This document provides a comprehensive overview of the Constellation Network's Hypergraph, a decentralized network protocol. The Hypergraph utilizes a directed acyclic graph (DAG) structure, enabling parallel transaction processing for superior scalability compared to traditional blockchains. Its layered architecture features a Global L0 layer for final consensus and immutable data storage, and independent, customizable subnetworks called metagraphs that handle specific functions and data types before submitting snapshots to the Global L0. Key themes include the network's innovative consensus mechanism (Proof-of-Reputable Observation), its flexible tokenomics model (Metanomics) for the native DAG token, and the powerful functionality of metagraphs as building blocks for diverse applications. The overall purpose is to detail the structure and function of this novel blockchain alternative, highlighting its advantages in scalability, security, and interoperability.
How does the Hypergraph network achieve scalability and decentralization, and what problem does it solve that traditional blockchains often struggle with?
The Hypergraph uses a directed acyclic graph (DAG) structure, which allows for parallel processing of transactions, and a layered architecture with independent metagraphs to achieve scalability. This design addresses the Blockchain Trilemma by creating a secure, decentralized, and infinitely scalable network that conventional blockchains have difficulty with.
The Global L0 is the base layer of the Hypergraph that organizes, validates, and stores data from other parts of the network in the immutable ledger. It acts as the final layer of consensus and enables cross-chain interoperability, ensuring consistency and security across all metagraphs.
What are metagraphs, and how do they contribute to the Hypergraph's architecture? Provide an analogy to explain their function.
Metagraphs are independent subnetworks built on top of the Hypergraph that perform their own validation and consensus before submitting their state to the Global L0. They can be compared to microservices, each managing their own state updates in isolation, allowing for parallel processing.
The DAG L1 network is a special metagraph that validates DAG currency transactions and submits them to the Global L0 for final validation. Unlike other metagraphs, it relies entirely on the Global L0 for validation and acts as the home for the network’s native currency.
Proof-of-Reputable Observation (PRO) is Constellation's consensus mechanism that measures each node's reputation, which is based on past performance, DAG staked, up-time, etc. The goal is to enable more flexible application development and high transaction throughput.
Validator nodes are incentivized with DAG tokens for providing computational resources and performing consensus on data that flows through the network. Rewards are weighted based on their contribution and the volume of data validated.
Metagraphs submit snapshots to the Global L0, which contain validated data, for final consensus and inclusion in the global ledger. These snapshots represent the metagraph's state and act as a bridge between metagraphs and the global network.
The two main categories of fees are required and optional. Required fees are necessary for actions like snapshot processing, while optional fees can be used to prioritize transactions or overcome network limitations like rate limits.
A DAG is a directed acyclic graph structure composed of vertices (transactions) and edges (relationships), allowing for asynchronous inputs and parallel processing. Unlike a blockchain, DAGs do not have sequential blocks.
What is the purpose of the Metanomics model, and how does it address the limitations of a fixed supply model for the DAG token?
Metanomics is a flexible supply model for DAG that introduces a dynamic inflation rate based on market price to ensure sustainable growth and incentivize network participants. This model addresses the limitations of a capped supply which could hinder the network’s ability to adapt and scale.
Instructions: Develop a detailed essay response for each of the following questions, drawing from the provided source materials.
- Compare and contrast the architectures of traditional blockchains with the Hypergraph network, emphasizing the advantages and disadvantages of each approach regarding scalability, security, and interoperability.
- Discuss the various roles that the DAG token plays within the Hypergraph network and analyze how the Metanomics model changes the economics of the network.
- Explain how metagraphs function as customizable building blocks within the Hypergraph network and provide an in-depth examination of how they enable real-world data integration and innovative applications.
- Analyze the importance of network fees and how they contribute to the long-term sustainability, security, and scalability of the Hypergraph, including how snapshot fees and staking influence the network’s tokenomics.
- Critically evaluate the economic incentives and disincentives for various stakeholders (validator nodes, metagraph developers, DAG token holders) within the Hypergraph network and discuss how they align with the network's overall goals.
