Introduction

One of the key features of blockchain networks is the public nature of transaction data. This transparency allows all user activities—such as cryptocurrency transfers, lending, and NFT minting and trading—to be recorded on the blockchain, ensuring this information is permanently available. As smart contracts have developed and matured, a growing number of on-chain projects have emerged, transforming blockchain into a vast database where all interactions with the blockchain can be recorded—known as on-chain data.

On-chain data is vital for navigating this fast-paced market and can be broadly classified into three categories: transaction data (which includes details like transfer amounts and addresses), block data (information about the blocks themselves, such as timestamps), and smart contract code (the programmed business logic on the blockchain). While on-chain data is public and transparent, users often struggle to query this data for insights directly. Analyzing the data independently requires setting up nodes to access blockchain data and processing it—this is a time-consuming and labor-intensive task. Numerous analysis platforms have emerged to facilitate quick access to on-chain data. As blockchain technology advances, the on-chain data analysis industry is also growing rapidly, providing various products tailored for individual and institutional users.

Mainstream on-chain data analysis platforms typically index raw on-chain data, process it through several steps, and store it in managed data warehouses. These platforms can be divided into three main categories:

1. Data Collection: Platforms like MetaMask that choose to set up their own nodes to access on-chain data can face significant time and financial investment and the risk of memory leaks. As a result, many platforms rely on third-party node service providers, such as Infura and Quicknode, for data collection.
2. Data Querying: Some data service providers focus on offering query services, parsing and formatting data to create visual representations that make the raw data more accessible. A notable example is The Graph, a decentralized search engine for indexing and querying blockchain data.
3. On-chain Data Analysis: In this sector, providers collect, process, and integrate data, with on-chain data analysts delivering real-time reports to clients, typically institutional or individual investors. Dune Analytics is an example of a platform that supports on-chain data querying and analysis, with skilled analysts producing reports for their clients.

Subsquid Network is a decentralized query engine that extracts and optimizes large volumes of on-chain data while ensuring security through zero-knowledge proof technology. It offers on-chain data from over 100 EVM and Substrate networks, including event logs, transaction receipts, tracing, and status differences for each transaction. This article will delve into its main products, features, and characteristics and analyze its token model and current development status.

Introduction to Subsquid Network

Subsquid Network is a query engine built on the Substrate blockchain that efficiently combines on-chain and off-chain data while ensuring security through zero-knowledge proof technology. It operates as a decentralized worker network, where each node stores data from a specific subset of blocks. This design allows for faster data retrieval by quickly identifying the nodes that contain the needed data, enabling developers to access information in a cost-effective, personalized, and real-time manner.

Additionally, the protocol supports real-time indexing, which allows data to be indexed even before a block is finalized. It also enables developers to store data in their preferred formats, making analysis easier with tools like BigQuery, Parquet, or CSV.

In September 2023, Subsquid Network launched an incentivized testnet on CoinList, attracting nearly 20,000 developers and participants. On June 3 of this year, it launched the mainnet for its data lake. Earlier, on January 19, CoinList announced the start of the community sale for the Subsquid (SQD token), and the native SQD token was officially released in mid-May.

The project was co-founded by Marcel Fohrmann, who studied at Stanford University’s business school, and Dmitry Zhelezo, a PhD in mathematics. Dmitry has a strong background as a core developer for Hydra at Jsgenesis and previously served as the chief scientist at Helix Cognitive Computing, bringing over 8 years of development experience to the team.

In November 2021, the team secured $3.8 million in seed funding, led by Hypersphere Ventures, with additional investment from Zeeprime Capital, Lattice Capital, Digital Finance Group (DFG), and others. The protocol is actively expanding its partnerships and has formed strategic collaborations with projects like the Polkadot ecosystem prediction market Zeitgeist, blockchain venture capital fund NewTribe Capital, and Deutsche Telekom MMS.

Main Products

The indexer enables complex queries, allowing users to easily filter data based on various criteria and extract it for further analysis. Some features also allow data aggregation from multiple sources, eliminating the need to deploy multiple APIs in multi-chain DApps. The indexer’s distribution across several nodes enhances both security and performance.

