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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!
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Monthly Core Dev updates
Core development teams are now posting monthly updates in this forum section Core Team Updates - The Graph.
Soon, you’ll also find regular updates from all Working Groups and Task Forces on all major components of The Graph stack. Stay tuned!
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.
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.
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!