- Hypergraph: A decentralized network protocol composed of multiple independent networks called metagraphs, using a directed acyclic graph structure (DAG) for data storage. It also refers to the base layer of the network.
- Global L0: The foundational layer of the Hypergraph network, responsible for validating data from metagraphs and storing it on the immutable ledger, also referred to as the Hypergraph.
- Metagraph: An independent subnetwork built on top of the Hypergraph that processes data and acts on triggers with its own consensus mechanisms and business logic. Also known as a "state channel".
- DAG L1 Network: A specific metagraph that validates DAG currency transactions, bundles them into blocks, and submits them to the Global L0.
- DAG (Token): The native cryptocurrency of the Hypergraph network used for incentives, transactions, and securing network throughput.
- Validator Node: A computer that provides computational resources to perform consensus on network data and is incentivized with DAG tokens.
- Proof-of-Reputable Observation (PRO): The consensus mechanism used by the Hypergraph network that measures a node’s reputation based on various factors.
- Snapshot: A bundle of validated transactions and state data submitted from a metagraph to the Global L0 for final consensus and inclusion in the ledger.
- byteSize: The size of the code being run to validate a transaction/data type.
- computationalCost: The time and resources required to run a validation function.
- workAmount: A measure of the total work the Hypergraph must perform to validate a transaction, combining byteSize and computationalCost.
- unitMultiplier: A factor that adjusts the cost of work based on a metagraph's staked DAG and PRO score.
- stakedDAG: The combined DAG staked by all nodes that sign a metagraph snapshot.
- baseFee: A constant value that sets the foundational fee unit of the network, measured in datum.
- optionalTip: An additional fee added to a snapshot to prioritize its processing in the network.
- Directed Acyclic Graph (DAG): A graph data structure consisting of vertices (transactions) and directed edges that flow in only one direction, and that contains no cycles.
- Metagraph Token: A custom token issued by a metagraph to facilitate transactions within its network.
- Mempool: A waiting area for pending transactions before they are validated and added to the ledger.
- Metanomics: Constellation’s new tokenomics model that features a flexible supply and dynamic inflation rate for the DAG token, beginning in 2025.
- Delegator: A DAG token holder that chooses to delegate their tokens to a validator to earn rewards.
- Cell: A layer or module within a metagraph that can define different consensus logic for various data types.
- Hyperedge and Hypervertex: Connectors that allow the Hypergraph to combine multiple graphs.
- Datum: The smallest denomination of the DAG token.
The Hypergraph is Constellation Network's foundational layer, a decentralized protocol structured as a directed acyclic graph (DAG). Unlike traditional blockchains that process transactions sequentially in blocks, the DAG structure allows for asynchronous inputs and parallel transaction processing. This results in greater scalability and speed, enabling the Hypergraph to handle a larger volume of transactions and more complex data interactions efficiently. It also allows for a network structure that includes multiple independent networks (Metagraphs) rather than one linear chain, akin to microservices communicating in a traditional web environment. The Hypergraph's Global L0 layer serves as the base layer, providing final consensus and immutable storage.
Metagraphs are independent, customizable subnetworks built on top of the Hypergraph, similar to microservices. Each metagraph can define its own business logic, data types, consensus mechanisms, and token economies. They process and validate data within their own boundaries before submitting snapshots to the Hypergraph's Global L0 for final validation and storage. This approach enables independent processing and concurrency between updates that are unrelated to each other, allowing the network to achieve horizontal scalability while accommodating diverse use cases. Metagraphs also have the ability to mint their own tokens, creating specific incentives for users and validators.
$DAG is the native utility token of the Constellation Network. It operates on a special Layer 1 (L1) metagraph that validates DAG transactions and bundles them into blocks for submission to the Global L0. $DAG underwrites all projects connected to the Hypergraph and secures network utility by providing liquidity and sufficient bandwidth to the entire ecosystem. It is used to incentivize validator nodes for their computational contributions, as a means of exchanging value between users, and will be used for purchasing validated data sets on the network. It also acts as a mechanism for accessing higher throughput and priority on the network, especially when a user goes beyond standard rate limits for transactions.
