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Everything You Need to Know About GRT (The Graph)

By Samuel Becker · August 18, 2021 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Everything You Need to Know About GRT (The Graph)

GRT, or “the Graph” is a relatively new kid on the block when it comes to cryptocurrency. And like some other cryptos, it’s not merely a digital currency—there’s a little more to it than that.

Read on to learn what “the Graph” is, GRTs role, how to buy it, and whether it’s a good investment.

What Is GRT?

The Graph Network, also known as “the Graph” allows users to build APIs, known as subgraphs, to allow applications to talk to each other, and it also makes querying networks fast and secure. While it may require a further deep-dive to really understand the ins and outs of APIs and querying, we’ll save that for another time.

In technical terms, the Graph is a decentralized query protocol built for use with blockchains. More specifically, it works with Ethereum and the InterPlanetary File System (IPFS) to make it easy for users to build and publish APIs, or application program interfaces. Applications built on the Graph do not need a centralized server.

Users also use the Graph to query specific networks (again, like Ethereum or IPFS) to collect data without a third party.

GRT is an ethereum token that runs on the Graph Network. GRT is central to the Graph’s economy. Users swap it to keep things running.

Recommended: What is a Token? Crypto Tokens vs Crypto Coins

History of the Graph (GRT) Crypto

The Graph Network and its token, GRT, are a very new type of cryptocurrency. As of spring 2021, GRT has been on the crypto markets for less than a year.

The team behind the Graph Network includes a slew of industry veterans, and the founding team consists of Yaniv Tal, Brandon Ramirez, and Jannis Pohlmann. They started working on the Graph back in 2017, finally seeing the project come to fruition a few years later.

In October 2020, The Graph Foundation sold roughly $12 million worth of GRT during its initial public sale, comprising 400 million tokens. The Graph protocol launched in December 2020, giving GRT utility.

Some traders or investors have not yet heard about GRT because it’s still very new to the market, but it has gained ground with larger investors. Ten holders control more than half of GRT’s supply.

How Does GRT Work?

In effect, the Graph Network works as an intermediary between blockchains and decentralized applications—it helps the two communicate in a secure and efficient way using a query language called GraphQL. The Network comprises users who need queries to be processed, and who are willing to pay for it. As such, there are indexers, curators, and delegators who make it all happen on the back end.

Some of these users act as GRT stakers, supporting the others, who run nodes and process those queries. To run nodes, however, users must hold a certain stake of GRT token—which is where the token comes into the mix.

GRT allocates resources within the Graph Network, and acts as an incentive for users within the network to keep the Network up and running. That can mean processing queries, improving APIs, etc.

Effectively, the Graph Network is similar to networks like Ethereum in which users use the network for their own purposes, and use GRT tokens to facilitate transactions on the network. GRT also has value outside of the Graph’s ecosystem, although not much utility. It’s the utility on the network that gives it value, and why crypto traders and investors may want to add it to their wallets.

Subgraphs

Users can create open APIs, known as subgraphs, to index and store data pulled from the Ethereum blockchain, like Google indexes data from the Internet. Developers query via GraphQL to build on blockchain with these subgraphs.

GRT Price

Having been in existence on the market for only a handful of months, as of spring 2021, GRT’s price history is short, but fairly volatile.

GRT hit crypto exchanges back in December 2020, as you’ll recall, and its value soon shot up to around $0.70. When many other cryptos started to see values start to skyrocket in February 2021, GRT’s followed suit—although not quite to the lofty heights as some of its crypto cousins.

GRT prices hit their all-time peak (so far) in mid-February 2021, reaching more than $2.70 per token. Since then, prices have slowly declined, and as of July 2021, are hovering around $0.66 per token. So, in a matter of months, GRT’s value has nearly quadrupled, and then fallen by more than 75%.

Recommended: Crypto Bear Markets: What Are They?

Investing in GRT: Benefits and Disadvantages

For investors and traders, GRT won’t have much utility outside of the Graph Network’s ecosystem. Like many other cryptocurrencies, it’s going to be very difficult, if not impossible, to find a business willing to accept GRT in exchange for goods or services. But you can always trade your GRT for US dollars if need be, via an exchange.

Benefits of GRT

For investors or traders, GRT is yet another cryptocurrency that can help diversify a crypto portfolio. GRT’s value is currently down, but there is potential for it to go up in the future, depending on adoption of the Graph Network in the future. But that may require investors to HODL for some time.

Drawbacks of GRT

GRT is a cryptocurrency, which means it comes with a slew of risks. Cryptos are incredibly volatile (as is easy to see with GRT’s price history), and risk-averse investors may have trouble handling daily or weekly price fluctuations. Additionally, there is always the potential that the government could institute or change crypto regulations and rules, which could throw the crypto market into flux.

How to Trade GRT Cryptocurrency

Seasoned crypto traders: You know the drill when it comes to buying GRT or other cryptocurrencies. For newbies, it’s time to go over some investing in crypto basics:

Step 1: Choose an exchange and fund your account

If you want to trade cryptos like GRT, you’ll need to do so on an exchange—it’s pretty much the same thing as choosing a broker to buy stocks. Pick one, fund your account, and get yourself a crypto wallet (if one isn’t offered by the exchange) to store your holdings.

Step 2: Make the trade

Log in to your crypto exchange, and look up GRT—of course, you’ll want to make sure your chosen exchange offers GRT on its platform, first. Assuming it does, the process should be as simple as looking up GRT, deciding how much you want to buy, and executing the trade.

Step 3: Transfer your holdings

With your trade executed and GRT listed among your account holdings, you may want to transfer your tokens to your crypto wallet. Do some research into different types of wallets, and see which is right for you depending on how long you plan to hold onto your GRT.

The Takeaway

GRT is a relatively new ethereum token that powers the Graph, a decentralized protocol that indexes and queries blockchains. Users can build subgraphs, known as APIs, that can collect data without a third-party.

Understanding the intricacies of GRT and APIs, can be complicated for non-expert crypto investors. That said, if crypto investing is something that catches your fancy, you can wade in using the SoFi Invest® brokerage app. With SoFi invest, you can build your own investment portfolio, including cryptocurrencies as well as stocks, and exchange-traded funds.

Photo credit: iStock/Eva-Katalin


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