This month in curation #2 | April
Welcome to this month in curation April. Here we will highlight relevant information for curators and subgraph developers. This month we have some really exciting news, as we rapidly close in on mainnet migration.
The Graph’s Migration Path to Mainnet.
The Graph’s mainnet migration process has been announced. I encourage you to read the full blogpost here. The process is divided in three phases and will occur over several months.
Phase 1: Migration Bootstrapping. Starting this month (april) the first production subgraphs will be migrated from The Graph’s hosted service to the decentralized network!
Phase 2: Production dApps. Migration Partners will test their dApps on the live network. After a QA process, they will switch their production dApps to the network, bringing query fees to Indexers and Delegators.
Phase 3: Curation Live. A public Gateway and a set of products are expected to launch 30 to 60 days after the start of Phase 1, bringing The Graph Network out of beta. Developers will be able to use self-service tools to publish subgraphs to the decentralized network in a permissionless manner. Curation will also go live, allowing Curators to signal on subgraphs.
Preparing for curation #2 - Risks & Benefits of curating
This month, we will discuss some of the most important factors to consider when curating.
Query Fees - By signalling on a subgraph, you would earn a share of all the query fees that subgraph generates. 10% of all query fees goes to the Curators pro rata to their curation shares.
Bonding Curve - Curation is an open market where anyone will be able to buy (“mint”) or sell (“burn”) curation shares. The GRT valuation of each share will increase or decrease along a bonding curve. For more information on bonding curves, see This month in curation #1. Minting and burning curation shares is similar to trading assets on other automated market makers, like Uniswap. To make this clear, I will give two examples;
You have identified a subgraph that provides valuable data, and that you believe will attract a lot of queries in the future. Currently, there are not a lot of Curators signalling on this subgraph. You deposit GRT to mint curation shares. Your assessment were right, and the subgraph starts to generate a lot of query fees. Other Curators sees this and mints (“buys”) shares too. Your shares are now worth more GRT than you initially deposited. You can keep your shares, and continue to earn query fees for that subgraph. Or you can sell your shares for a profit.
Now for another example; You notice a lot of Curators are signalling on a subgraph. You have not looked at the subgraph yourself, but assume your fellow Curators have done their due diligence. You deposit GRT to mint curation shares. Not long afterwards, some of the early Curators of this particular subgraph decides to sell their shares for a profit. The “price” of each curation share falls below your “buy-in price”. If you were to sell your shares, you would now withdraw less GRT than you initially deposited.
Curation Tax - When you curate on a subgraph, a 2.5% curation tax is incurred.
Subgraph versions - When a new subgraph version gets deployed, the older versions will continue to exist. Each version of a subgraph has it’s own individual bonding curve. A Curator can choose to signal on a specific version, or they can choose to have their curation shares automatically migrate to the newest production build. Both are valid strategies, and comes with their own pros and cons.
Signaling on a specific version is especially useful when one subgraph is used by multiple dApps. One dApp might have the need to regularly upgrade the subgraph with new features. Another dApp might prefer to use an older, well tested subgraph version.
Having your curation shares automatically migrate to the newest production build could be valuable to ensure you keep accruing query fees. However, you will pay 1.25% curation tax on every migration. Subgraph developers are discouraged from frequently deploying new versions; They will have to pay 1.25% curation tax on all auto-migrated curation shares.
Volatility - The curation shares are minted and burned along a bonding curve. The GRT price and “dollar value” of each share will fluctuate.
Tax Liability - Actively participating in the curation market might have tax implications.
ETH Gas prices - Curation happens on-chain on the ethereum mainnet. Every interaction with the contracts will cost ETH gas.
GIP0002 and GIP0004 have been hot topics this last month. These Graph Improvement Proposals describes a mechanism for Indexers to withdraw future rewards to a desingated address. For an overview of the proposals, as well as additional resources, check out “This month in indexing - March” . On March 29th, the upgrade described by GIP-0002 was implemented. More information in this post by @Brandon
The topic of GIP0002 and GIP0004 sparked a lot engagement from the community. A highly discussed topic was letting Delegator rewards be withdrawable to a separate address, which is relevant to testnet Curators who delegate their locked tokens. In particular I recommend reading this post by @Davekaj.
The Graph Foundation has allocated over $5M to grants, ecosystem contributors and bounties. The announcement has more information and the full list of Wave 1 Grants. Are you working on a project that could benefit the ecosystem? Find more information about our grants, and how to apply, here.
- Other governance milestones:
Curator Testnet Rewards
Many Curators are having questions about their vested testnet rewards. I will cover some of the most frequent questions here.
When will the tokens unlock?
The tokens will unlock every 3 months over 4 years. The exact times for each release are:
1616113800 1624003200 1631892600 1639782000 1647671400 1655560800 1663450200 1671339600 1679229000 1687118400 1695007800 1702897200 1710786600 1718676000 1726565400 1734454800
2021-03-19 00:30 2021-06-18 08:00 2021-09-17 15:30 2021-12-17 23:00 2022-03-19 06:30 2022-06-18 14:00 2022-09-17 21:30 2022-12-18 05:00 2023-03-19 12:30 2023-06-18 20:00 2023-09-18 03:30 2023-12-18 11:00 2024-03-18 18:30 2024-06-18 02:00 2024-09-17 09:30 2024-12-17 17:00
How many tokens will unlock?
1/16th of the initial amount are unlocked every 3 months over 4 years.
Will the unlocked tokens appear in my beneficiary address ?
No, you will have to manually release and withdraw your tokens. You can find a guide on how to do this here.
Do I need to undelegate my tokens before releasing them?
Yes, your tokens will need to be in your vestment contract before you can release and withdraw them to your beneficiary wallet.
If your tokens are delegated, you will first need to undelegate them. After the 28 epoch thawing period, withdraw them to your vestment contract. Once they are in your vestment contract, **follow this guide on how to release and withdraw your tokens to your beneficiary wallet.
Note: To release unlocked tokens, you only need to undelegate the exact amount you wish to release.
I have earned rewards through delegation. Are these unlocked, and how do I withdraw them?
Your delegation rewards are not locked. However, withdrawing them to your beneficiary wallet requires you to hold all your locked tokens, plus the surplus you wish to withdraw, in your vestment contract.
This means that to withdraw all of your delegation rewards, you must first undelegate ALL tokens. After the 28 epoch thawing period, withdraw them to your vestment contract. You can then use the withdrawSurplus() function of the vestment contract to withdraw all surplus tokens to your beneficiary wallet.
There is a push to let Delegator rewards be withdrawable to a separate address. This would allow access to future rewards, without having to undelegate all our tokens.
We have launched “Developer Highlights” Each episode will feature an expert subgraph developer sharing his experience building on The Graph. We will do deep dives into specific features or tooling used for subgraph development. This will be of great value to both beginner and experienced subgraph developers.
The first episode featured @Juanmardefago. We talked about using dynamic data sources (templates) to future proof our subgraphs. If your dApp deploys contracts using a Factory or Proxy pattern, this episode will be invaluable to you! Check out the video here!
The upcoming episode will feature Sebastian Siemssen & Ivan Herger from Enzyme Finance (formerly Melon Protocol). We are going to explore some of the more demanding event tracking, data aggregation and scaling requirements of a DeFi subgraph. We encourage anyone to ask questions here. We will try to answer them in the video.
If you have any suggestions on topics we should cover or initiatives you’d like to see, we would love to hear it. Comment below, or contact me directly. You can also find me at discord Slimchance#1699