Directed Acyclic Graph (DAG)
By CoinGecko | Updated on Mar 03, 2020
Directed acyclic graphs refers to a data structure that is built in one single direction, yet branches out and never repeats.
Directed = Connections between two points (nodes) have directions such that A -> B is not the same as B -> A.
Acyclic = Opposite of cyclic where you’ll end up where you started from after some time. In an acyclic system, you’ll never encounter the same point (node) twice.
Graphs = A structure consisting of points (nodes) that are connected.
Compared to a regular blockchain data structure which operates in one straight chain, DAG based systems have more breadth as the network is similar to a expanding tree rather than a straight chain.
Related Terms
Market Maker
Participant of the market who creates buy and orders
Soft Fork
A backward-compatible update to a decentralized blockchain protocol.
Trustless
Entirely verifiable, without needing to trust or assume an action is done completely and in good faith.
Yield Farming
Yield farming involves putting cryptocurrency into a DeFi protocol to collect interest on trading fees.
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