The L0 token standard is a key milestone in the Mainnet 2.0 roadmap.
First things first… what does this really mean for the Constellation ecosystem?
It means that — because of the technology Constellation is building — businesses with thousands or even millions of customers can now seriously consider building decentralized solutions and incorporating crypto token transactions into their business models.
Why? Because Constellation offers a platform with state channels and an L0 token standard that can handle the load, perform seamlessly under the covers, and scale with the businesses. (It can do lots of other cool things too, but we’ll get to that later.)
Building the stakeholder economy.
This means that for the first time ever.. you and me and others who may have no idea what the blockchain is, can soon interact with new applications on the Internet or on mobile devices that can give us cryptocurrency rewards in exchange for our engagement or our data.
Whatever we give to businesses that they value — our data, our attention, our reviews — we get paid in return. New economies can form around communities with individuals participating and sharing in the wealth so everyone wins.
Sound pie in the sky? Well, maybe — but the stakeholder economy is a real thing and it’s growing. We have only lacked the platform to support it all. But not for long.
Hello Hypergraph, where have you been all my life?
Now for some technical stuff…While most blockchains are layer one or two solutions, Constellation’s Hypergraph network is a complete redesign of the blockchain infrastructure using a “directed acyclic graph” (DAG) architecture operating on Layer 0. Layer 0 is an underlying data transfer layer with an infinitely scalable node structure that supports fast and efficient global consensus.
Constellation uses an ingenious “state channel” model operating on a layer above the Hypergraph (Layer 1). Just as the Hypergraph network is the evolution of the blockchain, the state channel is the evolution of the smart contract.
State channels support all types of business transactions that can interact with the underlying network as needed to give users the best of both worlds: customized blockchain-enabled business solutions running on a feeless decentralized network that is fast and infinitely scalable.
From Constellation’s whitepaper: “Constellation enables anyone to tap into a cryptocurrency ecosystem and integrate blockchain technology into existing systems and applications through our state channels and L0 standard. Existing token standards allow you to create and mint a cryptocurrency, but have zero built-in accountability and business logic. Typical smart contracts are not integratable into existing systems and applications and only support simple data structures and logic with limited permissions. This is why Constellation provides a superior solution…”
With all that said — the Hypergraph network has zero transaction fees to use it. This makes it work with the stakeholder economy. People don’t have to worry about paying random fees to use this toll road, which makes it easy for businesses to align incentives with the value they get from your data.
So what is the L0 Token?
L0 (L Zero) is the token standard for utility tokens built on Constellation’s Hypergraph network, just as ERC-20 is the standard for tokens built on the Ethereum network.
L0 tokens are the cryptocurrencies that run on the various state channels, and each business on a state channel can mint its own L0 token.
L0 tokens can be used to transact or conduct commerce within the state channel, to reward users for completing various tasks, or to exchange any type of value within the state channel ecosystem. L0 tokens can even be used in non-financial ways such as validating data from IoT devices.
And the Hypergraph supports bridges between state channels for seamless L0 token interoperability and zero swap fees. This means that businesses operating state channels with L0 tokens can share data with one other and benefit from the generative economics that the Hypergraph supports.
Why would a business mint an L0 Token?
Truly the question is “Why would a business not mint an L0 token?” If you run a business on the blockchain with thousands of users transacting within your ecosystem, you can’t afford to have slowdowns and exorbitant transaction fees.
When users engage with a mobile app or conduct transactions on the Internet, the network they transact on should be invisible. Token transactions should be fast and free, and as the number of users increases, the app should continue to function at peak performance.
This is all possible with the L0 token. The Hypergraph is a feeless network, fast and infinitely scalable. The L0 token running in a state channel on this network empowers businesses to do all sorts of things they could never do before.
Who is already building on the L0 standard and how can I get involved?
Constellation has a robust accelerator program for legacy businesses and entrepreneurs who want to join our ecosystem and build state channels with us on the Hypergraph.
We educate them about all things blockchain and minting an L0 token. We introduce them to our community and launch their tokens on our Lattice Launchpad.
Our current ecosystem partners are knocking it out of the park with projects to power the creator economy, prevent advertising fraud, and even build a patented healthcare exchange that rewards individual contributors with personalized healthcare solutions and cryptocurrency incentives (more on this to come in the future!).
And this is only the beginning! Many more amazing projects are in queue to build amazing things and co-create the new economy with us and our community.
Where are we now?
We’re now moving into Phase 2 of our Mainnet 2.0 roadmap with L0 token development and the launch of our testnet.
During this time, we’ll also be:
- Onboarding additional testnet nodes.
- Onboard L0 tokens to establish the path to cross-chain swapping.
- Conducting a third-party security audit.
- Stress-testing the network.
L0 will support a robust ecosystem that empowers datapreneurs, entrepreneurs, and legacy businesses as crypto economies become a viable consideration for exciting new opportunities.