the right addition to your portfolio.