Currently, Subsquid Network offers four main products:

(1) Squid SDK: This is a collection of open-source TypeScript libraries designed for retrieving, decoding, transforming, and saving data from the Subsquid network. It can also provide transformed data through an API without accessing archived RPC. All stages of the indexing pipeline, from data extraction to transformation to storage, are performed on batch blocks to optimize indexing speed. The SDK’s modular architecture allows developers to use custom plugins and data targets to enhance their indexing projects.

(2) Subsquid Cloud: A hosting service for custom indexers and GraphQL APIs. By utilizing this service, developers can avoid the costs and complexities of maintaining indexing infrastructure.

Source：www.sqd.dev/cloud

(3) Subsquid Firehose: A lightweight adapter that allows users to run subgraphs against the Subsquid network. It functions as a sidebar to the graph indexer node, extracting and filtering data directly from the SQD network instead of relying on RPC endpoints. However, since the network does not provide real-time blocks, it can seamlessly extract the latest and pending blocks from supplementary RPC endpoints if needed.

(4) ApeWorx Subsquid Plugin: This is a modular Web3 development framework targeted at Python developers. It can retrieve blockchain data in bulk and access historical data for individual accounts, though it is currently in the testing phase.

Product Features

Indexing on-chain data is essential for developing Web3 DApps and analyzing dashboards. Utilizing the Squid SDK, the protocol currently offers several key features:

(1) Efficient Data Indexing

Subsquid provides a highly efficient data indexing system that allows developers to access blockchain data quickly and accurately. By optimizing data structures and query mechanisms, it significantly enhances data access speed.

(2) Flexible Query System

Subsquid features a flexible query system, enabling developers to tailor queries to their specific needs and retrieve targeted blockchain data. This adaptability is useful across various applications, including decentralized finance (DeFi), gaming, and supply chain management.

(3) Comprehensive Data Coverage

Subsquid currently offers historical on-chain data from over 100 EVM and Substrate networks, as well as Starknet. The data encompasses event logs, transaction receipts, tracking information, and the status changes for each transaction.

Source: network.subsquid.io/dashboard

Before the mainnet launch, accessing data from the Subsquid network was free. However, following the launch of the data lake mainnet in June, the anticipated cost for extracting 1TB of data will be between $1 and $5.

Economic Model

SQD is the native token of the Subsquid Network, with a total supply of 1.337 billion tokens. The smart contract for the token is deployed on the Ethereum mainnet and is bridged to Arbitrum One.

In September 2023, the Subsquid Network launched an incentivized testnet on CoinList, attracting nearly 20,000 developers and participants. The SQD community sale on CoinList began on January 19, 2023, at 02:00 (UTC+8), offering an initial supply of 53,480,000 SQD tokens, representing 4% of the total supply, for $0.094 per token. The initial purchase limits were set at a minimum of $50 and a maximum of $2,000 (only in USDT or USDC). Of the tokens sold during the initial sale, 20% will be released after the Token Generation Event (TGE), while the remaining 80% will be released linearly over the following six months. Participants from the United States, Canada, China, South Korea, and certain other regions are not eligible to participate. Additionally, Subsquid can sell an extra 13.37 million SQD tokens (1% of the total supply) during the community sale period. As a result, the total percentage of tokens sold in the community sale amounts to 5%.

The official distribution details and unlocking schedule for the SQD tokens have been published, as shown in the table below:

Source: docs.sqd.dev/subsquid-network/tokenomics

SQD is actively participating in ecosystem activities, primarily aimed at securing network operations. Its main applications can be summarized as follows:

1. Node Operator Rewards: SQD tokens are used to reward node operators who provide the network with computational and storage resources.
2. Network Participant Management: The SQD token design includes built-in oversight for nodes. This allows participants to delegate and easily select trustworthy operators without needing permission, ensuring they are rewarded for their contributions.
3. Rate Limit Enhancement: By locking SQD tokens, users can increase the rate limits for data consumption, providing better service access.
4. Governance Voting: SQD holders can participate in governance by voting on protocol changes and other proposals, giving them a say in the network’s future direction.

Conclusion

Subsquid efficiently aggregates a large amount of on-chain and off-chain data, securing it through zero-knowledge proofs. Its unique modular architecture allows developers optimal flexibility and customization. The team’s vision is to become a unified data center for Web3, aiming to build and prepare data from all chains. They plan to support scalability to major ecosystems like Solana, Ethereum, and Layer 2 solutions. With the growth of data storage and network participation, the Subsquid Network has significant potential for development in the future.