Development of Web3 Data Access: Analysis of Indexers and Related Projects

Data is the core of blockchain technology and the foundation for developing decentralized applications ( dApp ). While most discussions currently focus on data availability ( DA ), which ensures that every network participant can access the latest transaction data for verification, the equally important aspect of data accessibility is often overlooked.

In the era of modular blockchain, DA solutions have become an indispensable component. These solutions ensure that all participants can access transaction data, thereby enabling real-time verification and maintaining the integrity of the network. However, the function of the DA layer resembles more of a bulletin board rather than a database. This means that data will not be stored indefinitely, but will be deleted over time, just as posters on a bulletin board are eventually replaced by new ones.

In contrast, data accessibility focuses on the ability to retrieve historical data, which is crucial for developing dApps and performing blockchain analysis. This aspect is particularly critical for tasks that require access to past data to ensure accurate representation and execution. Although discussions around data accessibility are less common, it is equally important as data availability. Both play different yet complementary roles in the blockchain ecosystem, and a comprehensive data management approach must address both issues simultaneously to support robust and efficient blockchain applications.

Early Methods of Blockchain Data Retrieval

Since its inception, blockchain has fundamentally transformed infrastructure and driven the creation of decentralized applications (dApps) in areas such as gaming, finance, and social networks. However, building these dApps requires access to a large amount of blockchain data, which is both difficult and costly.

For dApp developers, one option is to host and run their own archival RPC nodes. These nodes store all historical blockchain data from the beginning, allowing full access to the data. However, the cost of maintaining archival nodes is high, and their querying capabilities are limited, making it impossible to query data in the format developers need. While running cheaper nodes is an option, these nodes have limited data retrieval capabilities, which may hinder the operation of the dApp.

Another method is to use commercial RPC node providers. These providers are responsible for the costs and management of the nodes and provide data through RPC endpoints. Public RPC endpoints are free but come with rate limits that can negatively impact the user experience of dApps. Private RPC endpoints offer better performance by reducing congestion, but even simple data retrieval requires a lot of back-and-forth communication. This makes them request-heavy and inefficient for complex data queries. Additionally, private RPC endpoints are often difficult to scale and lack compatibility across different networks.

Better Solutions: Blockchain Indexer

Blockchain indexers play a key role in organizing chain data and sending it to databases for easy querying, which is why they are often referred to as "the search engines of blockchain." They work by indexing blockchain data and making it available at any time using APIs like GraphQL with a SQL-like query language (. By providing a unified interface for querying data, indexers allow developers to quickly and accurately retrieve the information they need using standardized query languages, greatly simplifying the process.

Different types of indexers optimize data retrieval in various ways:

1. Full Node Indexers: These indexers run full blockchain nodes and directly extract data, ensuring data completeness and accuracy, but require substantial storage and processing power.

2. Lightweight Indexers: These indexers rely on full nodes to retrieve specific data as needed, thereby reducing storage requirements but potentially increasing query time.

3. Specialized Indexers: These indexers are specifically designed for certain types of data or specific blockchains, optimizing retrieval for particular use cases, such as NFT data or DeFi transactions.

4. Aggregation Indexers: These indexers extract data from multiple blockchains and sources, including off-chain information, providing a unified query interface, which is especially useful for multi-chain dApps.

Ethereum alone requires 3TB of storage space, and as the blockchain continues to grow, the data storage capacity of Erigon archive nodes will also continue to increase. The indexer protocol deploys multiple indexers that can efficiently index and query large amounts of data at high speed, which RPC cannot achieve.

Indexers also allow for complex queries, easy filtering of data based on different criteria, and extraction for subsequent data analysis. Some indexers also allow for the aggregation of data from multiple sources, thereby avoiding the deployment of multiple APIs in multi-chain dApps. By being distributed across multiple nodes, indexers provide enhanced security and performance, whereas RPC providers may experience interruptions and downtime due to their centralized nature.

Overall, compared to RPC node providers, indexers improve the efficiency and reliability of data retrieval while also reducing the cost of deploying a single node. This makes blockchain indexer protocols the preferred choice for dApp developers.

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Application Scenarios of Indexers

As mentioned earlier, building a dApp requires retrieving and reading blockchain data to operate its services. This includes any type of dApp, including DeFi, NFT platforms, games, and even social networks, as these platforms need to read data first before executing other transactions.

) DeFi

DeFi protocols require different information to quote users specific prices, rates, fees, etc. The automated market maker (AMM) needs price and liquidity information about certain liquidity pools to calculate swap rates, while lending protocols need utilization rates to determine borrowing rates and the liquidation debt ratio. It is essential to input information into their dApp before calculating the rates executed by users.

game

GameFi requires fast indexing and access to data to ensure users can play games smoothly. Only through lightning-fast data retrieval and execution can Web3 games compete with Web2 games in terms of performance, thus attracting more users. These games need data such as land ownership, in-game token balances, and in-game operations. By using indexers, they can better ensure a stable data flow and stable uptime, ensuring a perfect gaming experience.

