The Graph is a project that has the potential to greatly change and improve the entire blockchain space as it seeks to directly improve the practical functionality of smart contracts. It promises real utility and use-case but this can sometimes seem to like the ‘hype’ element that so often drives cryptocurrencies to a pump.
After having initially pumped back in early 2021, The Graph has now somewhat calmed down. In fact, The Graph now sits just above the $0.50 mark whereas in 2021 it was hitting over the $2 mark. These two compounding factors make it a token to watch, but also a token to research diligently.
This article will tell you everything you need to know about this protocol, where you can buy it, how you can buy it, and advise if now is the time to buy-in.
Best Way to Invest in The Graph in 2023
As The Graph is a lesser-known and less popular token than some others, it can be difficult to find a place to make your purchase and trades.
eToro is one of the most respected and used brokerages on the market and they support GRT. Brokerages are sometimes an expensive option when compared to exchanges, but they are notoriously simple to use for new traders. For example, you will not need to link a wallet to your account. It is worth noting that you may not be able to buy GRT outright - instead, you may have to purchase a CFD.
CFDs are a contract you agree to when you complete your purchase. They pay you rewards if the asset price rises or you incur losses if it goes down. You do not own or hold the asset with derivatives.
What Is The Graph - Quick Overview
Name and ticker The Graph (GRT)
Date launched December, 2020
Circulating supply | max supply: 4,720,000,000 | Uncapped
Blockchain network Ethereum Blockchain (ERC20)
Creators Yaniv Tal, Jannis Pohlmann, Brandon Ramirez
Use-cases Decentralized oracle, application programming interface, blockchain connector, data tool, web3
What is The Graph - Explained
History
The Graph is made up of three core founders: an electrical engineer (Yaniv Tal), a computer scientist (Jannis Pohlmann), and a roboticist (Brandon Ramirez). Initially, they worked on solving problems for developers of new apps in the start-up space. However, having then discovered Ethereum, and the benefits of a decentralized network compared with a traditional centralized database, they began developing apps on-chain.
On-chain development quickly developed its own problem - sorting through the raw data on the Ethereum blockchain was an extremely difficult process that ultimately meant it took more time and energy to complete the process, and also it delivered a slow and laggy end product.
It is widely understood in the crypto space that this is one of the core issues with Ethereum, making things hard for developers and costly for users. This is where the conception of The Graph is born.
The Purpose
The Graph is an extremely interesting tool that looks to directly solve some of the compatibility issues that blockchain technology has with data. It is an indexing protocol that seeks to specifically facilitate the way in which blockchains can process and store data to enable higher levels of functionality for tools such as smart contracts.
Smart contracts are one of the most interesting and practical tools to come out of the crypto space. Not only can they help to create dApps, but they also offer both a cheaper and more convenient way of executing a contract/agreement. Not only this, but they also have the prospect of revolutionizing the way business is conducted off-chain. Not only is their use-case based around automation, but they also hold great value potential in affirming trust to two parties conducting an agreement.
The key problem with smart contracts as of right now is their inability to react to on-chain data, which means developers have to manually input this, which is neither cheap nor convenient. The much-needed data index layer needed to facilitate and modernize this current problem is exactly what The Graph looks to provide.
Market History
The Graph token launched in December of 2020 at a price of $0.28; by February it had pumped tremendously and hit its highest point to date of $2.28. Since this high GRT has begun a slow decline and plateaued to its current price of around $0.65. It's not exactly clear why this project hasn’t managed to sustain its highs of $2+, but some analysts believe there simply is not enough hype around this project to gain the sort of momentum required for crypto projects to pump.
There is clearly space for GRT to grow; it sits as the 54th largest token on the market with a market capitalization of $2,457,836,216. However, some argue the real market cap is actually higher when combined with the number of tokens currently locked.
This links to the second criticism of GRT - its tokenomics. Many are concerned that there is a great deal of selling pressure built up from initial investors that hold anywhere from 20-100x unrealised gains in the locked tokens. This creates FUD within the community due to the fear of a large sell-off. Also, if the market cap is then drastically increased due to the token unlock, a high amount of gains to be made in the future becomes more difficult and less likely.
Use-Cases
The primary use-case of The Graph is an index for data on the Ethereum blockchain. It acts as an application programming interface for the network that essentially can analyze and sort its data - the same way the index of a book maps out its contents.
Moving onward from this, The Graph is currently in the beta stage on a host of other blockchains, but we will have to wait to see how this develops.
Cross Compatibility
As already mentioned, The Graph was primarily designed to run queries on the Ethereum blockchain. Latest platform developments have seen beta versions of The Graph now running on a range of other popular blockchains, which also will bring a large volume of queries for the network to run. More queries mean more functionality and a more investable product. Some of the latest platforms now running a beta version are:
Solana
Polygon
Fantom
How to Buy The Graph
To buy any token you will need an interface. There are a host of different options for you, but most will require you to verify your identity and create an account with some sort of platform. Here we have laid out your options.
You can buy GRT using any of the following platforms:
Brokerage:
GRT is available on a very limited range of brokerages, but this does include eToro.
Exchange:
Most exchanges will list GRT because they offer a good range of variety and it is a fairly large token by market cap; exchanges provide slightly lower fees than most brokerages but can be more complicated.
Decentralized Exchange (DEX):
These operate in the same way as a traditional exchange, but are unregulated and are not owned/operated by a singular entity. DEXs usually have a great range of coins for users to choose from as they are a key part of the blockchain metaverse and have almost no restrictions.
P2P:
Person-to-person exchanges offer great rates due to the lack of a middle man; it's best to think of this as swapping rather than trading.
How to Sell The Graph
You can sell your GRT using any of the methods we have shown above under How To Buy The Graph. Again, most platforms will require you to verify your identity and create an account; additionally, you will need to own the token directly or via a derivative.
With some platforms, like an exchange, you are able to transfer any holding of GRT you may already have to that platform and then sell it there. Whereas with something like eToro you will first need to buy GRT on the platform, and then also sell it there.
We advise that you first check the fees you may incur when transferring crypto assets from platform to platform as it can be quite costly.
Alternative Ways to Invest in The Graph
There are multiple ways to invest in cryptocurrency. As well as the traditional method of buying coins/tokens you could buy a derivative product like a CFD (contract for difference) or an EFT (exchange-traded fund).
You can use brokerages to buy GRT CFDs. CFDs are a contract you agree to when you complete your purchase. They pay you rewards if the asset price rises or you incur losses if it goes down. You do not own or hold the asset with derivatives.
GRT is not currently available to buy in any of the following ways:
EFTs
Index Funds
Mutual Funds
Trusts
Is It Safe to Invest in The Graph Right Now?
The same especially applies to CFDs; 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
GRT is undoubtedly a risky play and the attractiveness of this investment is split between two sides. On the one hand, it offers great functionality and a practical use case. This can’t be said for many of the popular coins/tokens you see on today’s market. However, on the other hand, it lacks robust and investible tokenomics. With such a big number of locked tokens representing such a large pool of unrealised gains, it seems hard to see how those holders will not eventually sell when they can. This has the potential to crash the price and kill momentum for The Graph.
While the current market cap sits at around $2 billion it, in fact, could be much, much higher than this when the locked tokens are inevitably released. But with a token with such utility and promise, it wouldn’t be outrageous to add some to your portfolio for a long-term play.
