Your gun may have been an Erfurt, judging from the trigger, takedown lever, extractor and the proofs. The center toggle has been "scrubbed", (markings removed), but at one time had the Erfurt name and Imperial crown.
Your gun would be considered a "shooter" here in the US, (no collector value), but in its present condition, would be worth maybe $400. A new barrel would allow this pistol to shoot again, assuming that nothing else has been damaged in the gun.
In any event, it is a nice reminder of you Grandfather and should be cared for. Keep it oiled with a quality product. Treat the grips with a good wood preservative and do not store it in the holster, as this will eventually damage the finish.
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