Constellation Network
4 min readFeb 2, 2023


Constellation Network’s $DAG: Incentivizing Utility on the Hypergraph

Artificial intelligence, governments, enterprise businesses, healthcare institutions, and many other organizations and technologies gather and analyze extremely large quantities of data every day from constituents, customers, and patients for things we take for granted, like receiving customized services. Imagine what it takes to do this for millions of people, and how important it is for all of the data to be accurate so the results you get make sense.

Data validation ensures your data is accurate, clear and reliable. If the data you gather isn’t correct, then it’s not useful. This is where Constellation comes in. Constellation Network is the first Web3 framework to specialize in validating big data using distributed ledger technology.

When fully developed, Constellation’s Hypergraph network can validate data — at scale — and offer unprecedented interoperability and data sharing across diverse systems thanks to its unique DAG-based architecture and state channel framework.

Examples of data to be validated on the Hypergraph will soon be seen with our early state channels, including the Dor Traffic Miner’s various data points from device check-ins to people counts, and hundreds of data points from Alkimi Exchange from bids to ad impressions.

Incentivizing Network Utility and Combating Token Inflation

As protocol development progresses and data validation moves on chain, tokenomics will evolve to accommodate new methods for compensating validators, creating a sustainable, decentralized environment that rewards businesses and datapreneurs for on-chain activity and participation in the network.

At the same time, token inflation must be controlled to maintain network value and better align rewards with utility.

$DAG Data Pool: Incentivising Data Validation with the $DAG Token

Constellation will commence the move toward incentivizing utility by creating a new “Data Pool” of rewards drawn from the current Validator Rewards Pool. The new Data Pool will be a finite pool of $DAG used for things such as Dor Traffic Miner (DTM) rewards, state channel grants, bandwidth grants, and other on-chain data validation activities. Soft node rewards will be adjusted to accommodate the new Data Pool to avoid net new inflation (see table below.)

State Channel grants will be given out to those that are building state channels on testnet and have gone through our Flight Program and new Web3 Launch Kit. As we begin to scale out, we will post a listing for topics and use cases that yield our network positively.

Our goal is that by using $DAG rewards from the Data Pool we will show the possibilities of using incentives and rewards to collect and validate data.

Restructuring Soft Node Rewards to Combat Token Inflation

Due to a recent network update that decreased the intervals between snapshots, block reward frequency has nearly doubled. This has also doubled $DAG token rewards to participants in our soft node staking program, which was instituted as a temporary measure to queue up a seed list of future validator node operators while awaiting Hypergraph network utility.

As a result, our $DAG token has experienced inflation and increased sell pressure. To combat token inflation and better align emissions with on-chain activity, we will be decreasing the emissions rate for soft node rewards and implementing the Data Pool per the following table.

This change will take effect on March 3, 2023 with the commencement of Soft Node Staking Program 17. Users who hold 250,000 $DAG may continue to stake full soft nodes to share 20% of the total reward pool, and fractional node rewards will continue at 50% of the full soft node reward pool.

Per the table above, validator node operators will see no negative impact to their existing reward structure. In fact, they can expect a slight positive impact.

Note: More comprehensive tokenomics are being developed and will be pushed through governance as we onboard developers to the Hypergraph.

Dor’s Enterprise Deal, DTM Rewards, and Data Validation

We’re excited to announce that Dor Technologies, a fully-owned subsidiary of Constellation Network, has closed a 3,000-unit DTM deal with a retail analytics company. This company will operate their DTMs using the same tools and software as any other DTM operator.

As of March 3rd, DTM rewards will be paid from the new Data Pool and will be adjusted to support wider utility of the Hypergraph, such as snapshots of data for the DTM.

Reward distributions for existing DTM holders will remain unchanged upon switching to the Data Pool.

In the coming months, validated data snapshots, starting with “Check-ins,” from all DTM devices will move to the Hypergraph. These validated snapshots will improve our ability to broker data and verify device location and uptime.

Calling all developers:

Constellation Network is actively seeking developers who want to build with us, join our ecosystem, and launch their projects on the Hypergraph.

We look forward to working with you!

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Interested in learning more about Constellation Network and connecting with the community?