Crypto Is Rising Higher Today, But The Graph Is Rising – Here’s Why
What happened
From 3:00 PM ET, The graph (GRT 4.17%) had risen 8.3% higher in the last 24 hours. This move significantly outperformed the broader cryptocurrency market, which rose just 0.9% during this time frame. With almost 10 times higher performance than the overall market during this period, investors may be curious as to what is driving this lesser-known token higher today.
As it turns out, The Graph seems to be taking advantage of the highly anticipated upcoming Ethereum Merge. Ethereum’s merger will lead to a complete shift to proof-of-stake validation, and will greatly improve the energy efficiency of Ethereum’s network. However, there happen to be some additional upgrades on the horizon that could benefit The Graph.
Proposal EIP-4844 is on Ethereum’s roadmap for future upgrades after the highly anticipated merger. This upgrade is an important piece of the efficiency puzzle Ethereum developers are looking to solve. EIP-4844 will allow validators to no longer broadcast historical data older than one year. Consequently, in theory, transactions should be able to be processed faster (and potentially cheaper), a big win for Ethereum’s burgeoning ecosystem.
Where the historical data that is more than a year old will be stored remains a topic of discussion. That said, The Graph has been named as a crypto project that will provide markets with access to this historical data.
So what
The markets are forward-looking. In general, most investors would probably agree that most of the enthusiasm surrounding Ethereum’s Merge has already been priced in.
There is always the potential for hiccups at The Merge, which could push back future proposals. As such, today’s rally may be short-lived.
However, looking past this important market-moving upgrade, investors may want to gain exposure to tokens that could benefit from post-merger upgrades, such as EIP-4844. The Graph is one such project that provides unique upside to future development.
What now
The fact that investors are already talking about what’s next, even though The Merge hasn’t officially happened yet, is part of how investors’ minds work. For those who take a long-term approach to investing in this area, roadmapping is key to understanding where future growth will come from. For Ethereum’s proposed upgrades, it appears that integration with other projects such as The Graph is necessary to allow review of historical data.
As a key indexing protocol used to query large blockchain networks, The Graph is a compelling long-term investment to consider. However, this potential future integration is one that I think will only gain more attention once The Merge is complete.