The Constellation Network utilizes a novel consensus mechanism called Proof of Reputable Observation (PRO). This mechanism measures the reputation of validator nodes based on several factors, such as past performance, amount of DAG staked, and uptime. This approach promotes more flexible application development and high throughput by weighing each node's contribution to network security and performance. By prioritizing reputable nodes, PRO helps to ensure the trustworthiness and security of the Hypergraph.
Validator nodes are incentivized to participate in the Hypergraph by earning rewards in $DAG. Their primary role is to provide computational resources used to validate the data that flows through the network and to perform consensus operations. Incentives are distributed based on their PRO score and the volume of data they are validating, which encourages both large and small nodes to operate fairly. By actively contributing to the network's validation and security processes, validator nodes play a vital part in the overall functioning of the Hypergraph.
How does the network handle fees, and how are they used to incentivize activity or address congestion?
The network employs a dual approach to fees, using both required and optional fees. Required fees are necessary for key network operations, such as submitting metagraph snapshots to the Global L0. Optional fees serve as priority tips, allowing for expedited processing during network congestion or when higher throughput is needed. The fees are calculated based on factors like the size of the data being validated (byteSize), computational cost of validation, staked DAG, and the PRO score of the submitting metagraph. These fees contribute to the network's sustainability and slow inflation by removing the tokens from circulation and later potentially being re-distributed as validator rewards after the max supply of DAG has been reached.
The Metanomics model represents a major shift in DAG tokenomics, moving away from a fixed supply to a flexible supply model. This new model introduces a dynamic inflation rate that adjusts based on market conditions, ensuring predictable incentives for node validators, participants, and protocol development, while maintaining economic integrity. The inflation rate starts at 6% and gradually decreases yearly until it stabilizes at 0.5%. It also incorporates market price into the emission formula, meaning when the DAG token price is higher, less inflation is required. Metanomics introduces delegators, who can stake their DAG with validators to earn incentives, and the protocol utilizes a portion of emissions for core network development. This new model is designed to address the network’s future needs and foster sustainable growth.
Developers can interact with the Hypergraph using the Euclid SDK, which provides the tools to build custom metagraphs. The network supports various wallet applications, including Stargazer, Bitfi, and Molly Wallet (although Molly Wallet is no longer being updated), which facilitate interaction with network addresses and keys. There are also tools available such as the DAG explorer to monitor transactions and network activities. These tools and resources allow developers to leverage the Hypergraph's capabilities, build their own custom networks, and create diverse applications.
This document provides a comprehensive overview of the Constellation Network, also known as the Hypergraph, based on the provided source materials. It covers the network's architecture, core components, tokenomics, and key features, designed to provide a holistic understanding of this complex system. The Hypergraph is presented as a decentralized protocol that aims to solve the Blockchain Trilemma through a unique architecture that prioritizes scalability, security, and decentralization.
- Hypergraph as a Foundation: The Constellation Network is built upon a directed acyclic graph (DAG) structure, enabling horizontal scalability. The DAG is a graph structure where vertices (nodes) represent transactions and edges represent relationships between transactions. Unlike traditional blockchains with sequential blocks, DAGs allow for parallel processing of transactions, boosting speed and efficiency.
- "The design of the Hypergraph network is based on a graph structure that looks like a set of dots (vertices) joined by lines (edges). More specifically, this structure is known as a directed acyclic graph (DAG)..."
- Layered Approach: The network is structured in a layered approach:
- Global Layer 0 (L0): This is the base layer of the Hypergraph, responsible for final consensus and storing data from other parts of the network on an immutable ledger. It provides core functionality for cross-chain interactions and message sharing.
- "The Global Layer 0 (Global L0) or Hypergraph is the base layer and final layer of consensus on which the rest of the network is built."
