As we enter the new year and reflect on the second half of last year’s cryptocurrency market, we see that emotions and hot topics seemed to experience roller-coaster-like fluctuations.

In September, some Ethereum developers stated that they felt they had “chosen the wrong industry,” citing that most projects lacked innovation and genuine demand. At the same time, there was also a sentiment suggesting that investing in tokens from the previous cycle was a waste of time. There was a clear trend of focusing on new projects and disregarding old ones, with older tokens losing their value.

However, with the AI Agent wave sparking a renewed interest in the crypto market, coupled with a recent resurgence of older tokens, both new and old projects have seen a massive uptick in participation, as people searched for more justifications for the price increases.

Given the current market environment, what kinds of projects should we focus on to seize more opportunities?

Market cycles and price fluctuations are the pulse of market activity, but survival through bull and bear markets hinges on demand fit—the key factor determining a project’s life or death. Having demand doesn’t necessarily guarantee skyrocketing prices, but lack of demand almost always leads to low liquidity or eventual zero value.

With this in mind, what other sectors, outside of our usual focus, still show strong demand?

One of the popular narratives today is that AI Agents require more and better data to become smarter. However, in reality, any Web3 project has an ongoing data-related demand, which is often not readily visible to the general public: data indexing.

Data indexing allows for the querying of disordered on-chain data, providing a foundation for project owners, developers, and even on-chain users to understand the project, its fundamentals, and all necessary analyses.

Every time a new crypto project emerges, there is a demand for data querying/indexing, and the more projects that launch, the higher the demand becomes.

In this field, the established project The Graph remains a strong contender, continuing to grow behind the scenes:

As of December last year, the project has been established for 4 years. So far, it has built more than 10,000 subgraphs, 100 indexers, 170,000 delegates and more than 800 curators, with user communities all over the world.

In the crypto world, where hot spots are fleeting, this kind of longevity is rare.

If an infrastructure is really needed, this is the lower limit for the project to survive. But where is the upper limit for The Graph? Can the token GRT break the curse of speculating on the new but not on the old?

If you don’t understand The Graph project and data indexing needs, and are trying to find more revenue possibilities in the current market environment, you might as well go deep into the sea of ​​on-chain data and explore an underwater world that is unknown to The Graph but is in high demand. Operation.

Data indexing requirements, perpetual motion machine under hot spot rotation

When analyzing a project, the ecological niche it is in is very important.

Where does The Graph fit into the current crypto ecosystem? In fact, you can think of the entire market as an ocean. There are two completely different situations above and below the water.

Due to the limited attention of people, it is easier to see the “bustling” on the water. Different projects appear and leave one after another, and PMF (product market fit) remains more in a slogan and exploited narrative.

But the author believes that the real PMF in the encryption market is not actually on the water.

Under water, no matter how the hot spots rotate, whether it is AI or Meme, the product that can be used by most projects is the best PMF at this stage; the ones that are easy to observe include Pump.fun and so on.

If trading is compared to the continuous warm current under the crypto sea, Pump.fun is naturally easy to understand; but at the other end, there is a demand that is not easy to observe and is deeper, but it is enough to support various projects on the water:Data index。

In layman’s terms, you may not need the data yourself, but whenever a new encryption project emerges, there will be a need for data query/indexing.

For example, an on-chain DEX needs to analyze its own transaction history and liquidity, and needs to check the data;

Another example is a Meme. It needs to check the Burn status of its own tokens and whether new tokens have been purchased during fee repurchase. It also needs to check the data…

You may not find the so-called rigid needs in the encryption market, but providing data services for projects is the most rigid need among rigid needs—-encryption projects must provide services to users (or at least appear to have services), and in any case they need to be based on on-chain data. , do data analysis, visualization and real-time monitoring related to your own business.

If there is a demand in the current encryption market, there are basically no projects to choose from, but it shows that the market is huge.

