Data Indexers: The Key to Unlocking the Power of Multichain Blockchain Data

Blockchain technology is renowned for empowering individuals to exert greater control over their experiences and finances, eliminating the need for centralized services. However, this capability is contingent upon users being able to access the data stored within the blockchain.

When Satoshi Nakamoto conceived the world's first blockchain, rendering it accessible was a relatively straightforward endeavor. In a multichain landscape comprising hundreds of decentralized networks, this task has become considerably more arduous, especially in the absence of specialized tools for data retrieval.

Despite being inherently open and public, blockchain poses challenges for users attempting to access the data it stores. This difficulty stems from Nakamoto's oversight in not fully considering a world populated by numerous blockchains and Layer-2 networks built upon them. As a result, blockchain lacks a reliable mechanism for users to comprehensively read the data stored within it.

For instance, if a decentralized application (dApp) endeavors to ascertain the history of transactions on Solana, it must navigate more than 300 terabytes of data—a volume that relentlessly expands with each new transaction and block.

The Plight of Storing Data in Blocks

The preferred method for accessing on-chain data is through an RPC node. RPC stands for "remote procedure call" and serves as the protocol employed by individual nodes to communicate with the blockchain.

Yet, utilizing RPC calls to search the blockchain proves to be a laborious process, owing to the manner in which these decentralized ledgers process and sequentially store their data, adding one block after another.

As more blocks are appended to the blockchain, it grows in length, scattering critical data throughout the chain and categorizing it based on the time of its creation. Unfortunately, this renders blockchains incredibly disorganized.

While searching for data within a specific block or information pertaining to a particular account remains relatively manageable, more complex searches that span multiple blocks present a significant challenge.

Due to the dispersed nature of the data, retrieving the necessary information takes an extended period, posing difficulties for dApps that rely on such data to execute their smart contract logic as intended.

Although EVM-based chains share an interoperable data scheme that facilitates easier searches, this convenience does not extend to SVM chains and other popular networks. Consequently, anyone working with data at multichain scales encounters substantial headaches.

Who Stands to Benefit from Blockchain Data?

Access to blockchain data is paramount for modern dApps, as it enables their most advanced features, including analytics tools and smart contracts.

For example, DeFi applications can be vastly improved by accessing multichain data, as this allows them to tap into much greater liquidity, ultimately providing a better experience for users, with real-time updates about what’s happening across numerous blockchains. NFT marketplaces can also benefit from being able to access blockchain data, as this will enable them to provide users with more insights about collections on different chains, their prices and what people are doing with them.

Another example is SocialFi protocols such as Farcaster and Lens, which need to store much more than just transaction details, such as all of the information about who is following who and what those people are posting and saying to each other. Fetching all of this data involves some serious searching.

Furthermore, there are countless scenarios in which easy-to-access blockchain data can pave the way for even more advanced use cases, such as decentralized AI. For instance, large language models could use on-chain data such as social graphs to curate content, identify trends and generate participant’s reputation scores, based on their previous blockchain interactions.

Blockchain is poised to become the foundation of a new generation of more sophisticated dApps, but in order for that vision to become a reality, developers need an easy way to access them.

Easing Access with Data Indexers

The gateway to the blockchain data kingdom lies in data indexers, which are protocols that index the entire contents of a blockchain network by scanning every block posted to it. They store this information in a format that’s more consistent and simpler to query, something more akin to an SQL database, for instance. Some of the main examples of these data indexers include The Graph and SQD.

Blockchain data indexers are decentralized protocols that perform the role of the middleman when it comes to searching blockchains, making the information within them more easily accessible for developers.

The advantage of data indexers is that blockchain data can be stored in a more logical, searchable way. So a smart contract, for instance, can be stored alongside all of the transaction IDs and block numbers associated with it, making that information easier to retrieve.

Data indexers are written in high-performance code that’s designed to facilitate rapid queries, and they consist of a database to store that data in a more logically organized way, plus APIs for accessing that database. They also require an archive node that keeps fetching any new transactions as blocks are added to the chain, ensuring they’re able to access the most up to date information.

With a data indexer, developers won’t have to worry about what’s happening on the multiple