Overview
Indexer incentives .
The Indexers active in The Graph Network are incentiviced to provide their services through indexing rewards, query fee rebates and distributions from the rebate pool. Let’s have a detailed look at the three revenue sources on Indexers.
The Three Revenue Streams of Indexers.
The Three Revenue Streams of Indexers
How exactly are these revenues generated and how are they distributed?
Revenue stream #1
Indexing Rewards.
The rewards for indexing subgraph deployments in The Graph Network are generated by a protocol-wide inflation that is set to 3% annually. The indexing rewards constitute an incentive for Indexers to index the contents of subgraphs. Distribution of indexing rewards ensues proportionally to the amount of indexing work of an Indexer on a subgraph.
Revenue stream #2
Query Fee Rebates.
Indexers serve queries for indexed data from data consumers. Typically, these consumers are end-users, developers and applications. In order to query data, consumers pay query fees to Indexers based on the metered usage.
Indexers can utilize different pricing strategies to attract data consumers and are free to set their pricing models independently. Similarly, data consumers can set their preference for query fee pricing. Additionally, consumers can define parameters for the query processing of Indexers.
State channels mediate the payments between an Indexer and a gateway. Included in each query request originating from a gateway is an associated proof of query result validity.
Revenue stream #3
Rebate Pool.
All participants of The Graph Network are rewarded from a Rebate Pool based on their contributions to the network. The creation of the Rebate Pool follows the Cobb–Douglas Production Function and a fixed portion of query fees are contributed to it. Intended outcome of the Rebate Pool is to encourage Indexers to stake GRT tokens in approximate proportion to earned query fees in the network.
Contributions to the Rebate Pool are calculated by means of the Cobb–Douglas Production Function. Consequently, the resulting stake is allocated on the particular subgraphs for which the query fees were generated.
Indexing Reward Cut and Query Fee Cut.
Indexers in The Graph Network define the costs for their services by deciding upon the indexing reward cut and the query fee cut. The total amount of generated GRT is distributed among the Indexer and their Delegators based on the defined percentages.
