Constellation Use Case

What is Constellation?

Constellation Network Inc. is a blockchain network that makes use of  Hypergraph Network, a scalable and secure distributed network for verifying data for enterprises and public institutions. It is the first truly decentralized and highly scalable DAG (directed acyclic graph) protocol.

Its utility token, $DAG, acts as the financial state channel of the Constellation Network. It enables agile interoperability between the various state channels and nodes that the network consists of. $DAG also connects the different components of the network. 

Constellation runs on its own distributed ledger technology and blockchain infrastructure. Entrepreneurs looking to build blockchain applications can leverage Constellation’s functionality while enjoying real-world business metrics and outcomes in their blockchain-based applications. This is possible due to its framework that allows enterprises to build and conduct business with each other on a blockchain

Just like WordPress, Constellation has an open-source framework with powerful developer tools that application developers can build on. It also offers data confirmation tools to business users while leveraging the unique capabilities of blockchain technology like immutability, security, auditability, and traceability. 

Constellation’s decentralized Hypergraph network provides speed and scalability and it leverages a reward layer that is used to maintain the network. Currently, millions of transactions are processed in the Hypergraph network in a month. It offers a costless peer-to-peer network that validates $DAG transactions, which is confirmed by a reputation-based consensus.

Constellation is advancing blockchain entrepreneurship through an ecosystem of businesses and state channels powered by $DAG utility. Constellation’s L_0 state channels are an improved version of smart contracts. It offers an effective business logic that supports the creation of a new cryptocurrency standard, data confirmation, traceability, and accountability to businesses.

Without the presence of middlemen, businesses can deploy state channels (microservices) and enjoy the power of blockchain, with business logic and incentives built into your application. Constellation’s ecosystem enables business technology leaders to integrate blockchain technology into existing systems and applications through its state channels and L_0 standard.

$DAG Use Case: Validator Rewards for Nodes

Constellation network usually rewards nodes who contribute their resources, including electricity, hardware, money, and time with $DAG tokens. Decentralized networks are not run by a single individual but many network participants. 

To encourage nodes to keep contributing their resources to the Constellation network, their contributions are incentivized with $DAG tokens. The supply of these tokens is 1.6B DAG. The supply of this token halves every 2.5 years.

The $DAG tokens awarded to nodes are stored in a specially assigned validator rewards wallet. The rewards are allocated at the end of each finality window (snapshot), similar to block confirmation time in Bitcoin. Nodes receive rewards according to the node’s tier and reputation score. The best reputation score is 0.

The total available pool of rewards is determined by the finality window (snapshot time). A snapshot time may increase or decrease based on the number of nodes in the network. Due to this, the number of rewards received by nodes may differ based on snapshot time. 

In addition, factors like imperfect reputation scores or earned transaction fees from throughput purchases could affect nodes payout amount in rewards.

Constellation Use Case: Securing Throughput on the Network

$DAG also serves as a tokenized throughput or bandwidth on the Constellation network. This allows big data applications to pay for throughput to have access to consensus, validation, and notarization functionalities on the network.

However, primary rate-limited functionality will remain free. This will allow users to send single transactions for one-off P2P payments for free. 

When users need to carry out advanced data processing or data exchanges, more throughput is required. The throughput is acquired through $DAG micropayments or by contributing resources as a node operator to the network.

Constellation Use Case: Purchasing Validated Data Sets on the Network

$DAG is used for the tokenization of data packages or data sets on the network. This creates an opportunity for Constellation to become a network for exchanging the data sets of the future.

Furthermore, the $DAG tokens enable the ability to attach value to information on the network. This is the fundamental purpose for a data marketplace and is important to creating a thriving economy of big data. Simply, $DAG is used to transact data value between participants in the network. 

If a business wants to exchange information or data with another business on the network,  it is crucial to use $DAG for the exchange. The Network itself is a data exchange mechanism and ties utility to the token.

Constellation Use Case: Medium of Exchange on Constellation Network

DAG is a utility token that is used as the medium of exchange between participants on the Constellation network. $DAG serves as a convenient and secure mode of payment and settlement between participants who interact within the ecosystem on the Constellation network.

However, it is not, and not intended to be, a medium of exchange accepted by the public (or a section of the public) for paying for goods or services or the repayment of a debt. $DAG is also not designed to be used by any person as payment for any goods or services that are not exclusively provided by the issuer.

Furthermore, $DAG does not in any way represent any shareholding, participation, right, interest in the Constellation network. $DAG will also not entitle token holders to any promise of fees, dividends, revenue, profits, or investment returns of the network. $DAG can only be utilized on the Constellation network.

Constellation Use Case: Staking by Nodes

While validator rewards help to increase the liquid token supply in the Constellation ecosystem, staking decreases liquidity in the ecosystem.

In a basic level node, a user is expected to stake a minimum of 250,000 DAG tokens. Early adopters and token holders lock up their tokens to contribute their resources to the network.

As the network continues to grow, about 100 nodes are expected to lock up liquidity of 25,000,000 DAG. When the network reaches a state of fully built-out mode, the staking in nodes may bind up to 250,000,000 DAG.

$DAG tokens are staked in each of the node’s wallet. The protocol checks if the required minimum amount is present in the wallet before allowing the node to participate in the consensus process.

Staking in nodes is different in Constellation than in other networks. In most networks, staking enables access to the network but does not grant access to participate in the consensus process. Thus the reputation-based mechanism in Constellation remains truly meritocratic and does not involve the issues associated with giving the highest holder more influence in the network.

The Role of Constellation in Crypto

Constellation is building a network that is effective for the data and throughput needs of tomorrow in the Big Data space. Its unique technology is efficient in processing big data applications and data streams on the blockchain.

It’s building a data economy that is vastly different from what exists today.  It offers a knowledge economy where data can be securely exchanged and monetized through the network itself. The network not only acts as a connector but as a marketplace infrastructure that enables data validation, scoring, and exchange among enterprises and public sectors.