On the other hand, if everyone has a need for data indexing, instead of distinguishing whether the demander is a good person or a bad person (there will also be air projects), it is better to focus on the person who provides the shovel—-This is also a peculiar situation of The Graph in the current market environment. And realistic ecological niche.

This location and market is not easy to find, which is why you need to pay attention to projects like The Graph:

Providing data indexing for other projects is a practical, widespread and real-demand PMF in the current environment, only the project itself has the possibility to survive through the cycle;

From the perspective of the project side, if you were an encryption project, what would you think?

The data on the chain is messy and fragmented. If I want to analyze whether user A has transferred assets B to C, it is actually very difficult. It is too expensive for encryption projects to do it themselves, so they must have a service provider to give them a “shovel”.

So the question comes: Where does the data I want come from? How can I check it faster?

You need to step into The Grpah and see the details.

Understanding The Graph and Subgraphs: The “Electronic Catalog” of the Blockchain Library

In the Chinese-speaking world, there isn’t a lot of literature or research papers explaining The Graph in simple terms. On one hand, data indexing is primarily geared towards B2B services and feels distant from everyday users. On the other hand, the underlying technology often seems complex and harder to grasp amidst all the hype around it.

To help you understand The Graph better, we will use a simple analogy. Once you understand that data indexing is a necessity, it might change how you perceive the value of The Graph and its token investment potential.

The Library Analogy

Let’s imagine The Graph as a librarian. Various blockchain networks (Ethereum, Solana, etc.) are like the rooms of a gigantic library that contains vast amounts of information, such as transaction records, smart contract states, and more. But this is a very special library:

Books (data) are constantly being added.

There is no fixed catalog or indexing system.

To find specific information, you might have to go through thousands of books.

It’s like looking for a needle in a haystack—finding what you need is nearly impossible.

This is where The Graph comes in—like the librarian for this decentralized library. It keeps organizing and indexing all the new books (blockchain data) as they come in. It also builds a query system, similar to an electronic catalog in a library.

Whenever you need specific information, you simply tell The Graph what you’re looking for, and it quickly finds the relevant books and page numbers (i.e., the exact blockchain data you need). This means The Graph is essentially creating a comprehensive, easy-to-use, and well-organized electronic catalog for blockchain data across the entire crypto world.

Why This Matters

The benefit of this system is clear:

Developers and projects don’t have to build their own complex data indexing systems.

Users can quickly access the blockchain data they need.

It makes the process of building decentralized applications (DApps) much easier from the data perspective.

The Core Value: Data Indexing as a Necessity

Returning to the project value and narrative discussed earlier, The Graph’s long-term effect lies in the fact that whenever you need to look up something in the library (whether it’s for a real or speculative application), you’ll have to use The Graph. That’s the real reason why data indexing is a basic necessity. It’s not just a nice-to-have service—it’s fundamental for accessing blockchain data in an organized manner.

You might wonder: “What if I don’t want access to the whole library? I just want a particular set of books related to my interests?”

This is where The Graph’s key feature, the Subgraph, comes into play.

Subgraphs: Customized Data Indexing

Let’s say you’re particularly interested in the book “Decentralized Exchanges (DEX)”. You can create a subgraph dedicated to DEX. This subgraph would include, but not be limited to:

The specific smart contracts you want to index.

The events you want to track (e.g., trades, liquidity additions).

How the data should be organized and stored.

How the data can be queried.

If you have several interests, you can create multiple subgraphs, each tailored to different topics in the crypto world, making it easier for various applications to use these focused data sets.

In simpler terms, a subgraph is like a Dewey Decimal Classification for books in the library, where each category has a specific set of books under the same theme.

Or more popularly, sub-pictures are more like classification numbers in library management. One type corresponds to the bibliography of the same topic.

And these sub-pictures are still growing.

These subgraphs are continuously growing. According to Messari data, by the end of Q2 2024, over 7,370 subgraphs had been published to the decentralized network, a 278% increase from 1,952 subgraphs at the end of Q1 2024.

