In this paper, we study a practical yet challenging task, On-the-fly Category Discovery (OCD), aiming to online discover the newly-coming stream data that belong to both known and unknown classes, by leveraging only known category knowledge contained in labeled data. Previous OCD methods employ the hash-based technique to represent old/new categories by hash codes for instance-wise inference. However, directly mapping features into low-dimensional hash space not only inevitably damages the ability to distinguish classes and but also causes "high sensitivity" issue, especially for fine-grained classes, leading to inferior performance. To address these issues, we propose a novel Prototypical Hash Encoding (PHE) framework consisting of Category-aware Prototype Generation (CPG) and Discriminative Category Encoding (DCE) to mitigate the sensitivity of hash code while preserving rich discriminative information contained in high-dimension feature space, in a two-stage projection fashion. CPG enables the model to fully capture the intra-category diversity by representing each category with multiple prototypes. DCE boosts the discrimination ability of hash code with the guidance of the generated category prototypes and the constraint of minimum separation distance. By jointly optimizing CPG and DCE, we demonstrate that these two components are mutually beneficial towards an effective OCD. Extensive experiments show the significant superiority of our PHE over previous methods, e.g., obtaining an improvement of +5.3% in ALL ACC averaged on all datasets. Moreover, due to the nature of the interpretable prototypes, we visually analyze the underlying mechanism of how PHE helps group certain samples into either known or unknown categories. Code is available at https://github.com/HaiyangZheng/PHE.
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