Special Upcoming Core Dev Call (AMA on GIP-0070: Evolving The Graph Protocol Economics)

:information_source: The 33rd Core Dev call is happening 2025-01-23T17:00:00Z.

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:notebook: Agenda:

This is a special one, focused exclusively on GIP-0070: Evolving The Graph Protocol Economics
@Rem , from Edge & Node, will walk us through the main motivation and goals of such GIP.
We hope to see protocol participants engaging in the discussion.
If you have questions about the future of the protocol, this is your opportunity to participate - we want to hear from you!

:tv: The recording will be uploaded here.


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Core development teams are now posting monthly updates in this forum section Core Team Updates - The Graph.
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See you Thursday! :astronaut:

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For GIP-0070, please also see the Evolving The Graph Protocol Economics (2024) post.

I encourage attendees to read the post and GIP prior to the call, and come prepared with any questions. I look forward to discussing the proposal with you. :slight_smile:

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SUMMARY

The 33rd Core Dev Call focuses on GIP-0070 (Evolving The Graph Protocol Economics), introduced by Rembrandt Kuipers (Rem) of Edge & Node. Discussion centers on improving The Graph’s incentive structure without losing its existing strengths. All participants were encouraged by REM and Pedro to read the full GIP and provide feedback on the Forum.

Table of Contents

Topic Details Covered
Introduction & Goals GIP-70 Overview
Outlines key principles for maintaining The Graph’s long-term stability and growth, focusing on network balance, incentive alignment, and continuous improvement.

Maintaining Network Balance
Ensures incentives remain balanced while enabling new use cases like the Knowledge Graph.

Enhancing Incentive Alignment
Links rewards more closely to consumer value, preventing passive earnings without user queries.

Sustaining Continuous Improvement
Transitions revenue sources from issuance subsidies to external usage fees for long-term viability.

Design Principles Synergistic Open Primitives
Utilizes modular open primitives (subgraphs, Substreams, knowledge graph) to enhance adaptability.

Consumer Value Alignment
Ensures rewards flow to contributors who create measurable end-user value.

Self-Balancing Market
Reduces rigid global settings, allowing flexible fee structures for organic equilibrium.

Proposed Solutions Network Payments and Network Rewards
Refines Indexer compensation, tying payments to performance and service quality.

Dynamic Fee Cuts for Query Incentives
Replaces the fixed 10% query-fee cut with a dynamic range (e.g., 2–50%) based on actual usage.

Sponsor Incentives for Indexing
Rewards sponsors based on the real usage they enable, balancing supply and demand.

Upgraded Curation Model
Shifts curation from deposits to locked GRT, allowing curators to signal valuable services without losing their principal.

Sustainability Self-Balancing Issuance
Reallocates issuance dynamically to balance rewards across contributions rather than over-relying on indexing.

Tapering Subsidies
Reduces issuance-based indexing subsidies as external revenue grows, ensuring a smooth transition.

Questions & Answers Primitive Implementation Order
Primitives are not strictly sequential; some will be tackled in parallel or piloted in stages.

Indexer Income Target for Tapering
Finalizing an external reference to prevent perpetual issuance due to GRT price changes.

Knowledge Graph Discussion
A dedicated session on knowledge graphs is planned for the near future.

Next Steps for GIP-70
Governance approval process followed by detailed GIPs to refine technical specifications. Community discussion continues on the Forum, GitHub, Discord, and Office Hours.


INTRODUCTION
04:00

GIP-70 outlines key principles for maintaining The Graph’s long-term stability and growth. It focuses on network balance, incentive alignment, and continuous improvement to ensure a fair, efficient, and adaptable ecosystem.

Maintaining Network Balance

Maintaining network balance means preserving the ecosystem’s holistic design. Any modifications should keep incentives balanced so that no group is neglected and new uses (e.g., Knowledge Graph) can emerge.

Enhancing Incentive Alignment

Enhancing incentive alignment requires tighter coupling of rewards to actual consumer value. Under the current model, Indexers may earn rewards without necessarily serving user queries. The proposal shifts rewards toward genuine contributions.

Sustaining Continuous Improvement

Sustaining continuous improvement calls for a protocol that remains nimble for future changes. Over time, The Graph should derive greater revenue from external usage fees and rely less on issuance subsidies. This measured transition helps maintain stability and long-term viability.

