What is DAG Token by Constellation Network?

до LCX Team · April 27, 2021 · Updated April 26, 2021

Constellation is a framework that allows everyone to build and conduct business on a blockchain. Existing blockchain technology does not support the speed, scalability, and economic incentive needed to build applications with robust business logic.

Trade $DAG at LCX Exchange

Constellation is its own network and blockchain infrastructure. With Constellation’s L_0 state channel standard, you can define the rules of your business while tapping into Constellation’s Network, powered by rewards.

Constellation Network Inc, is a decentralized network, ecosystem, and framework that enables developers to develop seamless and secure communications through a microservice framework by defining their data types that are validated by the network.. Using their distributed network, called Hypergraph, Constellation enables fast, zero trust, scalable solutions to improve data integrity and data assurance. Constellation utilizes a decentralized directed acyclic graph (DAG) architecture, concurrent consensus, and mathematical proofs to organize the network for speed and security.

Technically speaking, $DAG is a financial state channel of the Constellation Network. It allows the seamless exchange and interaction between the various state channels and nodes that make up the network. $DAG binds the components of the network together and serves as an index to the value of the network.

The circulating supply of $DAG is 2.3 Billion.

Who Created $DAG?

Constellation Network Inc, developed the cryptocurrency $DAG on its Hypergraph Network. The Hypergraph consists of distributed nodes that validate the state of the network and transactions across the network.

How $DAG works?

The economic value or utility of a currency is its ability to conduct transactions within an economy and resembles the exchange of currency within fiat economies. For example, the U.S. dollar is a widely transacted currency across various economies as a value exchange. There are no transaction fees associated with transferring U.S. dollars beyond the mere value exchange for a service or product, unless another product or service is offered in between the value exchange (e.g. credit card processing fee for using a credit card company’s transaction protocol). $DAG is not a security and instead provides utility to engage in Constellation’s digital economy. By connecting the economies that exist on Constellation’s Hypergraph, there is a generative network effect in the relative price index of L_0 tokens – thus increasing overall network value.

In order to create a L_0 token or state channel, you are required to purchase $DAG or deploy a node that receives rewards for maintaining the network and participating in consensus. $DAG is the main consensus layer in the network and state channels are applications built with $DAG. Consensus cannot run without $DAG. If you take away $DAG, you take away the consensus layer.

In our working example of the U.S. economy, banks that lend money charge a fee to people that borrow it for a myriad of uses (mortgages, business loans, personal loans, etc). The Federal Government is rather agnostic to how businesses are funded and instead lets banks and lenders build businesses around the use of capital while underwriting the risk and deciding who they want to lend money to. Like the U.S. economy, Constellation is agnostic to businesses created on Hypergraph, leaving it to network participants to determine the best businesses to supply liquidity (capital) to.

Wyatt Meldman-Floch’s “Generative Tokenomics” white paper provides mathematical proofs that ensure network stability and demonstrate how value can be transferred seamlessly throughout the Constellation ecosystem and other blockchain economies. This creates the programmatic means to develop cross-chain liquidity with zero transaction fees. By having feeless cross-chain transactions, we invite capital from other ecosystems and blockchain networks to participate and provide liquidity in the Constellation economy.

Benefits of $DAG

Constellation focuses on bridging real world data with the power of blockchain through state channels (L_0 standard). Constellation’s L_0 standard will allow anyone to develop business mechanics and rewards on a blockchain – a true evolution of the capabilities of digital currency.

Traditional blockchains and ecosystems provide one metric to capture value on a value-based network: fees. This is programmed and pre-determined in traditional layer 1’s (base layer). This prevents the efficient transportation of data due to fluctuating and high fees for every application that builds on a fee driven base layer and thus limits the amount of currency sinks that are needed to drive a digital economy of the future. These networks are also slow and cumbersome and are not built to manage complex business logic to meet real world needs.

Constellation’s Network, Hypergraph, and transportation protocol HGTP provide speed, security, and L_0 consensus with no base layer fees. Through the creation of state channels with advanced programmable business logic and a feeless peer-to-peer network, we provide a myriad of opportunities for anyone to develop a business that attracts value from the Constellation ecosystem – with economic incentives.

Instead of having large mining firms confirming transactions via proof of work, DAG employs the very transactions that users make in order to confirm each other’s transactions. DAG is essentially a distributed peer-confirming system at scale. The more new transactions on the network, the more the available transactions to confirm previous ones. This implies that there is improved scalability on the network.

Our aim is to attract the next blockchain entrepreneur to build a scalable business with confidence from multiple stakeholders that engage with the business. In short, each device on the network acts as a node, and the behavior of each individual node works along with other nodes to ensure the success of the greater network.

Constellation (DAG) is also available at LCX Exchange.