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Mitchell/Curation Page Updates (#671)
* updating curation page with support email * rewrote some sections and tweaked some words * adding Idalith edits --------- Co-authored-by: Adam Fuller <[email protected]>
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| title: Curating | ||
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| Curators are critical to the Graph decentralized economy. They use their knowledge of the web3 ecosystem to assess and signal on the subgraphs that should be indexed by The Graph Network. Through Graph Explorer, curators are able to view network data to make signaling decisions. The Graph Network rewards curators who signal on good quality subgraphs with a share of the query fees that subgraphs generate. These cues from curators are important for Indexers, who can then process or index the data from these signaled subgraphs. | ||
| Curators are critical to The Graph's decentralized economy. They use their knowledge of the web3 ecosystem to assess and signal on the subgraphs that should be indexed by The Graph Network. Through Graph Explorer, Curators view network data to make signaling decisions. In turn, The Graph Network rewards Curators who signal on good quality subgraphs with a share of the query fees those subgraphs generate. The amount of GRT signaled is one of the key considerations for indexers when determining which subgraphs to index. | ||
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| When signaling, curators can decide to signal on a specific version of the subgraph or to signal using auto-migrate. When signaling using auto-migrate, a curator’s shares will always be updated to the latest version published by the developer. If you decide to signal on a specific version instead, shares will always stay on this specific version. | ||
| ## What Does Signaling Mean for The Graph Network? | ||
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| ## Curating on Ethereum vs Arbitrum | ||
| Before consumers can query a subgraph, it must be indexed. This is where curation comes into play. In order for Indexers to earn substantial query fees on quality subgraphs, they need to know what subgraphs to index. When Curators signal on a subgraph, it lets Indexers know that a subgraph is in demand and of sufficient quality that it should be indexed. | ||
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| Indexers can trust the signal from a Curator because upon signaling, Curators mint a curation share for the subgraph, entitling Curators to a portion of future query fees that the subgraph drives. | ||
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| Curators make The Graph network efficient and [signaling](#how-to-signal) is the process that curators use to let Indexers know that a subgraph is good to index; where GRT is added to a bonding curve for a subgraph. Indexers can trust the signal from a curator because upon signaling, curators mint a curation share for the subgraph, entitling them to a portion of future query fees that the subgraph drives. | ||
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| Curator signals are represented as ERC20 tokens called Graph Curation Shares (GCS). Those that want to earn more query fees should signal their GRT to subgraphs that they predict will generate a strong flow of fees to the network. Curators cannot be slashed for bad behavior, but there is a deposit tax on Curators to disincentivize poor decision-making that could harm the integrity of the network. Curators will also earn fewer query fees if they curate on a low-quality subgraph because there will be fewer queries to process or fewer Indexers to process them. | ||
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| The behavior of the curation mechanism differs depending on the protocol chain deployment, specifically, how the price of a subgraph share is calculated is the biggest difference. | ||
| The [Sunrise Upgrade Indexer](/sunrise/#what-is-the-upgrade-indexer) ensures the indexing of all subgraphs, signaling GRT on a particular subgraph will draw more indexers to it. This incentivization of additional Indexers through curation aims to enhance the quality of service for queries by reducing latency and enhancing network availability. | ||
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| The Graph Network's original deployment on Ethereum uses bonding curves to determine what the price of shares is: **the price of each subgraph share increases with each token invested** and the **price of each share decreases with each token sold.** This means that curating puts your principal at risk, since it's not guaranteed you can sell your shares and get back your original investment. | ||
| When signaling, Curators can decide to signal on a specific version of the subgraph or to signal using auto-migrate. If they signal using auto-migrate, a curator’s shares will always be updated to the latest version published by the developer. If they decide to signal on a specific version instead, shares will always stay on this specific version. | ||
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| On the Arbitrum deployment curating subgraphs becomes significantly simpler. The bonding curves are "flattened", their effect is nullified meaning no curator will be able to realize gains at the expense of others. This allows Curators to signal or unsignal on subgraphs at any given time, at a consistent cost with very limited risk. | ||
| To assist teams that are transitioning subgraphs from the hosted service to the Graph Network, curation support is now available. If you require assistance with curation to enhance the quality of service, please send a request to the Edge & Node team at [email protected] and specify the subgraphs you need assistance with. | ||
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| If you are interested in curating on Ethereum and want to understand the details of bonding curves and it's effects see [Bonding Curve 101](#bonding-curve-101). Please do your diligence to make sure you curate on subgraphs you trust. Creating a subgraph is permissionless, so people can create subgraphs and call them any name they'd like. For more guidance on curation risks, check out [The Graph Academy's Curation Guide.](https://thegraph.academy/curators/) | ||
