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Graph Protocol Unveiled Layer 2 Solution For Ethereum: Report

10/09/2020

Graph protocol by Graph Network is already used by Defi giants like Aragon and Uniswap and is designed similarly to the Lightning Network which will operate using state channels. In our latest ethereum news, we find out more about the solution.

The Graph protocol will leverage incentivized nods called Indexers and will rely on them to ensure secure decentralized operation. The Graph announced that they will bring a new open-source Layer 2 solution to their mainnet protocol after they get the audit from Consensys Diligence. The solution was developed via a partnership with Connext, State channels, and Consensys Mesh R&D. They believe to have created a modern peer-to-peer micropayment protocol that will help scale Ethereum to thousands of transactions in a second. The ETH foundation played a huge part in auditing the protocol’s implementation.

The solution is based on the state channels which is a technology concept that is used by Bitcoin’s Lightning Network and Ethereum’s Raiden but unlike the regular crypto payments, state channels enable participants with faster and cheap off-chain transactions with all of the benefits of an on-chain implementation. The network leverages node operators named “Indexers” who are incentivized to provide the best results for the lowest prices. Users can tap Indexers to interact with the Graph network for transactions, attestation, and micropayments. They can also receive rewards for their efforts in running the software and optimizing the database.

With the ETH ecosystem looking for an effective layer 2 solutions, the Graph Protocol could be a real solution on the market. some of the biggest Defi players already use it like Balancer, Aragon, and Uniswap. Gas volatility is causing major pressure on users and decentralized protocols to create a solution for the declining usability of ETH so the ecosystem is left behind torn between waiting for ETH 2.0 or the swift implementation of General Layer 2 solutions like Raiden and ZKrollups.

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As recently reported, The Ethereum optimistic rollup solution released a limited testnet version of the Layer2 solution and apart from the ZK rollups, this one is the new leading solution for smart contract scalability on ETH. Synthetix Network was the first Defi project to join the testnet and others such as Chainlink and Uniswap followed closely behind.