TL:DR
Livepeer is a video protocol built on Ethereum. Its goal is to deliver a fully decentralized video streaming network. The way it achieves this is by distributing the transcoding process to a network of node operators.
The transcoding process involves taking the video and optimizing the video so that it fits all formats of supported devices. The node operators are incentivized to do this via paid fees by the broadcaster in ETH. Further, any user that is part of the network can request to view the stream and it will be distributed to them automatically in real-time.
Livepeer token (LPT) is the protocol's native token. It has the following function within the Liverpper ecosystem: bonding, coordination mechanism, and serves as a unit of account.
Introduction
The vision to establish a decentralized web came to fruition through blockchains like Ethereum, decentralized storage platforms like Filecoin, decentralized name registries like ENS and a peer to peer digital currency like Bitcoin.
These projects are helping form the foundation for the web3. One area that is yet to be formally decentralized is media distribution. This is where Livepeer comes into play.
Video content over the web has increased exponentially since 2020. As a result of this, the creator-economy has also increased due to the demand and popularity for video content. Reports indicate that more than 82% of the web’s bandwidth is accounted by video content.
How Does Livepeer Work?
Livepeer seeks to deliver a fully decentralized video streaming platform. It seeks to connect anyone seeking streaming with suppliers. There are two major areas that Livepeer addresses which are the actual distribution of the live video from the source to the consumer and the economic incentives to encourage participation in the network.
At the core, the network allows any node to send live videos into the network, allows any node to request the video from the network, and allows participants to contribute their power in order to transcode and distribute the video.
In order to incentivize participation in the network, Livepeer utilizes its native token, Livepeer Token (LPT). This token is utilized in order to keep the transcoding process going, secure the network, and to keep it affordable when compared to current solutions.
Further, there are two main stakeholders in the network, orchestrators and delegators.
Orchestrators
Any person who operates video mining equipment can stake their LPT to perform video processing work on the Livepeer network. Anyone can become an orchestrator by running a software that allows you to contribute your computer resources such as GPU, CPU, bandwidth, etc.
To incentivize people for performing this duty, they receive a portion of the video processing fees in the form of ETH.
Delegators
Delegators on the network are those who do not have access to mining equipment but still want to participate in the network. They will stake their LPT to an orchestrator in order to help process videos.
What is Livepeer Token (LPT)?
Livepeer Token is the official token for the Livepeer network. As for its tokenomics, new tokens are minted every so called “round”. “Rounds” in this sense are measured in Ethereum. One round is equivalent to 5760 Ethereum blocks. This is how often you can expect to receive reward tokens.
Inflation
The current rate of Livepeer inflation is around 0.02615% per round. The inflation rate adjusts automatically based on the number of tokens that are staked. Currently there are around 13 million staked tokens or 50% participation rate which is the ratio between staked tokens divided by the amount in circulation.
What Is Livepeer 50% target rate?
Livepeer wants to maintain a target rate of 50% when it comes to network security and token liquidity. It wants to ensure that close to 50% of the supply is staked in order to ensure the security of the network. Therefore, in order to achieve this participation rate the network incentivizes participants to stake by increasing the inflation rate by 0.00005% for every round the participation rate is below 50%. Likewise, it will decrease it by 0.00005% for every round the participation rate is above 50%. This will help maintain a 50/50 balance on the network.
What are Livepeer’s Tokenomics?
There is currently a supply of 26 million tokens in circulation. As of September 1st, Livepeer tokens are worth $10 with a market cap of $245 million. The max supply of Livepeer tokens is not available.
Final Thoughts
Livepeer is the first decentralized live video streaming protocol. It seeks to be an alternative to current centralized video streaming solutions. It wants to become a viable blockchain that is economically efficient and secure.
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