One of the most frequently asked question in our Graphtronauts telegram group is regarding…
“There will be a huge token release in June that will increase supply and therefore the price of GRT will dump.”Statement often made by a minority of the community
This subject has been covered many times in the group before.
Firstly, these tokens are not just being released onto the open market, they are already owned, let that sink in, did the people spouting explain that one key point, the TOKENS BEING RELEASED ARE ALREADY OWNED.
Let’s just emphasize that point again.
TOKENS BEING RELEASED ARE ALREADY OWNED
Secondly, everyone knows at what point the release schedule is, all those who see the potential of the project will have in anticipation of any price contraction have set their buy orders accordingly. However, if you understand point one above then you understand that not all of the tokens being released are not going to end up on the market.
Thirdly, with The Graph being a key crypto infrastructure project, institutional investors will also be fully aware of the release schedule and have, if not already taken their full position, will potentially have set their buy orders to coincide with the release schedule.
It was always planned to work like this
Token are released daily already in the form of indexer rewards, currently amounting to about 3% of the total token supply annually.
At launch the full supply of 10 billion tokens were already released, it was not however all in circulation.
Over the next 2 – 5 years, a number of “token unlocks” will occur.
The biggest one’s this year are:
|Date||Unlock amount||Total unlocked|
|19 Mar 2021 00:30:00 GMT||13,009,375 (0.13%)||13,009,375 (0.13%)|
|17 Jun 2021 17:00:00 GMT||1,168,574,298 (11.62%)||1,181,583,673 (11.75%)|
|18 Jun 2021 08:00:00 GMT||13,009,375 (0.13%)||1,194,593,048 (11.88%)|
|24 Jul 2021 17:00:00 GMT||1,728,758,333 (17.14%)||2,928,351,381 (29.07%)|
|24 Aug 2021 03:30:00 GMT||41,125,000 (0.41%)||2,964,476,381 (29.48%)|
|17 Sep 2021 15:30:00 GMT||13,009,375 (0.13%)||2,977,485,756 (29.61%)|
|23 Sep 2021 14:00:00 GMT||41,125,000 (0.41%)||3,018,610,756 (30.02%)|
|24 Oct 2021 00:30:00 GMT||41,125,000 (0.41%)||3,059,735,756 (30.43%)|
|23 Nov 2021 11:00:00 GMT||41,125,000 (0.41%)||3,100,860,756 (30.84%)|
|17 Dec 2021 17:00:00 GMT||498,846,153 (4.96%)||3,599,706,909 (35.80%)|
|17 Dec 2021 23:00:00 GMT||13,009,375 (0.13%)||3,612,716,284 (35.93%)|
|23 Dec 2021 21:30:00 GMT||41,125,000 (0.41%)||3,653,841,284 (36.34%)|
Who are these GRTs getting unlocked for?
It is important to understand who these tokens that are locked are owned by, in order to make a clear assessment of the impact they may have on the market and the price of GRT.
These tokens are not being unlocked and sent directly to the market for sale, as some would have you believe.
During the debate regarding GIP002, a user in our community made the following comment when it was stated “the indexers will just dump on us every day”.
Let’s cut down this apple tree that took so much time and energy invested that also produces lots of apples for income so we can sell the wood for furniture. It doesn’t make sense to say indexers will flee if given encouragement to stay in the game. I’m looking forward to the next phases.JB Graphtronauts Telegram Community
I think the above statement goes a long way to explaining the investment sentiment of both intelligent medium to long term retail investors as well as many of the parties listed, below, who have been central to building The Graph.
In summing up the potential for each of the groups below we will reference the above analogy.
The tokens that are to be released are already owned by parties, below we go through, which parties own what percentage of the tokens and discuss the possibility of said tokens being sent directly to the market.
Testnet Indexer Rewards (~3%)
Testnet Rewards will be locked for 1 year following network launch and will unlock monthly for the year after that.
Curator Program Grants (~3%)
Up to $1,000 USD worth of GRT per Curator will be unlocked at launch (estimating 1,000 Curators); and remaining allocations will vest over 4 years, unlocking every 3 months.
Early Backers & Backers (~17% + ~17%)
These supporters are long term oriented and have lockups ranging from 6 months to 2 years. Backers will be able to stake and delegate their tokens before they’re unlocked.
Graph Foundation (~20%)
10-year unlocking schedule. Approximately ~2.1% of GRT will be unlocked at launch to support initial grants to subgraph and dApp developers as well as protocol development by external contributors. An additional ~2.5% of GRT will also be unlocked at launch for distribution to ecosystem partners.