- Metagraph Networks: These are subnetworks built on top of the Global L0 that operate as "microservices," each with its own custom business logic and consensus mechanisms. Metagraphs validate data before submitting snapshots to the Global L0.
- "Metagraphs are subnetworks that perform their own validation and consensus before submitting data to the Global L0 for final consensus and storage in the ledger."
- DAG L1 Network: A special metagraph responsible for validating DAG token transactions. It submits bundled transactions to the Global L0 for final validation.
- "DAG Layer 1 (L1) is a special case L1 network that validates DAG currency transactions for the network..."
- Global Layer 0 (L0): This is the base layer of the Hypergraph, responsible for final consensus and storing data from other parts of the network on an immutable ledger. It provides core functionality for cross-chain interactions and message sharing.
- Hypergraph as a "Graph of Graphs": The Hypergraph is described as a graph that allows for the modeling of group relations, where graphs are connected by hyperedges and hypervertices. This allows for the integration of data from various networks into one structure.
- "Think of a Hypergraph as a graph that allows you to model group relations instead of only binary relations, enabling a graph to be constructed of other graphs."
- Validator Nodes: These nodes perform consensus on network data and are incentivized with DAG tokens for providing computational resources.
- "Validator nodes validate or perform consensus on all the data that flows through the network, and are incentivized with DAG tokens..."
- Metagraphs: These are customizable subnetworks that allow for the implementation of diverse functionalities and business logic. They are designed to integrate with both web2 and web3 environments.
- "Each Metagraph is flexible and customizable to validate and process data according to its user-defined business logic."
- DAG Token: The native utility token of the Constellation Network. It underwrites projects connected to the Hypergraph, secures network utility, and is used to incentivize validators.
- "DAG is the native utility token of Constellation Network...DAG underwrites all projects connected to the Hypergraph..."
- Proof of Reputable Observations (PRO): Constellation's unique consensus mechanism measures node reputation using factors like performance, staked DAG, and uptime.
- "Hypergraph’s unique consensus algorithm that enables more flexible application development... by measuring each node’s reputation."
- Custom Consensus: Metagraphs can define custom consensus mechanisms, which are crucial for validating real-world data and implementing complex business logic, allowing more flexibility than other blockchain solutions.
- "One of the most powerful features that Hypergraph provides metagraphs is the ability to define custom consensus mechanisms."
- Microservice Architecture: Metagraphs act as independent microservices, allowing for isolated state management and concurrent processing.
- "Metagraphs are like traditional microservice development environments where the state of data is managed by exclusive logical service boundaries."
- Flexible Organization: Metagraphs can be organized as decentralized networks, hybrid networks, or centralized services based on their specific needs.
- Metagraph Tokens: Metagraphs can mint their own tokens to transact within their subnetwork.
- "Metagraphs can define their own tokens, known as metagraph tokens, which can be used to transact within their network..."
- Cells: Metagraphs use cells, which are essentially layers, where consensus is applied to different data types as it passes through them.
- "A metagraph can contain an indefinite number of validation layers, or 'Cells', where different consensus logic is defined for the various data types..."
V. Network Fees
- Fee Structure: The network uses a two-tiered fee approach:
- Required Fees: Minimum fees are necessary for operations such as snapshot processing and storage. These fees are fixed and ensure essential functions.
- Optional Fees: Dynamic fees that allow for prioritized processing and overcoming network limits. These act as tips for validator nodes to prioritize transactions.
- "A minimum fee is necessary for certain actions to proceed... and a dynamic or market-rate fee that allows actions to be performed with enhanced priority or speed."
- DAG Transactions: Peer-to-peer DAG transactions are typically feeless but can include optional priority fees. New security measures include rate limiting based on wallet balance which can be overridden with a small fee. * "While primarily a feeless currency, DAG has always had the concept of optional fees which can be used to prioritize a transaction over others."
- Metagraph Snapshot Fees: Metagraphs pay fees for sending snapshots to the Global L0. Fees are calculated based on data size, staked DAG, and PRO score. These fees are currently irrecoverable which could lead to a deflationary effect.
