ERC-20 and The Graph Tokens

Oksana Kusik
4 min readOct 29, 2020


Author — Oksana#2939

Etherium is the technical basis for almost everything in the crypto market today. Since its invention, almost everyone was able to bring something new to the industry thanks to simplified tokens ERC-20. But how do they really work? Today we have prepared a series of most frequently asked questions on ERC-20.

What is the ERC-20 token?

ERC-20 tokens are designed specifically for the Ethereum platform. They all follow a standard list of functions, so they can be transferred, stored, and exchanged for other tokens in the Ethereum ecosystem. The developers of Ethereum have created these standards with three optional parameters and six mandatory ones.

What is Ethereum?

Etherium is a decentralized computer network with two main functions.

These functions include the blockchain itself to record transactions and a virtual machine to execute smart contracts.

In this way, Etherium can support the execution of decentralized applications (DApps). DApps are based on Etherium and can use Etherium system resources. The process is not free; developers pay for the use of platform resources with ETH coins, the ecosystem’s own currency.

Depending on the intended use, DApps will create ERC-20 tokens that can function as currencies, company shares, loyalty points, or even proof of ownership.

What does this have to do with smart contracts?

Smart contracts are used to create ERC-20 tokens. They are also created for token transactions and records of the balance of the wallet. Smart contracts are written in Solidity language, which follows the logic “if there is one” (IFTTT, IFTTT). Imagine a vending machine.

What happens after a smart contract creates a token?

From now on, the ERC-20 comes into play. Once a token is created, it can be exchanged, spent, or given to someone else. ERC-20 is a universal language in the Etherium ecosystem, which allows you to exchange one token for another.

Are there any real examples of using ERC-20?

There are enough of them. Each token based on Etherium is created according to ERC-20 standard.

According to the Etherscan service, more than 139,000 different tokens have been created so far. This number keeps growing day by day. For example…

The Graph and GRT (ERC-20 tokens)

The Graph, or Graph protocol, had launched its ERC-20 token, a GRT token for non-US users.

Indexing block data is difficult. Blockchain properties such as finality, chain reorganization, or unidentified blocks further complicate the process and make it not only labor-intensive but also conceptually difficult to extract the correct query results from chain data.

The Graph is helping other companies find the token data. And now they are selling GRT tokens in anticipation of the launch of their network. Buyers are helping to index and manage the data and secure the network.

The Graph is currently used by various Web 3.0 applications. The company is building “a decentralized network of curators, indexers, and delegates working together to organize global data, maintain apps, and accelerate the transition to a decentralized internet”.

To ensure the economic security of the Graph network and the integrity of the data requested, members use GRT (Graph tokens).

In this way, the token sales will distribute the ERC-20 token to these types of users:

• Indexers that manage the network, nod, and place tokens so that they can receive rewards and fees when consumers make a request.

• Curators that decide what of ETH data to index and store the data by paying the OTH and earning a fee for requests.

• Delegates who want to ensure network security without having to start a node.

Of course, not everyone will receive a GRT token, as consumers pay a fee for the request to obtain the data they are looking for.

Working token model

Curators, indexers, and delegates can receive income from the network that is equal to the amount of their work and their share of the GRT. The total amount of tokens at the start is 10 billion, and the production of new tokens in the form of indexation fees will start at 3% annually and will depend on the future independent technical management. Additional information on token distribution and technical management will be issued as the network approaches the launch.


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Oksana Kusik

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