GRT Sale (~6%)
2% of GRT has recently been sold to Indexers and strategic community members by the foundation for $5.2M. This strategic allocation is locked up for 1 year.
Early Team & Advisors (~23%)
Standard 4 year vesting schedules, locked up until July 2021. The early team will be able to stake and delegate their tokens before they’re unlocked.
Educational Programs & Bounties (~3%)
Approximately 2.2% of GRT is being allocated to educational programs that will be unlocked at network launch. 0.5% of GRT is also being allocated to bug bounties.
Edge & Node (~8%)
The organization is under a 5-year vesting schedule with 1% unlocked at launch.
New Issuance (~3%)
The new issuance rate will start at 3% annually and is subject to future technical governance.
Curator Program 3%
A pretty central role in the network and will have more of an average joes insight into the earning potential of working with the network.
50/50 on whether they sell or use their tokens to curate more signals to the indexers, therefore earning more rewards.
Testnet Indexer 3%
These individuals helped build the network, from the ground up and were mission-critical to help get the project off the ground. Spread across 20+ different countries. There were over 200 individuals, companies taking part in the Mission Control Incentivized Testnet, many of these involved have gone on to become indexers in the live network.
Testnet Rewards. 3% of GRT is being allocated to reward Indexers participating in the test net. Testnet Rewards will be locked for 1 year following network launch and will unlock monthly for the year after that.
Indexers will be able to stake and delegate their test net tokens before they’re unlocked.
Unlock from December 2021
Instrumental in planting the trees and has been reaping the apples (rewards) since launch, 50/50 on whether they sell.
Early Team & Advisors 23%
25+ experienced engineers, product builders and business leaders, passionate about open data. This team delivered world-changing technology at breakneck speeds through difficult market conditions. They’ve created significant value and proven their skill, dedication, work ethic, mission alignment, and execution ability.
Are on standard 4 year vesting schedules, locked up until July 2021.
The early team will be able to stake and delegate their tokens before they’re unlocked.
Instrumental in planting the trees and has been reaping the apples (rewards) since launch, experienced, leaders, likely to not be under the financial pressure to sell, 80/20 on that this group doesn’t sell.
Educational Programs & Bounties 3%
Approximately 2.2% of GRT is being allocated to educational programs that will be unlocked at network launch. The coinmarketcap quiz, we have seen the rise in the number of small wallets (below 20 GRT), these were delivered to exchange wallets and will most likely be sold.
0.5% of GRT is also being allocated to bug bounties, not released until bugs are found, no fixed time frame for this.
Majority are like people who visited the orchard and received free samples, more likely most have already cashed in.
Edge & Node 8%
Edge & Node has no external shareholders. Its mandate is to accelerate the transition to a decentralized future. The organization is under a 5-year vesting schedule with 1% unlocked at launch.
The core of the whole of the project, the ones who had the vision and determination to, dream up the idea and then to execute.
Envisoned the orchard, planted the seeds, toiled the land, put many, may hours, days months into the orchard even existing, knows the full potential and scale of the entire project.
Likehood of mass sell off on release 90/10.
Early Backers & Backers 34%
A percentage of the locked tokens belong to Institutional investors including
Digital Currency Group
South Park Commons
These are all large investment firms who have enough faith in both the vision and potential of the project to invest significant sums and to have their investment locked over a few years, these are not the kind of investors who are looking to dump as soon as they are able to.
If these companies had bought in at even the price of the private sale price (highly unlikely) these companies are already many many times upon their investments, investment companies do not just take the money and run, especially when they can see that there is much more room for upside potential.
As already stated above, this group of holders can already “Backers will be able to stake and delegate their tokens before they’re unlocked.” so they are already as well as price appreciation earning on their investments by delegating, for sure-fire returns.
But when their tokens are unlocked they will just sell them, that does not make sense when they are already many times upon their initial investment just through price appreciation of the asset alone.
Provided the capital to build the orchard, will have had detailed projection targets, and have factored in their expected earnings to their balance sheets for a number of years. As the Graph is expected to be the “Google of blockchain, given the strong position that Google is in from an earnings point of view, highly unlikely these professional investment companies are to sell 90/10.
The Graph Foundation 20%
About 20% of the locked GRT tokens are allocated to the foundation, their purpose is to the hub at the centre of the entire ecosystem, guiding the community and helping it reach the vision of the founders.
