In a recent interview with Genfinity, Ben Jorgensen, CEO of Constellation Labs, and Michal Bacia, Co-Founder and Chief Token Economist at 3A DAO, discussed their collaboration to expand the Constellation Network. We’ll delve into their insights on this partnership and the progress of the Ethereum bridge project. You can read below for more details!
Constellation Network: Feeless, Scalable, Secure The Future of Web3 Data Flow
Constellation Network is a feeless, layer-zero decentralized platform built on a unique Directed Acyclic Graph (DAG) architecture. This enables features for you like infinite scalability, real-time data sharing, and secure cross-chain interoperability. Imagine you are part of a network where information flows smoothly and securely without bottlenecks or limitations.
The key player in this ecosystem is the DAG token, the network’s native cryptocurrency; it is the fuel that powers Constellation. DAG serves several purposes: validating data, securing network utility, and enabling users to participate in the network’s growth. Moreover, by holding DAG, you become part of the “datapreneur” community. This means you are able to buy, sell, and monetize data streams within the Constellation ecosystem.
Ben Jorgensen eloquently summarized the Constellation Network, also noting their work with the Department of Defense:
“We consider ourselves a layer zero. We provide the ability to integrate data into distributed networks for added security, resilience, provenance, and correlate incentivization with auditability. We currently work with the Department of Defense on on many different efforts and have a layer called metagraphs. This is where people build their own subnetwork. They use the layer zero for added security, and metagraphs really have their own customization built from scratch.”
3A DAO: Decentralized Finance Revolutionizing Tokenization & Liquidity
3A is a non-profit organization that is governed by a decentralized autonomous organization, or DAO. A decentralized autonomous organization is an emerging structure where there is no central governing authority. Members share common initiatives to act in the best interest of their organization.
The company centers around building Zero Interest Rate Lending protocols for cryptocurrencies and real-world asset (RWA) tokenization. Notably, 3A is protected by enterprise-grade security while establishing liquidity at a zero interest rate for your Web3 projects. The organization aims to ensure that RWAs have enough liquidity to generate enduring yields for asset holders. 3A offers you on-demand, low-cost liquidity while simultaneously establishing liquidity on DEXs, or decentralized exchanges.
The Chief Token Economist at 3A DAO, Michal, noted in our podcast that their product can provide a significant yield, up to 15%. He stated that essentially, 3A DAO is a “zero, recurrent interest liquidity protocol” which allows you to leverage your position without being subjected to recurring interest. Ultimately, the protocol wants to help you boost your yield.
Constellation Network and 3A DAO — building the Ethereum bridge.
The vision
In November of 2023, 3A DAO and Constellation announced their collaboration to shape the future of DeFi. DAG token holders were able to access 3A DAO’s 0% interest lending. This access was due to a grant from the Constellation Grant Foundation for a project to build a bridge between Hypergraph and Ethereum. 3A DAO’s protocol was also integrated into Constellation dApps like Lattice and Stargazer.
The grant program
Ben noted that the Constellation Network was contemplating a grant program for many years, having helped past companies take their ideas into Web3 and realize their vision. Ben saw Michal’s DeFi project as an opportunity to improve their ecosystem’s liquidity, discoverability, and token utility. This led to the creation of a structured grant program with clear milestones and deliverables.
By collaborating with Michal’s 3A DAO, Constellation Network established an agile framework for deploying grants to projects that enhance their business. This model incentivizes participation while linking rewards to performance. Additionally, Constellation can grant nodes to builders, allowing them to earn rewards while growing their project. This system emphasizes network utility and performance-driven support.
Furthermore, when evaluating grant recipients, Constellation Network focuses on two key things: building metagraphs for subnetworks and exploring meaningful data use cases. Interestingly, Constellation goes beyond traditional milestone-based funding. Instead, they use unique identifiers correlated to network activity to measure contribution and distribute grants in a scalable way. This applies to partnerships like 3A DAO, where increasing $DAG exposure within other ecosystems like Ethereum becomes a measurable milestone.
This new grant program opens up exciting possibilities for attracting valuable projects and fostering growth within the Constellation ecosystem.
Looking ahead: the Ethereum bridge
Michal Bacia, Co-Founder of 3A DAO, gave us some updates on how the Ethereum bridge project is coming along.
Proof of Concept
This phase focuses on testing the core functionality of sending and receiving data across the bridge, along with building a basic user interface and smart contracts. This phase aims to prove the technical feasibility and viability of the project. Michal stated that they have finished the design of the user interface on the backend.
Legal & Compliance
This next phase involves setting up the legal framework for the entity responsible for the bridge. Details include choosing a jurisdiction, establishing an entity, and ensuring compliance with regulations like KYC and MiCA. Currently, legal due diligence is underway, with Germany or Portugal likely to be the chosen location.
Security
3A DAO conducted a security audit for their existing contracts, but the bridge smart contract audit will take place in the second phase of the development. The audit found no high or critical security issues, and only one medium issue that was promptly rectified. Additionally, continuous API monitoring is provided by Hypernative to ensure ongoing security. The radar was built with security in mind, and user safety is the highest priority. These practices will be replicated when the bridge is deployed.
3A DAO Euro3
3A DAO has a service that monitors the price of their asset against the Euro. If the price deviates more than 2%, it adjusts the health factor for vaults, essentially controlling access to the redemption function. This safeguards the Euro peg even in low-liquidity situations. Extensive testing ensures the protocol can withstand market downturns and maintain stability. Currently, the price stays within the desired range, but tighter tolerance may be implemented with increased liquidity.
Constellation Network: Continuing to DeFi expectations
Ben, CEO of Constellation Network, expresses his desire for the DAG token to integrate with other ecosystems. He sees potential in exploring how these platforms incentivize and collateralize alternative assets, viewing it as a natural progression in financial innovation.
The CEO elaborated on his foray into the DeFi space, stating:
“I’ve always wanted DAG to get into other ecosystems as well, and especially some that are more focused on kind of the DeFi mechanics. When you think about it in that context of — how do you collateralize alternative assets? I think it’s really fascinating what the digital ecosystem brings to the table, not just the cryptocurrency as a whole, but also looking at how does every business out there run a treasury strategy with alternative assets? And then how do you collateralize those alternative assets? It’s a progression of finance.“
3A DAO emphasizes their focus on on-chain assets, including tokenized real-world assets (RWAs) once they become available. They express excitement about their partnership with Constellation Network to build a bridge that connects their token to the Ethereum mainnet. This bridge will also facilitate the transfer of other data-related assets across various metagraphs within the Constellation network.
What do you think about this collaboration? Let us know in the comments!
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