FAQ for The Graph Delegators
The answers to the most common questions when you want to stake your GRT tokens in The Graph protocol
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[Last Update: 26-March-2023]
In this article we want to address the most frequently asked questions (FAQ) for Delegators within The Graph network. The Graph, dubbed “The Google of Blockchains”, is an indexing protocol that allows applications to easily retrieve data from all major blockchains, like Ethereum. If you want to read more about The Graph, you can check a detailed guide published by Finematics, here.
In brief, The Graph network provides indexing and search capabilities for the new web3 world. As you can imagine, this is a fundamental piece of technology, as we all use search features everyday. If it wasn’t possible to perform searches, it would be very complicated to find the data we need, quickly (e.g., think when you search with your smartphone for a specific contact in your address book).
If you are not yet familiar with web3, you can read our “Web3 for Dummies” guide which will introduce you to this new digital revolution.
Now, let’s start by answering some frequent questions that we’ve received in our Graphtronauts community.
1. What is GRT
The Graph has its own utility token that is used in the network, identified by the symbol GRT. You can buy GRT tokens on any major crypto exchange (e.g. Coinbase, Kraken, Binance, etc.) or in a decentralized exchange (e.g. Uniswap, SushiSwap, etc.). GRT tokens are used in the network for several purposes, but mainly so that applications can pay for queries. The Graph network is made up today of 400+ indexer nodes. Combined, they take on the complicated task of indexing all the available data in multiple blockchains. To better understand, take a look at what’s happening today in web2 with Google. Advertisers pay Google to show their ads so that they appear first in search results. In web3, applications use the Graph indexers to retrieve data from the blockchains, and in exchange for their work they pay them in GRT.
2. What is Crypto Staking
GRT is a utility token, meaning it serves a functional purpose within the ecosystem. If you simply hold GRT in your wallet, they do nothing and don’t help the network function. Thankfully, there is an easy option available to anyone which allows for your tokens to be put to work. On top of that, you can simultaneously earn passive interest and grow your initial investment of GRT. In the crypto/web3 world this is called staking.
What Is Staking in Crypto?
Staking is a way to put your crypto to work and earn rewards on it. If you’re a crypto investor, staking is a concept you’ll hear about often. But what is crypto staking? Staking cryptocurrencies is a process that involves committing your crypto assets to support a blockchain network and confirm transactions. Staking can be a great way to use your crypto to generate passive income, especially because some cryptocurrencies offer high interest rates for staking. — source: Motley Fool
3. Delegating or Staking?
In The Graph network, once you own GRT you can become a Delegator to earn passive interest in the form of an APY that can vary from 9% up to 15%. Basically, in The Graph ecosystem, delegating your GRT means staking your GRT to earn a passive interest. Instead of using the term “staking”, we use the term “delegating”. The term “staking” in The Graph ecosystem is reserved for indexer nodes that lockup GRT to run their operation. End users like you, “delegate” GRT tokens to indexer nodes.
4. How much GRT do I need to delegate?
You can use any amount you want, but we suggest starting with at least 1,000 GRT. Later, you can increase your delegation by adding more GRT on top of your current delegation.
5. How much does it cost to delegate?
Delegating GRT requires paying Ethereum Gas Fees. For this reason we suggest you look for ideal times to do so. Usually this will be during the weekends or early mornings (CET time zone), when ETH gas fees are under 10 gwei.
To check gas fees you can bookmark Etherscan Gas Tracker. In the picture below you can see an extremely low price where you will end up paying less than $1 to delegate.
You can also install apps on your smartphone. For Android you can install ETH Gas Price, while for iPhone you can install Ethereum Gas Fee. There are also browser extensions, like Ethereum Gas Price Extension, to keep track of fees. In the picture below you can see what the Ethereum Gas Price browser extension for Chrome/Brave browsers looks like.
6. What is an Indexer?
Indexers operate nodes in The Graph network and provide indexing and query processing services to customers (end users are dApps, that stands for decentralized applications).
By staking Graph Tokens (GRT), Indexers earn indexing rewards and query fees for their services. Additionally, Indexers earn from a Rebate Pool that is shared with all network contributors proportional to their work, following the Cobb-Douglas Production Function.
Indexers need to stake at least 100K GRT tokens to run a node and participate in the network as an Indexer. Aside from the technical knowledge to run a node, Indexers also have to be able to provide the technical infrastructure for doing so. If you want to know more about how to become an Indexer, you can start by checking The Graph Academy, and then go to the Indexer Hub, here.
7. How many Indexers can I delegate to?
It depends on the amount of GRT you have to invest. We suggest delegating to at least three indexers in order to diversify your investment. If you’re not satisfied with one of your indexers, you can undelegate and use your GRT for another indexer. However, note that once you undelegate your GRT tokens, you will have to wait for 28 days before you’re able to withdraw them and either re-delegate, or transfer them back to your wallet. The amount you’re undelegating will also no longer earn you rewards (during those 28 days). Here is where a major advantage to a diversified delegation becomes apparent. While you wait to gain access to your tokens, you will continue earning rewards from the other indexers that you are still delegated to. One example method could be splitting your GRT across three indexers, by delegating at least 10,000 GRT per indexer.
8. How do I choose an Indexer to delegate?
To choose an indexer you can use our informative Graphtronauts App. You can input the amount of GRT you want to delegate and sort indexers based on several parameters such as Rewards, Reviews, Rating, and more. You can also check reviews left by other delegators, so you can have an idea of what to expect from a specific indexer.
