Today, video streaming is more popular than ever. For companies, this has led to escalating costs in streaming quality video, as streaming requires transcoding to create a high-quality video viewing experience for all viewers. Video broadcasters have to grapple with high transcoding costs that are only increasing with the advent of 4K videos and VR streaming. That’s where Livepeer comes in.
Livepeer aims to make video streaming more decentralized, which helps reduce costs. The Livepeer token (LPT) is an important part of that process, as it helps power the network.
What Is the Livepeer Network?
Livepeer is an open-source project founded in 2017 by Doug Petkanics and Eric Tang. It’s a decentralized video streaming and transcoding platform that allows anyone to launch their live video or on-demand video services at a lower cost.
The Livepeer network is powered by the LPT token, which incentivizes users to run nodes on the network that help power it and make it more decentralized.
The network is designed to be easily scalable and support a large number of users. One of Livepeer’s key benefits is that it helps reduce the costs of streaming video as it allows anyone to contribute their computer resources, such as CPU, GPU and internet bandwidth for transcoding.
How Does the Livepeer Network Work?
Livepeer has a two-layer consensus mechanism. The first layer, where transactions are made, is based on the Ethereum network, and the second is based on the delegated proof of stake (DPoS) system.
The two main actors on the network are orchestrators and delegators. Orchestrators run nodes on the network to transcode and distribute video streams. They can also choose to concurrently mine for ETH while performing transcoding. Delegators stake tokens on orchestrators to help secure the network.
Orchestrators receive rewards in newly minted LPT, as well as ETH fees from the network. A share of the LPT rewards and ETH fees are also paid to delegators who have staked LPT tokens on the orchestrators.
What Is the Livepeer Token?
LPT is the native cryptocurrency of Livepeer. As a staking token on the second layer of the consensus mechanism, it rewards users who contribute their computing resources to power and secure the network. It is not, however, a medium of exchange in the network, which is a role fulfilled by ETH instead in the first consensus layer.
As mentioned earlier, orchestrators and delegators are rewarded with newly minted LPT for their contributions to the network.
LPT is minted in “rounds” and distributed to orchestrators and delegators in proportion to the amount they’ve staked. One round equals 5,760 Ethereum blocks. A new round of LPT is minted every time a user broadcasts a video on the network. LPT is inflationary, and the amount of new Livepeer tokens minted in each round is determined by the inflation rate, which the Livepeer protocol sets.
Livepeer has a current inflation rate of 0.02375%. This means that for every video broadcast on the network, 0.02375%% of the total supply of LPT is minted and distributed to nodes. The inflation rate adjusts according to the amount of LPT staked out of the total circulating supply.
As the network grows, the inflation rate will increase by 0.00005% for every round until the total amount of LPT staked reaches 50%. Once it hits 50%, the inflation rate will be reduced by 0.00005%.
To earn LPT rewards from the network, you’ll first need some LPT tokens for staking. All you need to do is buy Livepeer tokens and hold them in your crypto wallet. LPT is an ERC-20 token, so it can be stored in any Ethereum-compatible wallet, such as MetaMask or MyEtherWallet.
Livepeer Token Price Prediction
Although Livepeer (LPT) is still in its early stages, it has a lot of promise, especially as it continues with its development efforts. Investors’ confidence in the token is evident from its price history, with a peak of close to $100 during the latest crypto bull run. Though LPT has since dropped to about $8 with the crypto market crash in early 2022, as the platform grows and matures the price of LPT will likely rise again.
In the short term, the price of LPT will be influenced by the overall cryptocurrency market. In the long term, the price of LPT will be determined by the success of the Livepeer platform.
While there’s no guarantee that the price of Livepeer will go up, it’s a good investment.
There are a few reasons why. First, current video infrastructure is centralized and controlled by a few large companies. This results in high fees, slow speeds and poor quality.
Livepeer is building a scalable, decentralized video infrastructure that will be faster, cheaper and more reliable, which will make it easier for individuals and businesses to create and stream videos.
Livepeer has also moved beyond simply providing decentralized video transcoding and distribution services. The company now has a Livepeer Studio, which acts as a bridge between its decentralized transcoding service and web2 video apps. The Livepeer Studio focuses on web3 video projects which let you livestream a video, store your favorite video in a decentralized network and even mint a video NFT.
Many experts understand the benefits that Livepeer can bring to the video broadcasting industry. Price Prediction is particularly bullish on the token, expecting it to cross $30 by 2025, an over 200% increase from its current price of $8.62 (October 13, 2022). DigitalCoinPrice, while anticipating a price rise as well, is relatively more conservative about Livepeer’s growth, predicting it to be just slightly above $20 by 2025.
The Bottom Line
Livepeer’s decentralized network enables you to provide reliable, affordable video streaming and processing services. LPT is the key to unlocking the power of the network and, with it, the potential to revolutionize the video transcoding process. The Livepeer team also aims to expand its services out of video infrastructure, which underlines the potential of the protocol to become a prominent player in the video broadcasting industry.