| Indexers can find subgraphs to index based on curation signals they see in Graph Explorer (screenshot below). | ||
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| ## How to Signal | ||
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| > **Note**: The first address to signal a particular subgraph is considered the first curator and will have to do much more gas-intensive work than the rest of the following curators because the first curator initializes the curation share tokens, initializes the bonding curve (even on Arbitrum), and also transfers tokens into the Graph proxy. | ||
| ## What does Signaling mean for The Graph Network? | ||
| ## Withdrawing your GRT | ||
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| For end consumers to be able to query a subgraph, the subgraph must first be indexed. Indexing is a process where files, data, and metadata are looked at, cataloged, and then indexed so that results can be found faster. In order for a subgraph’s data to be searchable, it needs to be organized. | ||
| Curators have the option to withdraw their signaled GRT at any time. | ||
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| And so, if Indexers had to guess which subgraphs they should index, there would be a low chance that they would earn robust query fees because they’d have no way of validating which subgraphs are good quality. Enter curation. | ||
| Unlike the process of delegating, if you decide to withdraw your signaled GRT you will not have to wait for a cooldown period and will receive the entire amount (minus the 1% curation tax). | ||
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| Curators make The Graph network efficient and signaling is the process that curators use to let Indexers know that a subgraph is good to index, where GRT is added to a bonding curve for a subgraph. Indexers can trust the signal from a curator because upon signaling, curators mint a curation share for the subgraph, entitling them to a portion of future query fees that the subgraph drives. Curator signal is represented as ERC20 tokens called Graph Curation Shares (GCS). Curators that want to earn more query fees should signal their GRT to subgraphs that they predict will generate a strong flow of fees to the network. Curators cannot be slashed for bad behavior, but there is a deposit tax on Curators to disincentivize poor decision-making that could harm the integrity of the network. Curators also earn fewer query fees if they choose to curate on a low-quality Subgraph since there will be fewer queries to process or fewer Indexers to process those queries. | ||
| Once a curator withdraws their signal, indexers may choose to keep indexing the subgraph, even if there's currently no active GRT signaled. | ||
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| Later, Indexers can find subgraphs to index based on curation signals they see in The Graph Explorer (screenshot below). | ||
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| However, it is recommended that curators leave their signaled GRT in place not only to receive a portion of the query fees, but also to ensure reliability and uptime of the subgraph. | ||
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| ## Risks | ||
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| - If you are subscribed to the newest version of a subgraph, your shares will auto-migrate to that new version. This will incur a 0.5% curation tax. | ||
| - If you have signaled on a specific subgraph version and it fails, you will have to manually burn your curation shares. You can then signal on the new subgraph version, thus incurring a 1% curation tax. | ||
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| ## Bonding Curve 101 | ||
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| > **Note**: this section only applies to curation on Ethereum since bonding curves are flat and have no effect on Arbitrum. | ||
| Each subgraph has a bonding curve on which curation shares are minted when a user adds signal **into** the curve. Each subgraph’s bonding curve is unique. The bonding curves are architected so that the price to mint a curation share on a subgraph increases linearly, over the number of shares minted. | ||
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| As a result, price increases linearly, meaning that it will get more expensive to purchase a share over time. Here’s an example of what we mean, see the bonding curve below: | ||
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| Consider we have two curators that mint shares for a subgraph: | ||
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| - Curator A is the first to signal on the subgraph. By adding 120,000 GRT into the curve, they are able to mint 2000 shares. | ||
| - Curator B’s signal is on the subgraph at some point in time later. To receive the same amount of shares as Curator A, they would have to add 360,000 GRT into the curve. | ||
| - Since both curators hold half the total of curation shares, they would receive an equal amount of curator royalties. | ||
| - If any of the curators were now to burn their 2000 curation shares, they would receive 360,000 GRT. | ||
| - The remaining curator would now receive all the curator royalties for that subgraph. If they were to burn their shares to withdraw GRT, they would receive 120,000 GRT. | ||
| - **TLDR:** The GRT valuation of curation shares is determined by the bonding curve and can be volatile. There is potential to incur big losses. Signaling early means you put in less GRT for each share. By extension, this means you earn more curator royalties per GRT than later curators for the same subgraph. | ||
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| In general, a bonding curve is a mathematical curve that defines the relationship between token supply and asset price. In the specific case of subgraph curation, **the price of each subgraph share increases with each token invested** and the **price of each share decreases with each token sold.** | ||
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| In the case of The Graph, [Bancor’s implementation of a bonding curve formula](https://drive.google.com/file/d/0B3HPNP-GDn7aRkVaV3dkVl9NS2M/view?resourcekey=0-mbIgrdd0B9H8dPNRaeB_TA) is leveraged. | ||
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| ## Curation FAQs | ||
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| ### 1. What % of query fees do Curators earn? | ||
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| By signalling on a subgraph, you will earn a share of all the query fees that this subgraph generates. 10% of all query fees goes to the Curators pro-rata to their curation shares. This 10% is subject to governance. | ||
| By signalling on a subgraph, you will earn a share of all the query fees that the subgraph generates. 10% of all query fees go to the Curators pro-rata to their curation shares. This 10% is subject to governance. | ||
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| ### 2. How do I decide which subgraphs are high quality to signal on? | ||
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| - As a Curator on Ethereum, you need to know that when you burn your curation shares to withdraw GRT, you can end up with more or less GRT than you initially deposited. | ||
| - As a Curator on Arbitrum, you are guaranteed to get back the GRT you initially deposited (minus the tax). | ||
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| ### 6. Am I eligible for a curation grant? | ||
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| Curation grants are determined individually on a case-by-case basis. If you need assistance with curation, please send a request to [email protected]. | ||
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| ## Curating on Ethereum vs Arbitrum | ||
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| The behavior of the curation mechanism differs depending on the protocol chain deployment, notably, how the price of a subgraph share is calculated. | ||
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| The Graph Network's original deployment on Ethereum uses bonding curves to determine what the price of shares is: **the price of each subgraph share increases with each token invested** and **the price of each share decreases with each token sold.** This means that curating puts your principal at risk, since it's not guaranteed you can sell your shares and get back your original investment. | ||
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| On Arbitrum, curating subgraphs becomes significantly simpler. The bonding curves are "flattened", their effect is nullified meaning no Curator will be able to realize gains at the expense of others. This allows Curators to signal or unsignal on subgraphs at any given time, at a consistent cost, and with very limited risk. | ||
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| If you are interested in curating on Ethereum and want to understand the details of bonding curves and their effects see [Bonding Curve 101](#bonding-curve-101). Please do your diligence to make sure you curate on subgraphs you trust. Creating a subgraph is permissionless, so people can create subgraphs and call them any name they'd like. For more guidance on curation risks, check out [The Graph Academy's Curation Guide.](https://thegraph.academy/curators/) | ||
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| ## Bonding Curve 101 | ||
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| > **Note**: this section only applies to curation on Ethereum since bonding curves are flat and have no effect on Arbitrum. | ||
| Each subgraph has a bonding curve on which curation shares are minted when a user adds signal **into** the curve. Each subgraph’s bonding curve is unique. The bonding curves are architected so that the price to mint a curation share on a subgraph increases linearly, over the number of shares minted. | ||
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|  | ||
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| As a result, price increases linearly, meaning that it will get more expensive to purchase a share over time. Here’s an example of what we mean, see the bonding curve below: | ||
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|  | ||
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| Consider we have two curators that mint shares for a subgraph: | ||
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| - Curator A is the first to signal on the subgraph. By adding 120,000 GRT into the curve, they are able to mint 2000 shares. | ||
| - Curator B’s signal is on the subgraph later at some point. To receive the same amount of shares as Curator A, they would have to add 360,000 GRT into the curve. | ||
| - Since both curators hold half the total of curation shares, they would receive an equal amount of curator royalties. | ||
| - Now, if any of the curators were to burn their 2000 curation shares, they would receive 360,000 GRT. | ||
| - The remaining curator would now receive all the curator royalties for that subgraph. If they were to burn their shares to withdraw GRT, they would receive 120,000 GRT. | ||
| - **TLDR:** The GRT valuation of curation shares is determined by the bonding curve and can be volatile. There is potential to incur big losses. Signaling early means you put in less GRT for each share. By extension, this means you earn more curator royalties per GRT than later curators for the same subgraph. | ||
|
|
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| In general, a bonding curve is a mathematical curve that defines the relationship between token supply and asset price. In the specific case of subgraph curation, **the price of each subgraph share increases with each token invested** and **the price of each share decreases with each token sold.** | ||
|
|
||
| In the case of The Graph, [Bancor’s implementation of a bonding curve formula](https://drive.google.com/file/d/0B3HPNP-GDn7aRkVaV3dkVl9NS2M/view?resourcekey=0-mbIgrdd0B9H8dPNRaeB_TA) is leveraged. | ||
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| Still confused? Check out our Curation video guide below: | ||
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| <VideoEmbed youtube="VytTEcf0dxQ" /> | ||