Livepeer Network Economics Update - 1/4/19


Happy New Year! It’s been awhile since we looked at the network economics, so let’s give it a review as of 1/4/2019.

The Livepeer network is currently in round 1216 which is the 256th round since the launch of the network on May 1st 2018 which was round 961. Below are the latest observations on the state of the Livepeer network economy:

Parameter Value Notes
Total LPT Supply 11,353,567 The total supply of LPT
Total LPT Generated 1,353,567 The amount of inflationary LPT that has been generated by calls to reward() by transcoders and distributed towards those who stake and delegate their token. This amount is in addition to to the initial supply of 10,000,000 LPT at network launch which is being slowly released over a 36 month period via the MerkleMine and vesting grants
Total LPT Staked 2,782,463 The amount of LPT that is currently staked
Participation Rate 24.51% The percentage of all LPT that is being staked. The target rate is 50% which should take at least 12-18 months to approach due to the slow release of LPT in the MerkleMine
Inflation 0.0902% The current per round inflation rate. Every round that the participation rate is below 50%, the inflation rate will increase by .0003%
Current Mintable Tokens 10,231 The amount of LPT that can be minted this round and distributed towards those who contribute work on the network by staking and delegating tokens
Minimum Active Transcoder Stake 34,422 The amount of delegated plus self staked LPT that a transcoder must have to break into the top 15 and become active.

Transcoder Performance


The Livepeer transcoder dashboard now includes a statistic about how reliably each transcoder has called the reward() transaction over the past 30 rounds. This is important because when a transcoder misses a reward() call, its delegators do not receive their inflationary LPT for that round. When the feature was introduced, the good news is that many of the transcoders were highly reliable, missing between 0-4 reward calls over the last 30 rounds. However, after the introduction of this visible features, transcoders have become noticeably more reliable and vigilant, with many of the top transcoders going a perfect 30 for 30 after the feature’s introduction. In fact, 14 of the transcoders in the top 15 have combined to miss only 4 calls out of a possible 420, meaning most LPT is being distributed as planned.

The lone exception here is node 0x43793ab4a56e5d4c263e6320d59072e01819b6c9, which has missed 20 out of the last 30 reward calls, and is foregoing quite a bit of LPT in the process for themselves and their delegators.

Streamflow and the Decentralization of the Transcoder Pool

The core team was hard at work towards the end of 2018 on the research, design, and early implementation of the Streamflow scaling proposal, aimed to make the network cost effective, reliable, and scalable, beyond the early alpha implementation that exists today.

One of the major benefits of Streamflow will be staking and protocol implementation updates, that allow the transcoder pool to grow from only 15 active transcoders to hundreds of active orchestrators. (Note, “Orchestrator” is a new term introduced in order to separate the roles of protocol aware nodes who coordinate and prove work, vs the actual machine processes that perform the transcoding work.) Currently, a node must amass over 34K worth of staked LPT to break into the active set, which is a very high barrier to entry, and becomes increasingly higher every day. Streamflow proposes to introduce a fixed, known amount of stake, whereby any node looking to become an active Orchestrator can achieve that amount of stake, and then advertise their services on the network.

In the meantime, it’s debatable as to whether the network would benefit from temporarily expanding slightly beyond the current limit of 15, prior to Streamflow’s mainnet rollout, and there may be community proposals and calls for feedback on this issue in the coming weeks.

Participation Rate
There’s a nice symbolic milestone coming up, of 25% participation (currently 24.5%). The protocol’s target is 50% participation, at which point the inflation rate begins to tick back down as long as the target continues to be exceeded. At the current pace of staking and inflation, it is likely that this target will be achieved in late 2019. It will be interesting to see how users choose to remain staked vs unbond some LPT however in order to fund their operations, especially as Streamflow rolls out, which should drive increased usage of the network, requiring more costs to operate successful Orchestrators/Transcoders and compete in the open marketplace.


Thanks for the update :smiling_face_with_three_hearts: