Constellation Network - $DAG, Asset Review
General Information-What is Constellation Network?
Constellation Network Background
Constellation Network Funding/Collaboration
Token Information-Tokenomics
Staking
Additional Information-
What is a Layer-0?
Technical Analysis
Conclusion
General Information-
1. What is Constellation Network?
The Constellation Network is a layer-0 that enables people, organizations, or developers to build applications with 0 fees. You read that right, feeless transactions. The blockchain is decentralized, secure, and interoperable with other networks that wish to create a democratized network. The Constellation Network utilizes a distributed ledger technology known as ($DAG) which stands for (D)irected (A)cyclic (G)raph. Today, most blockchains have vertical scaling solutions but Constellation Network utilizes a horizontal scaling solution per the image below which creates more decentralization as the network grows. The more nodes that are on the network the more connectivity, which creates a less centralized network and takes away the risk of a single point of failure in some instances.
Figure A
2. Constellation Network Background
Constellation Network, Inc. is a project based out of San Francisco and was founded by Altif Brown, Ben Jorgensen, Brendan Playford, Wyatt Meldman-Floch in 2017. The founders all have experience from previous technology roles as they use to work at companies like Oracle, Universal Studios, NASA, Zignal Labs, PwC, Freudenberg, and the European Central Bank. The founders created Constellation Network because they saw a purpose of a decentralized and scalable blockchain. The DAG protocol relies on a consensus model known as Proof of Reputable Observation(PRO). PRO is a consensus that relies on the community by using machine learning aspects to balance complex topology with a performance approach to validator rewards. In essence, honest participants and validation of data are rewarded.
3. Constellation Network Funding/Collaboration
Constellation Labs held a token sale in June 2018 raising a total of 33.7 million dollars according to icodrops which may be found here. Outside of the token sale, no venture capitalist firms, hedge funds, or financial institutions have reported investing in the company/token. Since Constellation Network is a layer-0 that helps big data firms operate more efficiently, they have been able to collaborate with big firms like the US Air Force, Helium, Space ISAC, Mobi, GM, Ford, LCX, Quant, and more. The biggest collaboration that sticks out to me is the US Air Force because we have not yet seen blockchain add real value to a military arm. The US Air Force is one of the largest data generators in the world, and they are utilizing Constellation Network which proves this blockchain will serve its needs. These partnerships collectively prove that there is a massive gap between big data inefficiencies and Constellation Network has been working at a federal level to prove it can help resolve issues.
Figure B
Token Information-
1. Tokenomics
$DAG is the native token for the Constellation Network. Currently, the circulating supply is 2,656,902,015 with a capped supply of 3,550,000,000. The token $DAG is used for indexing HGTP, node operators, state channels, and governance. All of these use cases help make the network more secure and decentralized while it remains feeless to transact on. Another important thing to note is that the four founders burned 288 million tokens of their own $DAG tokens to build trust within the community. I will say the one thing that is missing is a supply schedule, distribution schedule, and allocation of the initial supply. This lack of transparency is a little worrisome for an investor because it takes away some trust.
2. Staking
$DAG token holders may contribute to the network by staking. Staking rewards vary up to ~20% APY and have a minimum requirement of 250k $DAG to delegate. Staking rewards have a lock-up period of up to 30 days as pools open and close. According to the Constellation Network, half of the supply is being staked, 300+ nodes are active, and there are over 25k wallets active per below. Another thing that is worth noting is how many projects are built on the ecosystem which may be found here. Currently, there is only a handful of projects built on Constellation but it's expected to grow over time.
Figure C
Additional Information-
1. What is a Layer-0?
A Layer-0 is not a new concept as blockchains like Cardano, and Polkadot has claimed to be Layer-0. In the graphic below you can see how Layer-0’s act as the dirt providing the infrastructure/foundation for others to build on. Layer-0 may also act as a cross-chain communicator from different networks built on top of it. For example, if two Layer-1 networks build on top of the Constellation Network then they can talk to each other. This opens up a world of opportunities for things like decentralized applications, a decentralized network, enhanced cross-chain industry(data transparency, smart contracts, etc), and so much more.
Figure D
2. Technical Analysis
$DAG has had a sensational run from $.004 to $.46 yielding ~114x+ returns. Ever since $DAG hit all-time highs, we have seen the price fall towards a high time frame demand zone (green box) that should act as a support region. Price is likely to consolidate in or near the green box before making a new move. The way the correction subdivides will give hints on how the next move plays out. Bottom structures typically take a long time to form and reverse when the bears are exhausted, so it’s best to stay patient for a clear structure. However, we may not hit the green box so one should prepare for any scenario. If you like $DAG, dollar cost averaging right now may* be a good idea as it's been in a downwards channel for over a year, and the RSI is gaining momentum on the weekly time frame.
Figure E
Conclusion
Without a doubt, I believe Constellation Network is doing amazing things by making big data easier and more secure to handle. The US Air Force is one example that is thriving as they are utilizing the technology built by the Constellation team. The US Air Force signed a phase 2 contract in September 2021 with Constellation that started from just researching and exploring a use case, to utilizing the chain. The US Air Force did their due diligence and found that this network will secure sensitive data, protect data, and ensure national security. I don’t want to go on a rant with just one partnership, but this is the main reason why I’ve become bullish on Constellation because it's extremely different and is making strides tackling big data. As the network keeps going the blockchain becomes more decentralized due to its horizontal scaling nature. I have also shared other companies/protocols in the “…Funding/Collaboration” section that are in the research phase that may* inch closer to actual adoption. Again it is important to note that, while I am bullish on Constellation Network it doesn’t mean it’s directly correlated to the value of $DAG.