By Q3 2024, the number of active subgraphs continued to grow. As of January 2025, this number surpassed 10,000 subgraphs, showing a steady and impressive expansion. This growth highlights The Graph’s increasing importance in supporting decentralized applications at scale.

After understanding the concept, it will be easier to understand the advantages of The Graph.

Since multiple specific themes can create special directories, corresponding to the rigid needs of different encryption applications, at least two different things can be done:

• From blockchain raw data to creating subgraphs to build indexes for different topics
• Different projects use indexes through Graph’s API to provide data-based services for their respective businesses.

Decentralized Data Indexing Market

A new question arises: if the librarian controls the entire indexing and querying of on-chain data, why should you trust this librarian?

In fact, The Graph’s design ensures that the responsibility of “library management” is decentralized among different roles in the network, rather than being controlled by a single entity.

More specifically, indexers, delegators, curators, and developers together form a decentralized data indexing market.

1.Indexers

The most fundamental role is that of the indexers. They run nodes to process and index blockchain data. Indexers are the primary data processors in the network, responsible for the initial creation and maintenance of subgraph indexes.

The motivation for indexers to participate is that they can earn fees and rewards by staking GRT tokens (the project’s native token) and providing query services. This is similar to Ethereum or other Layer 1 (L1) validators: you need a certain scale to operate, but if you don’t have the required scale but still want to participate, there’s another role for you—delegators.

2.Delegators

Delegators, similar to liquidity staking, can delegate their GRT to an indexer, helping improve network security and efficiency without needing to run their own nodes. Economically, delegators can share in the rewards earned by the indexers they delegate to.

3.Curators

Next is the crucial role of curators. After indexers create thousands of subgraphs, how do we determine which ones are the best or most suitable for a given use case? Curators can step in to identify high-quality subgraphs and signal them.

Economically, curators can earn GRT rewards when the subgraphs they selected are widely used in the ecosystem.

4.Developers

Developers or independent researchers can use the data from subgraphs within The Graph, define the data structure they need to index, and build applications based on that data. They benefit from the ability to quickly and efficiently access blockchain data, significantly lowering development costs and complexity.

5.End Users

The ultimate users can be DApps, data analysts, or other entities needing blockchain data. They gain access to fast, reliable data services, which are critical for many applications.

A Decentralized, Multi-Participant Data Market

Overall, we can see that one part of the roles (indexers and curators) provides subgraphs and indexing services, while the other part (delegators, developers, and end users) consumes them. This creates a decentralized data market that is not controlled by any single entity, with multiple parties participating in the process.

Is This Market Actually Being Used?

What I find particularly interesting is whether such a market is genuinely being used. According to another report by Messari, by the end of Q2 last year, The Graph’s total revenue from query fees increased by 160% quarter-over-quarter, reaching an all-time high of $113,000.

Additionally, the demand for data reached historic highs, with over 2.9 billion queries, an 84% increase from the 1.6 billion queries in Q1 of 2024.

In Q3 of the same year, this number surged to more than 5.3 billion queries, a 79% increase from Q2.

As we move into the new year, although I don’t have more public data, it’s clear that better market conditions and additional narratives will generate more projects. The increased activity in the ecosystem will inevitably stimulate greater demand for data queries, which were already growing in the previous year.

This data market has real, essential demand, but it might not be from the retail clients we commonly think of. The market for data, which has not yet been widely mentioned or discovered, seems to suggest that even older projects can emerge as beneficiaries during the cyclical rotation of the market.

The Graph’s business is undeniably strong, supported by data-backed growth. But how will its token GRT perform? For regular users, what opportunities exist for participation?

GRT: A Steady Yield Beneficiary

First, the role of the GRT token in the previously discussed data market is to regulate and incentivize the behavior of market participants:

• Demand Side: Data consumers and DApp developers need to pay GRT to query the indexes, creating a continuous demand for the token.
• Supply Side: Indexers provide indexing services and receive GRT rewards. Curators and developers who discover or create high-quality subgraphs also earn GRT rewards.

