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Learn more about Curation Shares.

As we have learned in the Introduction to Bonding Curves, the function of a token bonding curve can be used as cryptoeconomic primitive to coordinate the work of network participants so that shared goals can be accomplished.

Curation-Shares

What are Curation Shares?

Curation shares are the continuous tokens The Graph uses to incentivize curators towards the shared goal of identifying quality data sources. The curation shares are managed by The Graph’s bonding curve contract.

These are the properties of The Graph’s curation shares

Limitless

The supply of curation shares is limitless. There’s no hard limit to the number of shares that curators can mint

Deterministic

The utilization of a bonding curve facilitates a predetermined and fixed price discovery mechanism for the curation shares

Continuous

The smart contract continuously determines the price depending on the purchase and sale of curation shares

Liquidity

The bonding curve acts as automated market maker, which allows curators to buy or sell curation shares instantly and at any time.

Curation in The Graph Network.

The Graph Network uses curation markets to reduce information asymmetries about the quality of subgraphs as data sources. Curators help Indexers by signaling which subgraphs are of a high quality and should be indexed accordingly.

The Graph Network uses a bonding curve to coordinate the work of curators to achieve the shared goal of indexing the contents of quality subgraphs. Curators are incentivized in an economic game to identify high-quality subgraphs with attractive earning potentials and try signal on these subgraphs early on.

The Graph’s Bancor bonding curve

To accomplish the goal of incentivizing Curators towards the shared goal, The Graph uses a Bancor bonding curve for curation. Instead of issuing tokens, the bonding curve of The Graph Network issues curation shares. As a curator, you can buy (i.e. “mint”) or sell (i.e. “burn”) the curation shares of a particular subgraph in order to signal on it or unsignal it.

The curation shares of The Graph Network are managed by bonding curve contracts. These smart contracts continuously calculate the price of the curation shares depending on the share supply.

The supply of the curation shares of a subgraph determine their price. The price for curation shares increase when the number of distributed shares increase and vice versa.

Inherent Risks.

Curators that are able to signal on a quality subgraph with an attractive earnings potential early on receive a greater share of the subgraph’s generated query fees.

The value of curation shares of early curators increase proportionally to an increase of share supply. This means that an early curator benefits from an increasing share value if other curators start signaling on the subgraph.

However, curation is not without risks:

Curators mint curation shares on a bonding curve. With this comes the risk that the value of curation decreases when other curators sell their shares. If this happens, a Curator will receive less GRT back than they initially deposited into the bonding curve to mint curation shares.

Number of curation shares increases after Curator minted their own shares

Value of curation shares increases proportionally to the increase supply

Number of curation shares decreases after Curator minted their own shares

Value of curation shares decreases proportionally to the decrease supply

Summary

Curation shares are used by The Graph to incentivize curators towards the shared goal of identifying quality data sources. Bonding curve contracts are responsible for determining the share price

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