The Graph Starts Migrating its Settlement Layer to Arbitrum from Ethereum

The Graph – a decentralized protocol for indexing and querying blockchain data – began migrating on Wednesday from Ethereum to the layer 2 scaling solution Arbitrum.

With the migration, The Graph becomes one of the largest Ethereum apps to transition to a layer 2 rollup – a move that Graph developers Edge & Node say will decrease barriers of entry for The Graph’s participants without compromising on security.

The Graph, through its web of “delegators” and “indexers,” allows web3 developers to view blockchain data without trusting centralized intermediaries for the data’s accuracy. Launched initially on Ethereum, its move to layer 2 platform Arbitrum is an effort to decrease gas costs and increase transaction speeds, according to Edge & Node CEO Tegan Kline.

Arbitrum, like other Ethereum layer 2 networks, operates as a separate blockchain that runs alongside Ethereum. To reduce fees for users without losing all of Ethereum’s security guarantees, Arbitrum bundles up large groups of transactions and then passes them back down to Ethereum for all-at-once settlement.

The Graph’s migration involves transferring its “settlement layer” from one network to another – rather than recording and settling activity directly on Ethereum, The Graph will now settle transactions on Arbitrum.

Every time a user performs a transaction on The Graph like delegating and indexing, there is a cost to it. “With this transfer to Artbitrum, those costs are lower. So we expect that there will likely be more indexers that spin up on the network [and] more delegators that get involved because that barrier to entry is lower, the cost isn’t so high,” Kline told CoinDesk.

GRT and ARB, the native tokens for The Graph and Arbitrum, have both remained stable in the past 24 hours amid The Graph’s transition to Arbitrum. GRT has ranged between as high as 99 cents and as low as 97 cents, while ARB has oscillated between 97 cents and $1.01, per CoinDesk data.

The Graph enables developers to query data from 40 networks and raised $50 million in a 2022 funding round, which saw participation from Tiger Global, Blockwall Digital, Fenbushi Capital, FinTech Collective and Reciprocal Ventures.