For regular users, the most direct way to participate is by becoming a delegator—staking GRT to an indexer, enabling them to provide more indexing services (similar to staking ETH to nodes to maintain network security).

But the key question is: Is it worth staking GRT? We can analyze this from two perspectives: the external competitive environment and the project itself.

First, Let’s Look at the Competition

Given the opportunity cost of capital, you could also choose to stake your assets in DeFi protocols as liquidity providers (LPs).

However, from an industry-wide perspective, DeFi is already quite competitive. The ROI (Return on Investment) is either already discovered or easily discovered under promotional influences. Moreover, participating as an LP might result in losses due to impermanent loss and other factors.

On the other hand, staking in high FDV (Fully Diluted Valuation) and low-flow VC tokens might lead to a gradual decline in token prices due to different unlocking conditions. The staking rewards might not even offset the loss in the token’s value.

Staking in the data market, however, is in a less competitive space, with relatively fixed ROI. This makes it a more stable and predictable choice.

Next, Let’s Take a Look at the Rewards of Staking in The Graph

In general, the rewards for stakers depend on the indexers they choose, the amount of GRT they stake, and the overall activity and income of the network.

When developers or users query data from The Graph, they pay query fees. Indexers have the discretion to decide how much of the query fee they want to retain as their revenue. For example, an indexer might choose to retain 13.96% of the query fee as their income.

The remaining portion (100% - 13.96% = 86.04%) is distributed to the delegators.

Let’s consider an example:

• Suppose a total of 1,000 GRT is staked with this indexer, and you stake 100 GRT (which is 10% of the total staked).
• If a query costs 100 GRT, the total amount available to distribute to delegators is 86.04 GRT.
• As a delegator, you would receive 86.04 * 10% = 8.604 GRT.

This means that as long as the demand for indexing remains stable, the more you stake, the greater your proportion of rewards in GRT.

The Key Question: Will GRT Experience Significant Depreciation?

The issue then becomes whether GRT itself will experience substantial depreciation. We are not professional secondary market teams and cannot provide specific financial advice. However, there is an obvious advantage to GRT as an older project: It has full circulation with no unlock-related sell pressure.

Of course, GRT’s price is also subject to the broader crypto market cycle. But if we look at the past year, the token price has increased by 30% compared to the same time last year. Additionally, upon reviewing on-chain data and correlations, we see little evidence of active market-making or manipulation.

Therefore, if you’re only considering staking for steady yield, and assuming the GRT token’s supply increases while its price experiences stable growth, it could still be an attractive choice.

Although it is not as high as Meme and other excess returns, the risk is relatively small and the growth rate is steady. The situation in PVP is not that serious.

The Future

Looking ahead, does The Graph have more catalysts and events in store to capture the market’s attention?

What we currently see is that the project has expanded beyond its original role as an indexing service and is now making more strides in the AI space.

For instance, the essence of indexing services is to make on-chain data more accessible, which is increasingly resembling the foundational infrastructure for AI services, providing critical support for the recently popular AI agents.

Additionally, The Graph is exploring the possibility of hosting AI models within its network. You can upload requested models to selected indexers, perform inferences, and return the results to the gateway. The Graph can also charge service fees for this process, creating a stable business model.

On a more intuitive level, the project is also developing AI agent products similar to a crypto version of ChatGPT, built on top of The Graph’s indexed data from decentralized exchanges (DEXs). For example, you could directly ask which DEX had the highest trading volume over the past seven days, and the system would query the index to return the results.

One advantage of this approach is that, unlike newer AI agent projects, The Graph is essentially taking an “index first, AI second” approach.

This strategy allows it to leverage current market trends while maintaining a strong baseline for data indexing services, ensuring the project’s long-term sustainability. It’s a pragmatic and steady approach to Product-Market Fit (PMF) for crypto products at this stage.

Right now, PMF is less about breaking into new circles or grand ideals. Providing data indexing services for all crypto projects is in itself a practical and sustainable form of PMF. Products with real demand deserve a place in the market, and focusing on such products and their growth is a solid path for securing reliable returns.

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