Blue poker chips carry the highest value at the table, and the term migrated to the investment arena. Only the best companies acquire Blue Chip status. These companies are often either large conglomerates, or ranked in the top tier of their specific market. Berkshire Hathaway, Johnson & Johnson, and Coca-Cola are some examples from the US. Blue chip status is reserved for companies that are well-known in their markets, well-established in their field, and well-capitalized on their balance sheet.
Let’s view The Graph through those lenses and see how it stacks up in the Web3 universe.
This can be defined as the level of customer awareness. The Graph is not a front-of-house product. It’s not the flashy graphic that catches your eye. The Graph isn’t the frosting on the cake; it’s the plate on which the cake is served. The Graph is the protocol running in the background, chewing up data and spitting it back out in a usable format.
The Graph is geared towards developers. Its target audience are the devs pounding away at their keyboards, looking for a way to compress their timeline and speed up their project.
When you look at what projects and protocols are experiencing the most activity, you’ll find The Graph close to the top. Web3 developers know its name.
Within the nascent Web3 environment, The Graph is an old soul. The project originated in late 2018 to facilitate the rapid movement of accurate, digestible data from the blockchain to the DApp. Before The Graph, developers were forced to create their own unique back-end data-processing systems for each DApp. The Graph has established a robust and resilient protocol which is the standard utilized across the Web3 landscape. You can find The Graph in a myriad of applications ranging from Livepeer(video transcoding) to Uniswap(market and liquidity creator), as well as applications in the DeFi and governance spaces.
Within traditional investment spaces, the “Blue Chip” designation carries an aspect of being “recession-proof.” Blue chip companies are either large enough to withstand a prolonged period of market or economic instability, or diversified enough to mitigate risks associated with targeted market segments. They can ride out the bad times because they don’t rely on one specific sector of the market.
Within Web3, we find very few projects that meet this criteria. Most projects are either targeted at a specific market or are limited to a specific blockchain environment. There are very few decentralized, blockchain-agnostic, infrastructure level projects and protocols, and that number shrinks even more when you add “Operational” to the mix.
In developing market sectors, the first-mover advantage carries enormous weight. This is especially true with technology, because foundational components of the software stack are more difficult to alter once they are engrained in the process. The Graph is positioned as the de facto querying layer within Web3.
The Graph does not have traditional organizational structure, and as such does not have traditional financials. The Graph protocol was intended to eventually belong to the various participants in the network, and is not structured to carry any debt.
Many traditional startups either borrow money from an institution, or obtain capital from venture firms in exchange for a portion of future revenue. Both of these avenues require sufficient cash-flow to make payments and meet the revenue obligations. Blue chip companies have moved past the initial funding obligations and are able to focus on growth and consolidation instead of merely striving for survival.
The Graph raised the funding necessary for their early steps by selling blocks of the GRT utility token. These early backers have the option of selling their tokens once they have vested, but most have chosen to stake their tokens within the network, continue accruing rewards, and increasing their rate of return.
Because of their chosen funding avenue The Graph does not face the cash-flow issues that plague start-ups, and neither are they forced to meet specific revenue targets. This allows them to focus on organic, sustainable development and growth.
In summary, The Graph is top-of-mind to its intended users, solidly positioned within the Web3 environment, and on a firm financial foundation.