The foundation recently announced the first wave of community grants and focused on a number of key areas
Protocol Infrastructure ~$1.2M
Dapps and Subgraphs ~$400K
Community Building ~$400K
Community & Development $500K+
Foundation Operations $400K+
Bounties & Audits $500K+
Wave two has already been started and the following additional field has been highlighted as areas the foundation is looking to award grants to:
- Multi blockchain expansion support
- Curation and subgraph tooling
- Subgraph testing frameworks
- Subgraph static analysis tooling
- Dapp and subgraph standards
- Network Reputation
- Internationalization / Translations
- L1 blockchain node optimizations
- Educational content & curriculum development
Given the foundation’s investment in building and investing in infrastructure and the governance rules in place, once again the chances of these unlocked tokens being dumped onto the market are zero.
Literally are the orchard trustees, also wrote in stone that the funds they have are for the betterment of the entire orchard and not for selling 100/0 on selling.
GRT Sale 2%
4% of the total supply was sold to early retail investors waited around three months from date of purchase to release and saw 10X returns on their initial investment, while the price retraced from the $0.70 mark to around $0.40, perhaps in part due to many of these retail investors taking profit, it could be also possible many of these took the opportunity to repurchase more tokens.
The price did trade sideways for a few weeks, before finally breaking through the $1 barrier, then going on to smash through the $2 barrier, before retracing back to the $1.30 -$1.80 channel.
2% of GRT was sold to Indexers and strategic community members by the foundation for $5.2M. This strategic allocation is locked up for 1 year.
This 2% will not unlock till December 2021.
This is the GRT that all of us are holding a percentage of, this is what is traded on the exchanges, 98% of the available supply is locked for delegation. So only a very small percentage of the small percentage is actually available for sale.
Since its launch, the project has continued to evolve
It seems like almost every day there is a new news story released from the team, regarding, a new integration, ecosystem development, or query volume increasing. If this had been a project launched in 2017 /18 we would already be seeing huge gains via the FOMO buying, buy the rumour sell the news, would not work here as the news is almost constant.
So in March there were 19 BILLION which 600 MILLION daily queries and that’s on the hosted service so assuming that same kind of growth rate it’s pretty wild it’s about 30% month over month. Within the graph ecosystem, there are over 10,000 LIFETIME SUB GRAPHS that have been deployed and almost 16000 lifetime developers that are actively building those subgraphs and that’s over a 100X GROWTH IN THE LAST YEAR.Tegan Kline GRTiq Podcast
More blockchains being added
In the four months since the GRT token release, a lot more partnerships have been announced.
The Graph has added more blockchains and continues to add more blockchains and protocols, generating even more potential queries in the future. (Chains the Graph can index)
In other news
The Graph has announced that all the hosted subgraphs will begin migration to the main net starting April 2021, this means a lot more paying queries, generating 99% more revenue for the entire ecosystem.
Query volume has increased month on month by around 30%, reaching 19 billion queries in the month of April. At the current growth rate, without the new chains mentioned above, by May 2021 queries will be in the region of 1 billion per day.
Over 98% of the currently available supply is delegated (staked) on the network and earning delegators and indexers reward daily.
The ecosystem has started to grow, the foundation has taken over, Edge and Node have been formed and several key development companies have been added to retainers to help with the development of the ecosystem.
A robust community governance model has started to emerge, that handled some pretty passionate debating of the GIP002 proposal.
The major payment gateways Visa, Mastercard, Paypal have all announced accepting payments in Crypto.
Grayscale has opened a trust in the name of Grayscale The Graph Trust (GRT) File number – 5326761
NFT marketplaces have been added to services that can now be indexed.
The Graph is becoming more integral to the entire blockchain system.
So where is all the noise coming from
It only takes a few people on social media to sow misinformation as fact, earlier today I found this while surfing on the most famous dustbin websites (it was linked in our Google analytics reports)
How naive do you have to be to operate like that, but everybody is different and not every piece of information you hear should be accepted as truth, or relayed as fact without checking it first, remember “FAKE NEWS”.
The noise is coming only from retail investors which account for only a small portion of the total GRT that will ever be available, 6% in the days after launch after the price had retraced from its initial run to $0.70, there were lots of cries of
“They need more marketeers”
But who should they market it to, Joe public, never once was this response replied to
“I have lost money, I hope the owners will address this”
Why should they address your weak hands
“This is not going anywhere”
Hindsight is brilliant
My personal favourite
So in summary
The tokens to be released are ALREADY OWNED
The platform is growing exponentially
You got in early
Weaks hands always panic
Hopefully, you didn’t get too much comprehension indigestion from reading all that.
This is not financial advice. DYOR