Considering that Josh is insistent on his original freelancer model, hyperspace would probably be a mod.
However, as corn and I have been bouncing this idea off each other, I feel Josh is mistaken, and going for a worse method than could be done.
But on the hyperspace concept, I had the idea for how to research and advance hyperspace related technologies, and also how to make hyperspace infinite without overwhelming LOD.
Study natural wormholes to make better artificial wormholes.
Study acceleration bridges in hyperspace to move faster in hyperspace
Study unstable wormholes to learn how to make artificial bridges
To make hyperspace infinite, add "depth" levels which trigger the engine to re-prioritize LOD processing distant places as more and more important
You need to do a sufficient amount of difficult, expensive, specialized research to unlock these greater levels of "depth"
First, we separate wormholes (doors) from movement within hyperspace. Wormhole generators are different than hyperspace drives. Wormhole generation technology affects the detection and creation of artificial wormholes. Hyperdrive technology affects the speed and freedom of movement within hyperspace and the ability to construct your own acceleration bridges. Hyperspace depth technology allows access to greater dimensions of hyperspace (see below)
In the beginning, there were only natural wormholes, they connect networks of systems but appear wherever the engine placed them. Any ship can traverse them, but they are restricted to the natural bridges in hyperspace and merely traveling along them causes some amount of damage to the ship. In this early period of wormhole tech, we see the basic idea of wormholes which Josh has created.
Wormhole tech can be studied on any research module anywhere, but unless this research module is close to a natural wormhole, it won't make any meaningful headway. As wormhole tech advances, it grants the ability to create larger and longer lasting wormholes. The earliest artificial wormholes might be able to create an opening into hyperspace that is open for a few seconds and could let the smallest ships through. But with more research, they can grow to let capital ships and then whole fleets through... Or the tech could advance along a different path, where the opening stays open longer, and can eventually be made permanent as it gains power from a gigantic dedicated wormhole module: the first Jumpgate. And of course as time progresses, those who do the most research on wormholes will have the largest, longest lasting wormholes and the smallest, most efficient wormhole generators.
Those first pioneers into hyperspace via artificial wormholes will find themselves facing a new challenge... They can barely move and can't find their way through the disorienting nature of hyperspace (graphical effects for human players, bad pathfinding for AI)
What they need is a Hyperdrive, the hyperspace equivalent of thrusters. To get these, research is done on those natural wormhole bridges between systems. A research ship must in fact be researching Hyperdrive tech WHILE it's riding one of these natural bridges to make meaningful headway on Hyperdrive tech.
When the first Hyperdrives come out, they will enable faster, safer travel on the hyperspace bridges which were previously causing damage during travel... But they will also enable slow movement in hyperspace even without an acceleration bridge. Just like jumping off a warp rail, they will be able to freely explore this new plane of the game.
As Hyperdrives advance, they will enable faster and faster movement and longer durations in hyperspace before the damage forces them to drop out. But once in open hyperspace, they will be able to made advancements which have hereto eluded them: artificial acceleration bridges.
Here they will discover that acceleration bridges are static fields of acceleration, just like the static nature of warp rails. But with those ever-present bridges on stable wormholes, they will never learn how the bridges come into being. What they need is an unstable wormhole, where the bridge appears and disappears, forms and collapses. Once they're out in free hyperspace, they can get close andstudy these bridges, and soon they can start to make their own.
The first artificial acceleration bridges will again like the first artificial wormholes be small, weak, temporary...and of course expensive. But as research on unstable wormhole bridges continues (which will take a long time because of the limited time a ship can stay in hyperspace) the artificial bridges will get stronger, last longer, and be able to carry more and more ships. With time, just like jumpgates, powered artificial hyperspace bouys will enable permanent bridges to be constructed from any system to any system. Those who advance Hyperdrives to this point will have an incredible advantage over the systems in their area, as they will have the ability to create highways between systems. And because hyperspace objects are invisible to those who haven't used them or gotten close enough to detect them, these can actually be secret highways.
Up to this point, I have been talking about cornflakes idea of a cluster, the small group of 10-100 star systems which for many people will make up most of their game. But as cornflakes suggests, clusters are merely neighborhoods in the infinite web of the LT universe, 1-3 orders of magnitude further apart than systems within a cluster are from each other. Clusters themselves are linked by much larger, longer, stronger natural wormholes and acceleration bridges. But here we would start to face problems with the engine and your computer's processing speed. Because the faster you can travel between ever more distant systems, your computer will at some point fail to keep up in its LOD simulations. To save us from the LOD failure caused by hyperspace I suggest a mechanic that I call hyperspace depth. By this I mean we treat hyperspace like the ocean, with shallow water near the continents and much deeper water beyond the continental shelf.
Using the metaphor of the ocean, Clusters are the shallow water where a bunch of little system "islands" pop out into normal space. At a shallow level of "depth" you are in the intracluster scale, where hyperspace travel is primarily between nearby systems. Travel between Clusters occurs at a greater "depth" and slows your travel exponentially. This can be overcome by going to a hyper-hyperspace; Let me explain.