( NFT

NFT markets and lending platforms need to index data to access various information, such as NFT metadata, ownership and transfer data, royalty information, etc. Quickly indexing such data can avoid browsing through each NFT individually to find ownership or NFT attribute data.

Whether it is the DeFi automated market maker )AMM### that requires price and liquidity information, or the SocialFi application that needs to update new user posts, being able to quickly retrieve data is crucial for the normal operation of dApps. With the help of indexers, they can efficiently and accurately retrieve data, thereby providing a smooth user experience.

analysis

The indexer provides a method to extract specific data from the raw blockchain data (, including smart contract events in each block ). This offers opportunities for more specific data analysis, thereby providing comprehensive insights.

For example, perpetual trading protocols can identify which tokens have high trading volumes and which tokens incur fees, thereby deciding whether to list these tokens as perpetual contracts on their platform. DEX developers can create dashboards for their products to gain deeper insights into which liquidity pools offer the highest returns or the strongest liquidity. They can also create public dashboards that allow developers to freely and flexibly query any type of data they want to display on the charts.

Due to the availability of multiple blockchain indexers, identifying the differences between index protocols is crucial to ensure that developers choose the indexer that best suits their needs.

Overview of Blockchain Indexers

The Graph

The Graph is the first indexing protocol launched on Ethereum, allowing easy querying of previously inaccessible transaction data. It uses subgraphs to define and filter subsets of data collected from the blockchain, such as all transactions related to a certain DEX USDC/ETH pool.

Using index proof, indexers stake the native token GRT for indexing and query services, and delegators can choose to stake their tokens here. Curators can access high-quality subgraphs to help indexers determine which subgraphs to curate data for to earn the best query fees. In the process of transitioning to greater decentralization, The Graph will eventually stop its hosting services and require subgraphs to upgrade to its network, while providing upgrade indexers.

Its infrastructure brings the average cost per million queries to $40, which is much lower than the cost of self-hosted nodes. By using file data sources, it also supports parallel indexing of both on-chain and off-chain data for efficient data retrieval.

The rewards for The Graph's indexers have been steadily increasing over the past few quarters. This is partly due to the increase in query volume, but also attributed to the rise in token prices, as they plan to integrate AI-assisted queries in the future.

( Subsquid

Subsquid is a peer-to-peer, horizontally scalable decentralized data lake that efficiently aggregates large amounts of on-chain and off-chain data, protected by zero-knowledge proofs. As a decentralized worker network, each node is responsible for storing data from specific subsets of blocks, accelerating the data retrieval process by quickly identifying the nodes that hold the required data.

Subsquid also supports real-time indexing, allowing it to be indexed before the block is finalized. It also supports storing data in formats chosen by developers, facilitating easier analysis with tools such as BigQuery, Parquet, or CSV. Additionally, subgraphs can be deployed on the Subsquid network without having to migrate to the Squid SDK, enabling no-code deployment.

Although still in the testnet phase, Subsquid has achieved impressive statistics, with over 80,000 testnet users, deployed over 60,000 Squid indexers, and more than 20,000 verified developers on the network. Recently, on June 3rd, Subsquid launched the mainnet of its data lake.

In addition to indexing, the Subsquid Network data lake can also replace RPC in use cases such as analysis, ZK/TEE co-processors, AI agents, and Oracles.

) SubQuery

SubQuery is a decentralized middleware infrastructure network that provides RPC and indexing data services. It originally supported Polkadot and Substrate networks, and has now expanded to include over 200 chains. Its operation is similar to The Graph, which uses indexed proofs—indexers index data and provide query requests, while delegators stake their shares to the indexers. However, it introduces consumers to submit purchase orders to indicate that the indexers' income is guaranteed, rather than relying on managers.

It will introduce SubQuery data nodes that support sharding to prevent constant synchronization of new data between each node, thereby optimizing query efficiency and moving towards greater decentralization. Users can choose to pay a computational fee of about 1 SQT token for every 1000 requests, or set custom fees for indexers through the protocol.

Although SubQuery only launched its token earlier this year, the issuance rewards for nodes and delegators have also increased in USD value month-on-month, which represents a continuous increase in the number of query services offered on its platform. Since the TGE, the total amount of staked SQT has increased from 6 million to 125 million, highlighting the growth of its network participation.

Covalent

Covalent is a decentralized indexing network created by blockchain sample producers ###BSP### network nodes through the bulk export method, which generates copies of blockchain data and publishes proofs on the Covalent L1 blockchain. This data is then refined by block result producers ###BRP( nodes according to established rules to filter out the data that meets the requirements.

Through a unified API, developers can easily extract relevant blockchain data in a consistent request and response format, without the need to write custom complex queries to access the data. The CQT token, settled on Moonbeam, can be used as a payment method to retrieve these pre-configured datasets from network operators.

The rewards from Covalent seem to show an overall upward trend from the first quarter of 2023 to the first quarter of 2024, partly due to the rise in the price of Covalent token CQT.

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Considerations for Choosing an Indexer

) Customizability of Data

Some indexers (, such as Covalent ), are universal indexers that only provide access to...