As Web3 continues to grow with numerous blockchains and decentralized applications (dApps), accessing on-chain data has become increasingly challenging. Originally, blockchains like Bitcoin were designed to store data in a decentralized and sequential manner, but this has proven difficult to manage in today’s multichain ecosystem. With hundreds of different chains, including Layer-2 networks, retrieving and searching blockchain data—especially across multiple networks—has become more complex.

To address this, blockchain data indexes such as The Graph and SQD have emerged. These protocols index blockchain data, organize it more efficiently, and allow for rapid querying through APIs. Indexers act as intermediaries, making it easier for developers to access and retrieve data quickly and accurately. They organize blockchain data similar to how an SQL database works, storing key details like transaction IDs and block numbers in a more logical format.

For modern dApps, which need access to on-chain data for DeFi, NFT platforms, or SocialFi applications, these indexers are crucial. By using decentralized protocols like The Graph and SQD, developers can handle large amounts of data across multiple blockchains, ensuring smoother user experiences and enhanced functionalities.

The future of Web3, with its emphasis on decentralization, will heavily rely on the efficiency of these data indexers to overcome challenges posed by the vast amounts of data on multiple chains.

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Source: news.investingcube.com

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