Using our app you can check both the Estimated and Historic rewards you’re projected to receive from your delegation(s). Estimated is calculated in real-time, while Historic is based on past closed allocations. In this example below, you can see that this Indexer is closing its allocation on average every 13-days. Keep in mind 28-days is the maximum an Indexer should keep an allocation open.
If you want to know more about how to choose an Indexer to delegate your GRT, you can read our article here:
9. How do I delegate my GRT?
Delegating your GRT is an easy process! You can use the wallet you are most comfortable with. To help you in your journey towards becoming a Delegator, we have published several guides, that you can find below:
- How to delegate with MetaMask Wallet
- How to delegate with Coinbase Wallet
- How to Delegate your GRT tokens with an Hardware Wallet
- How to delegate with Gnosis Safe MultiSig Wallet
10. When will I get my rewards?
You will get rewards every time an Indexer closes an allocation. An Indexer should keep its allocation(s) open a maximum of 28 days. Generally Indexers close allocations before this time limit, so you should see rewards accumulate multiple times a month. Using our free app you can also check in real time how much rewards you are accumulating so far (see Pending Rewards) in order to have a better picture of what to expect when your indexer will close its allocations.
11. Are rewards auto compounding?
Yes, all GRT rewards you receive are auto-compounding. This means that every time an Indexer closes an allocation, the rewards will add on top of your initial delegation, allowing you to gain interest on interest, automatically. If you want to know more about what is a compound interest, you can read an informative article here.
12. Do I need to claim my rewards?
No, you do not need to claim your rewards. Once you delegate your GRT tokens to an Indexer, you can simply leave your funds there and relax. Your Total Rewards are added automatically and become part of your Current Delegation (e.g. see the example below where the original delegation was 27,641 GRT and now it’s 28,642 GRT thanks to the additional 1,000 GRT earned from this delegation).
13. What is the Delegation Capacity?
One thing to keep an eye on is if an indexer is at capacity or over capacity. This doesn’t mean you should not delegate to this indexer but maybe reach out to them to see if they will be adding more self stake so their delegation capacity will increase (otherwise you won’t get all the expected rewards, but an indexer is always increasing its self stake when it’s approaching its full capacity in its delegation pool). Here are some examples below that are over capacity.
When choosing an indexer using our Graphtronauts App, you can filter by hiding over delegated Indexers:
In Graph Explorer over delegated indexers can be spotted by the Delegation Capacity:
14. What is a Subgraph?
Subgraphs are the ‘connectors’ between the blockchain world (e.g. Ethereum) and The Graph network. Subgraphs have a data structures to organize data that Indexers pull from a blockchain. Subgraphs are also a way to define which data you want to get indexed and how to store it. Some of them do pre-aggregations or calculations on their mappings (that is the way they organize the data they retrieve), some just store plain data similar to what you could find on-chain (on-chain is a synonym of blockchain). Then, an entity queries that data. This entity could be a dApp (owned by a company or a developer), or could be a Telegram bot, or a Discord bot, or even a simple user doing a query to find information (e.g. in Graph Explorer you can use the Playground to run searches using subgraphs).
15. What is an Allocation?
An Indexer node enables their services to a specific subgraph by opening an ‘allocation’. This locks a portion of their total stake on that subgraph. Once allocation has been opened, an Indexer starts to earn rewards through query fees paid by consumers and also indexing rewards from The Graph protocol itself. When an Indexer closes the allocation to a specific subgraph, this ends the service cycle on the subgraph. Any pending rewards will be collected, the Indexer will keep a portion and share the largest portion amongst its delegators. It is at this time when you, as a Delegator of the Indexer, receive your GRT rewards.
For example by using Graph Explorer we can see that this Indexer has eight allocations opened, and we can check also how many GRTs are staked for each subgraph. For example SushiSwap’s subgraph has 1.5M GRT allocated.
16. Where I can check my earnings?
Our Graphtronauts App allows you to check how much you are earning from your current delegation(s), both historically and in real time. In addition, you will receive real time notifications within the app (and in Telegram if set up) every time your Indexer(s) closes an allocation and distributes rewards (note the bell in the picture below):
The most important data to look about your rewards are:
- Original delegation: your initial investment in GRT
- Current delegation: the current value of your investment (Original delegation + Total rewards)
- Total rewards: the amount of GRT earned so far
- Pending rewards: calculated in real-time when you open the app, based on the current allocations opened by the Indexer
17. How do I undelegate my GRT?
Undelegate your GRT tokens is an easy process. Keep in mind you will have to wait 28-days before being able to withdraw your tokens, and transfer them back into your wallet. Check our tutorial to discover how easy is to undelegate your GRT:
Do you have any questions?
Graphtronauts is the largest, unofficial community for long-term GRT holders who believe in The Graph’s web3 vision for the future. Our goal is to educate the broader crypto community and help them become contributing members within The Graph ecosystem.
If you have any questions, or concerns, or want to submit feedback, you can reach out to us using our social channels:
- App: graphtronauts.app
- Telegram: t.me/graphtronauts
- Twitter: twitter.com/graphtronauts_c
- YouTube: youtube.com/@graphtronauts
- Blog: blog.graphtronauts.com
- Warpcast: warpcast.com/~/channel/graphtronauts
- Reddit: reddit.com/r/Graphtronauts
- LinkedIn: linkedin.com/company/graphtronauts
Graphtronauts indexer is live on The Graph!
You can read our official launch announcement here.
If you want to delegate to us, you can go directly in Graph Explorer, using the link here.
You can contact us using our dedicated social channels for our Indexer operation:
- Twitter: @graphtronauts_x
- Discord: Join our Server
- Telegram: @GraphtronautsIndexer
- Delegate to us