The game engine optimizes LOD simulation by focusing on the player's current cluster giving only general LOD simulation to other Clusters nearby; it knows they exist, it knows the major players in the systems, the general tech levels, and relative strengths of the economies and militaries.
When you are in cluster A, Clusters B, C, D, and E are processed in this basic sense they are updated very occasionally, and in very broad terms, such as
Cluster B:Faction 12: economy+2%, tech: combat+5% movement+1% production+2% (war with Faction 17: 318 ships to 257 ships[Fac12 lose 45 ships, Fac 17 lose 97 ships, Fac 12 gain 4 systems]) and so on...
Taking place every few minutes so as to give a general history of economic, technological, and military changes.
Because of LOD limitations The game generally treats other Clusters as independent entities with 3 exceptions: When you are in a system with a trans-cluster wormhole, when a faction is a trans-cluster power, and when you are in trans-cluster hyperspace & are within a certain range of that cluster.
This Fuzzy Isolation is what allows the infinite living universe to continually change and evolve. What I mean when I say that this is overcome by going to hyper-hyperspace is to enter a plane which not only gives faster travel between Clusters, but actually alters the engines LOD priority. In normal space the activities of distant Clusters are always processed in the broadest of terms in long intervals - in level 1 hyperspace, distant Clusters are given a bit more detail and calculated more frequently - and in level 2 hyperspace, distant Clusters are given even more details and are given even more calculations.
The reason being that if you are in normal space, you chances of visiting a distinct cluster in the near future are very low (unless you're in a system with a trans-cluster wormhole) - if you are in hyperspace, your chances are an order of magnitude higher, so the engine should probably get on with making that part of the game more interesting at a higher pace - if you are in level 2 hyperspace, your chance of visiting a different cluster are actually quite high (because level 2 hyperspace has no other purpose than really fast travel), so it should be churning out histories and economies of the nearby Clusters before you get there.
Bringing this back to Hyperdrive technology, we add another area of advancement, hyperspace depth. In the same way research on wormholes, Hyperdrive speed, and artificial bridges required location specific research to make meaningful advances, so does hyperspace depth. If you want to advance your hyperspace depth technology, you conduct research in deep hyperspace on the edge of clusters (along the edge of the continental shelf in the ocean metaphor).
Unlike most LT research, hyperspace depth research has 2 phases (since we don't have distinct techlogies ala Civilization, star ruler, etc). In phase one, your research slowly raises a number from 0 to 1, where it serves as percentage speed bonus for hyperspace movement. Within a cluster this is very useful as it gives you two areas of research for increased speed. It will technically help you travel between clusters, but as the hyperspace-depth speed penalty increases exponentially, 200% normal speed won't help you much. Since meaningful advances in this field require research in deep hyperspace, this will be very expensive research, as you have already had to come a very long way from just using natural wormholes, and just getting to stay in hyperspace for a meaningful time took dozens or hundreds of advancements.
However, once you hit that set point, you unlock access to level 2 hyperspace. When you do, the engine trigger flips, and LOD in your current cluster goes down, and in the nearby clusters it goes up. We can imagine that timescales begin to change at the higher levels as well, so perhaps your meticulously micromanged empire down to the perfect balance of every module on every ship will be in jeopardy, especially if you start flying off into the deep universe.
But, once you are in level 2 hyperspace, the same rules that applied to level 1 hyperspace apply to level 2, With two differences. First, the game will start treating clusters of systems the same way it did normal-space systems; they become blobs like an asteroid zone (you could actually fly across an entire cluster in seconds before popping out again, btw). Second, to make meaningful headway in level 2 hyperspace, you have to start all over with your research, doing exactly the same stuff as when you first entered hyperspace. What's worse, these level 2 advances can't be translated down to level 1. So if you do 100 units of speed research in level 1, enter level 2, and 100 units of speed research in level 2, that doesn't mean you have 100 + 1000 units of speed research, you just have 100 in level 1, and 100 in level 2... This is mainly so you don't overwhelm intracluster LOD Limitations with exponential research.
Finally, in principle, this sort of hyperspace depth could be repeated and repeated until you're basically running the original worldgen algorithm, saving only scant details from your original normal-space world. If we so desired, we could create a new aspect of the game where extremely advanced cultures harvest entire clusters the way you normally harvest an asteroid, ultimately ending up back where you started, but with the ability to dive down back to normal space and be an outrageously powerful ship that appeared out of nowhere... Or so it seems to those simpletons.
At this level of hyper-hyper-hyper-hyper-hyper-hyperspace, the activities of normal space have been entirely erased and whole clusters or superclusters are just harvestable resources for a dimension beyond comprehension. This sort of play essentially turns LT into a Gurren Lagann simulator, where entire galaxies are used as ammo XD... Just a thought.