# What is DAG?

DAG is the native utility token of Constellation Network, serving as the foundation for its feeless, scalable, and decentralized ecosystem. Unlike traditional cryptocurrencies that act solely as a store of value or payment method, $DAG is designed to:

* **Secure the network** by incentivizing validators and delegators.
* **Power** [**metagraphs** ](https://docs.constellationnetwork.io/network-intro/what-is-a-metagraph)by covering snapshot fees for validation and storage.
* **Support ecosystem growth** through funding, development grants, and incentives.

As the economic engine of Constellation, $DAG ensures network security, sustainability, and long-term adoption.

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### **How DAG is Used**

#### **Powering the Network – Snapshot Fees**

Transactions on the Constellation Hypergraph do not rely on traditional gas fees. Instead, metagraphs pay snapshot fees in $DAG to validate and store data, enabling a scalable and feeless user experience.

{% hint style="info" %}
Learn more about how snapshot fees work with our paper [Network Fees on the Hypergraph](https://docs.constellationnetwork.io/network-intro/white-papers/network-fees-on-the-hypergraph)
{% endhint %}

**Securing the Ecosystem – Validators & Delegators**

Validators stake 250,000 $DAG per node to participate in securing the network and processing transactions. Non-technical users can delegate their $DAG to validators, earning passive rewards while contributing to network decentralization.

#### **Driving Ecosystem Growth – Grants & Incentives**

$DAG fuels ecosystem expansion by funding developer grants, open-source tools, marketing initiatives, and community rewards. This ensures continued innovation and adoption of metagraphs.

#### **Enabling Trading & Liquidity – Exchanges & DeFi**

$DAG is actively traded on 15+ centralized and decentralized exchanges, including PacaSwap DEX, where it powers token swaps, liquidity pools, and DeFi applications within the Constellation ecosystem.

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### **Sustainable Tokenomics: The Adaptive Supply Model**

<figure><img src="https://3208348562-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FpBDtrsB6CTph9ERYvdNO%2Fuploads%2F1njOpuZqtQFKiBEKDtcW%2Fimage.png?alt=media&#x26;token=1448dd58-930b-403d-9131-a462aec8813d" alt="" width="563"><figcaption><p>Summary of DAG tokenomics</p></figcaption></figure>

Unlike fixed-supply blockchains that can struggle with long-term sustainability, Constellation follows a **flexible supply model (Metanomics)** designed to:

* Continuously reward validators and delegators.
* Fund ongoing network expansion and innovation.
* Maintain decentralization and economic stability.

#### **Balancing Inflation & Deflation**

To ensure a sustainable ecosystem:

* **New $DAG is minted** at a controlled rate to reward network participants.
* **Snapshot fees paid by metagraphs are burned**, gradually reducing inflation.

This dynamic supply model incentivizes participation while keeping the token economy balanced.

{% hint style="info" %}
Learn more about how snapshot fees work with our paper [Metanomics](https://docs.constellationnetwork.io/network-intro/white-papers/metanomics)
{% endhint %}

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### **Feeless Transactions**

Most blockchains rely on gas fees, which can be costly and unpredictable. Constellation eliminates this issue by allowing:

* **Zero transaction fees for users.** Sending $DAG or interacting with metagraphs is completely feeless.
* **Custom fee structures for projects.** Metagraphs cover network costs, allowing developers to set their own pricing models.

This lowers barriers to entry for new users and businesses, making blockchain adoption more accessible and scalable.

***

### **How to Get Involved**

You can participate in the Constellation ecosystem today:

* **Delegate or run a validator node** – Help secure the network and earn rewards.
* **Hold, trade or use DAG** – Swap tokens, provide liquidity, and engage with DeFi applications.
* **Build with metagraphs** – Create scalable, decentralized applications using Constellation’s technology.