DESIGN PRINCIPLES

Synergistic Open Primitives

The protocol adopts modular “open primitives” (subgraphs, Substreams, knowledge graph) that can be reused without frequent redesign. This approach, expanded from earlier Graph Horizon concepts, fosters adaptability for diverse data services and roles within the network.

Consumer Value Alignment

Consumer value alignment prioritizes network activities that deliver verifiable benefit to end users. Rewards should not be granted for merely “going through the motions”; rather, issuance flows to those who produce clear consumer-facing outcomes.

Self-Balancing Market

Self-balancing market dynamics reduce rigid global settings. Instead of imposing fixed fees or cuts everywhere, participants can choose parameters that make sense for their use cases, achieving equilibrium organically rather than by decree.

PROPOSED SOLUTIONS

Network Payments and Network Rewards

Network Payments and Network Rewards refine how Indexers get compensated:

  • Network Payments fund tasks like indexing or quality checks via issuance, but require good performance.

  • Network Rewards replace raw “indexing rewards,” adding service-quality criteria so that only valuable contributions earn issuance.

Dynamic Fee Cuts for Query Incentives

A dynamic range (e.g., 2–50%) replaces the current fixed 10% query-fee cut. This lets subgraphs or modules set variable percentages based on actual usage or consumer demand, making the system more efficient and equitable.

Sponsor Incentives for Indexing

Sponsors (anyone who pays GRT for network capabilities) earn rewards proportionate to the real usage they enable. This balances supply with genuine demand, preventing “free-riding” on indexing.

Upgraded Curation Model

Curation shifts from deposits to locked GRT. Curators lock GRT to signal which services (subgraphs, knowledge graphs, etc.) deserve indexing. Instead of using the locked GRT to pay Indexers, issuance covers those rewards—ensuring Curators keep their principal while still incentivizing valuable additions.

SUSTAINABILITY

Self-Balancing Issuance

Instead of routing all new tokens to one bucket (indexing), issuance can automatically rebalance to other contributions (e.g., sponsor-driven or curation-driven), adjusting gradually to meet new network demands without sharply reducing Indexer compensation.

Tapering Subsidies

Historically, indexing rewards were subsidized to bootstrap adoption. As external fee revenue grows, issuance-based indexing subsidies taper. For each $10 million of external income, indexing allocations drop by $5 million. Indexers still benefit from rising usage, while the protocol steadily transitions to consumer-driven economics.

QUESTIONS & ANSWERS

Q: “Are the primitives ordered by the sequence of improvement?”

A: They are not necessarily implemented in a strict sequence. While each part of the proposal might map to a future GIP, some of these will be tackled in parallel or piloted in smaller stages. The speaker explained that implementing upgraded curation (locking GRT, distributing issuance, etc.) could come first, but everything will evolve in overlapping phases rather than a simple linear order.

Q: “You mentioned on the tapering mechanism: how do you set the indexer income target, and is it tied to something external?”

A: The specific target and reference (e.g., fiat value) aren’t finalized. It’s important to avoid a situation where issuance never tapers because GRT’s price changes. A neutral, external basis will likely be necessary so that the subsidy diminishes steadily as external query-fee income grows. Determining the exact approach is one of the more challenging aspects still to be detailed in future GIPs.

Q: I don’t think we’ve covered knowledge graphs in these calls—will that be addressed soon?”

A: Yes. Knowledge graphs are a key upcoming topic. While they were referenced in this proposal overview, there will be a dedicated presentation or call focused on knowledge graphs in the near future to explore their role in the network.

Q: Which are the next steps with this proposal?

A: It must go through the governance process to gain community and council approval. Because GIP-0070 is more of an overarching roadmap than an immediately implementable spec, the next phase is gathering wide support. After that, detailed GIPs (with the technical formulas and algorithms) will follow. Meanwhile, discussion continues on the forum, GitHub, Discord, and in Indexer Office Hours.

LEAVE FEEDBACK



Stay Tuned!

Join us next month for Core Devs Call #34…
Keep up to date by joining discussions in the forum, following The Graph on X or joining the Discord server!

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