Grading is to provide your students with a goal, one that isn't so high-minded as "the goal is education". The human mind uses a "reward system", within a feedback cycle. If you want to do away with that, just because it's what you prefer, then you're ignoring the reality of being human.

Education has existed in some form since prehistory. Grading didn't become widespread until the 1940s.

Indeed, and it also gives students a way to budget their time between the demands of multiple classes. I studied enough for each course to put me in good enough stead for the exams, then moved on to the next course. I got it right most of the time.