Blockchain data startup The Graph has raised $5 million in a token sale with Framework Ventures, Coinbase Ventures, CoinDesk parent Digital Currency Group, Multicoin Capital, DTC Capital and others.
His startup created an indexing protocol for organizing blockchain data so people can access it. People use The Graphâs open-source software to search for specific Ethereum data, the same way we search Google for a recipe, sometimes instead of running their own Ethereum node.
Uniswap co-founder Hayden Adams said a considerable portion of the DEX ecosystem is reliant on nodes operated by Infura, the ConsenSys-owned API provider. Likewise, The Graph offers another tool for companies that want to offer Ethereum-related services regardless of direct participation in the blockchain network.Â
âWe use [The Graph] for Uniswap.info, our analytics site,â Adams said. âAs a company we donât manage or run our own databases. â¦ Right now itâs pretty difficult to get historic data from the Ethereum blockchain in an efficient way.âÂ
Since The Graph freely provides open-source software, and isnât promising prompt revenue, any investment in its tokens may be a signal the investor is bullish on Ethereum applications.Â
âWe havenât shared the token distribution yet,â Tal said when asked about the token sale and strategy.
Instead, he said his startupâs staff of 17 is âtaking a similar path as Compound,â the decentralized finance (DeFi) startup that also attracted investment from Coinbase and recently inspired the âyield farmingâ craze with the issuance of its COMP governance tokens.
Tal said Compoundâs model looks like âa really good route, in generalâ for a crypto startup.
âWeâll expand to other blockchains soon,â Tal said.
In a press release, investor Michael Anderson of Framework Ventures said the firm âcouldnât be happier to back Yaniv and the team, and we look forward to helping grow the decentralized network when it launches.âÂ
Andersonâs firm is also invested in the price feed provider Chainlink, indicating the firm may be betting on the growth of Ethereum-based services. DTC Capital investor Spencer Noon said he doesnât expect most users to interact with The Graph token.Â
âTheyâll pay for this service with dai or ether, a more liquid token,â Noon said, explaining how The Graph could follow the 0x model where many service providers offer paid access to the open-source software. Such index providers would use the token on the backend.
A spokesperson for The Graph said the startup uses an âexternal node provider,â declining to specify which, and that in the future other indexers will choose whether to rely on such providers or run Ethereum nodes themselves.Â
âTheir plan is to decentralize their protocol and make it community-owned and -operated,â Noon said of Talâs team. âI look at [The Graph] as the first of many middleware options in the space. â¦ They are now processing 45 million queries per day. Thatâs product-market-fit.âÂ
As for Tal, he said although token sales âgot a bad name in 2017,â he thinks 2020 will be a fruitful year for the Ethereum ecosystem.Â
âItâs encouraging to see this next wave of projects are finally solving real problems and finding product-market fit,â Tal said.Â
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