Enzyme vault managers can now delegate to The Graph indexers for rewards

Author: Enzyme

Compiled by: ChainCatcher

We are excited to announce that Enzyme vault managers holding The Graph token ($GRT) can now delegate to one or more indexers on The Graph to earn rewards.

By delegating GRT tokens, Enzyme asset managers will receive a portion of the indexing rewards and query fees generated by the indexers. This is a simple and seamless way to support The Graph's network and earn rewards without having to run a node yourself.

The Graph is a decentralized protocol for indexing and querying blockchain data. Anyone can build and publish open APIs, called subgraphs, making it possible to query data that is difficult to access directly.

Blockchain attributes such as finality, chain reorganization, or uncle blocks further complicate this process, making it not only time-consuming but also conceptually challenging to retrieve the correct query results from blockchain data.

The Graph addresses this issue using a decentralized protocol that indexes and supports high-performance and efficient queries of blockchain data. These APIs (subgraphs) can then be queried using a standard GraphQL API. Today, there is a hosted service and a decentralized protocol with the same functionality, both supported by an open-source implementation of Graph Node.

Indexers are node operators in The Graph Network that hold Graph Tokens (GRT) to provide indexing and query processing services. Indexers earn query fees and indexing rewards for their services. They also earn from a rebate pool shared with all network contributors based on a Cobb-Douglas rebate function, proportional to their work.

Staked GRT in the protocol has a cooldown period, and if an indexer is malicious and provides incorrect data to applications or indexes incorrectly, they may be slashed. Indexers can also earn rewards from delegated stakes from delegators, contributing to the network.

Indexers choose which subgraphs to index based on curation signals, where curators stake GRT to indicate which subgraphs are of high quality and should be prioritized. Consumers (e.g., applications) can also set parameters for indexers to handle their subgraph queries and set preferences for query fee pricing.

The indexing rewards of The Graph come from 3% of the protocol's annual issuance. They are distributed by the protocol based on the proportion of all curation signals on each subgraph and then proportionally distributed to indexers based on their allocated shares in that subgraph. The distribution must end with a valid Proof of Indexing (POI) that meets the standards set forth in the arbitration charter to qualify for rewards.

Delegators are network participants who delegate GRT to one or more indexers. Delegators contribute to securing the network without running their own Graph nodes, as indexers use these delegated tokens to process data on the network and pass it to end-users and applications.

By delegating to indexers, delegators can earn a portion of the indexing rewards and query fees from the indexers. The volume of queries that an indexer can handle depends on the indexer's own (and delegated) stake and the price charged for each query; thus, the more stake allocated to the indexer, the more potential queries they can handle.

With this new feature, Enzyme vault managers can now seamlessly delegate GRT to any indexer of their choice. To get started, simply follow these steps.

You will need to know the indexer address to which you want to delegate GRT. Therefore, you should explore indexers by clicking "Explore Indexers." This will take you to a list of indexers showing their own fees and rewards; please do your own research (DYOR) before selecting an indexer.

In the left vault menu, navigate to "DeFi Protocols" and select The Graph. Click "Delegate." Enter the amount of GRT you wish to delegate and paste the indexer address you want. Finally, click "Delegate" and confirm the transaction.

Once you have delegated to one or more indexers, you will be able to see your current delegation position. These can be managed at any time by toggling "Actions" on the right side of the screen.

In the left vault menu, navigate to "DeFi Protocols" and select The Graph. To the left of your delegation position, click the three dots and select "Undelegate." Enter the amount of GRT you wish to undelegate, then click the "Undelegate" button.

Tip 1: Undelegated tokens have a 28-day cooldown period, meaning you cannot transfer your tokens or earn any rewards from these tokens for 28 days.

Tip 2: If you undelegate while you currently have a certain amount of GRT undelegated, the cooldown period will reset, and the entire amount of GRT will need to undergo a 28-day cooldown. For example, if you undelegate 10 GRT today (28-day cooldown period). However, next week, you decide to undelegate another 5 GRT. This gives you a total of 15 undelegated GRT, and from the moment of your last undelegation action, the new cooldown period will be 28 days.

Tip 3: If you undelegate GRT while it is already unlocked, the unlocked GRT will be withdrawn to the vault.

Once your GRT has completed the 28-day cooldown period, you can withdraw GRT. To do this, navigate to the left vault menu, go to "DeFi Protocols," and select The Graph.

Next, click the three dots to the left of your delegation position, then select "Withdraw." Enter the amount of GRT you wish to withdraw, click "Withdraw," and confirm the transaction.

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At Avantgarde, we help a range of clients launch their own DeFi strategies on Enzyme. Here is a brief summary of how we provide assistance: