Author: Lisa, LD Capital

I. Project Introduction

Livepeer is a decentralized video streaming network built on Ethereum. As a scalable platform-as-a-service, it provides a solution in the decentralized development stack for real-time media layer to developers who want to add live or on-demand video to their projects. Livepeer can improve the reliability of centralized broadcasting services' video streams while reducing associated costs by as much as 50 times. Currently, video streaming consumes 80% of all internet bandwidth, and companies distributing videos on the internet need to transcode the videos (transcoding refers to the process of obtaining the original video file and reformatting it to ensure the best viewing experience, regardless of whether 2G or 5G bandwidth or different devices are used). Livepeer can significantly reduce the costs in this area. The following example illustrates how Livepeer operates.

Alice is an application developer who is using Livepeer to add real-time video functionality to her high school sports event live streaming app. Bob, as the event coordinator, is responsible for using Alice's app to live stream his high school's basketball game. When Bob opens the app and starts recording, the app sends the real-time video and live streaming fees to the Livepeer network, while Livepeer transcodes the video into a form that the audience can receive.

There are two main roles in the Livepeer network to ensure the quality of live streaming: Orchestrators and Delegators. Anyone can join the network and become an "Orchestrator" by running software that allows them to contribute their personal computer resources (CPU, GPU, and bandwidth) for transcoding and distributing videos to earn fees. To have the right to do this work on the network, one must own Livepeer tokens, or LPT. The purpose of Livepeer tokens is to coordinate, guide, and incentivize participants to ensure that the Livepeer network is as cheap, efficient, secure, reliable, and useful as possible. Delegators are Livepeer token holders who participate in the network by "staking" tokens to Orchestrators. When broadcasting companies pay fees to the network, both Orchestrators and Delegators receive a portion of these fees as a reward for ensuring a high-quality and secure network.

II. Token Economic Model

The LPT token is in a fully circulating state with a market value of 219 million USD, ranking 143rd.

In Livepeer, new tokens are minted in each round and allocated to Delegators and Orchestrators. Here, rounds are units measured in Ethereum blocks, with one round equaling 5760 Ethereum blocks. The average block time in Ethereum is 14 seconds, meaning a round lasts approximately 22.4 hours. The current inflation rate of LPT is 0.03165%, with a total supply of 28,904,976.38 Livepeer tokens. The next round will reward a total of 9,264.04 newly minted Livepeer tokens to all participants, equivalent to approximately 70,000 USD. Based on the current inflation rate, the corresponding annualized inflation rate is approximately 12%.

The Livepeer inflation rate will automatically adjust based on the staking rate, which is currently at 44.72%. Livepeer refers to this as the "participation rate." Livepeer assumes a healthy compromise target ratio of 50% between network security and token liquidity. When the participation rate falls below this level, the inflation rate for each round will increase by 0.00005%, and when the participation rate exceeds this level, the inflation rate for each round will decrease by 0.00005%.

III. Financing Information

LPT is also one of the currencies held by Grayscale Funds. As of September 1st, Grayscale holds 4.108 million USD worth of LPT, ranking 10th among 14 currencies.

IV. Price Performance

LPT was launched in 2018, with the highest price occurring in November 2021. The current price has dropped by 92.3% from the highest price.

The recent market trend began on August 7th this year, with LPT rising from 4.98 to 5.87 in a single day, a 43% increase. On August 13th, it reached a peak of 9.26, doubling in a week. At 9:30 this morning, it surged 12% in 15 minutes, but has not yet broken through the previous high. Although the price is attempting to challenge the $8 mark again, the open interest of LPT contracts is relatively low since the start of this market trend, and the increase in open interest has not accompanied the rise in price. The funding rate has now dropped to below -1%, with the long/short position ratio and the large account long/short ratio falling to 0.81 and 0.72, respectively.

On the same day the market started, large transfers of on-chain data were observed, and the frequency of on-chain transfers in August was significantly higher than in the previous period.

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