- "In order to use the Hypergraph, Metagraphs must contribute fees to the network for each snapshot of state submitted."
- Fee Calculation Parameters: Snapshot fees are determined by factors such as:
- byteSize: The size of the data being validated
- computationalCost: The time and resources required for validation.
- workAmount: A combination of byteSize and computationalCost.
- stakedDAG: The amount of DAG staked by the metagraph.
- proScore: The PRO score of the metagraph.
- optionalTip: An optional fee for increased priority.
- baseFee: A constant baseline fee value.
- unitMultiplier: Adjusts cost based on staked DAG and PRO score.
VI. Tokenomics
- Initial Model: The Hypergraph started with a fixed incentivization schedule where DAG was rewarded to node operators. This initial model was designed with zero transaction fees to promote adoption.
- Metanomics: Constellation is transitioning to a flexible supply model under "Metanomics," introducing a dynamic inflation rate that starts at 6% and gradually decreases to 0.5%.
- "Beginning in the first quarter of 2025, DAG will transition to a flexible supply token under the Metanomics model."
- Inflation Adjustment: The inflation rate is adjusted based on the DAG market price to maintain economic stability.
- "When the token price is higher, less inflation is required to cover these costs, thereby maintaining economic stability within the Constellation ecosystem."
- Treasury Enhancement: 450 million DAG tokens were unlocked and repurposed to enhance the Constellation Network treasury for scaling, community incentives, marketing, employee incentives, and public goods development.
- Delegation: DAG holders can delegate their tokens to validators, earning rewards. A fixed 3% APR on all delegated DAG, and variable emissions (45% of all inflationary emissions allocated to the network) are paid to delegators.
- "Delegators are key participants within the Constellation Network who hold DAG tokens and choose to delegate them to one or more validators on the network."
- Validator Fees: Validators can set fees on rewards distributed to delegators to incentivized efficient operations.
VII. Key Benefits
- Scalability: The DAG structure allows for nearly infinite horizontal scalability, enabling metagraphs to process large amounts of data efficiently. * "The Hypergraph enables nearly-infinite horizontal scalability of the network..."
- Speed: The Hypergraph enables fast and cost-efficient transactions by allowing for parallel processing.
- "...metagraphs to provide fast and cost-efficient transactions..."
- Interoperability: Metagraphs can accept, process, and validate data from various real-world sources and other blockchains. * "Metagraphs possess the capability to accept, process, and validate third-party data from a variety of real-world sources."
- Flexibility: The custom consensus mechanisms and microservice architecture allow for flexible development and the deployment of various applications.
- Oracle Solution: By allowing metagraphs to interact with real-world data, the Hypergraph helps address the "Oracle Problem" by directly validating data at the source rather than relying on third-party oracles.
- Web2 Integration: The platform’s composability allows for blending web3 technology with web2 infrastructure.
- "The outcome of this design approach provides composable web3 technology with web2 infrastructure and economics..."
VIII. Tools and Resources
- DAG Explorer: An open-source tool for monitoring transaction statuses and network data.
- Stargazer Wallet: A multi-chain wallet supporting Constellation and Ethereum.
- Bitfi: A hardware wallet compatible with Constellation.
- Molly Wallet: A cross-platform desktop wallet for DAG.
- Euclid SDK: Used for building metagraphs on the network.
The Constellation Network, with its Hypergraph architecture, offers a unique solution for decentralized, scalable, and secure applications. The introduction of metagraphs, flexible tokenomics with Metanomics, and a focus on real-world data integration position the network for significant growth and adoption in the future. The platform's ability to bridge web2 and web3 technologies, along with its commitment to sustainability and community participation, underscores its potential to drive innovation and reshape the decentralized technology space. The use of a DAG structure allows for many things not possible with a traditional blockchain. Metagraphs are a powerful concept that enable customized logic, custom tokenization, and specific incentive structures which allows developers flexibility in how they deploy their applications.