LPT Inflation vs. ETH Rewards from transcoding

As an orchestrator/transcoder that is currently only doing CPU transcoding, I wanted to share my thoughts regarding yesterdays discussion in the community call.

Maybe a short recap: The LPT inflation is currently decreasing at a rate of 0.03 percentage points per round and will reach 0 in less than 7 months if nothing is changed. By then, an orchestrator’s revenue is solely dependent on the ETH rewards from its transcoding jobs.

One opinion is that this will be good for the network since it weeds out the orchestrators that don’t provide proper transcoding (which is what livepeer is all about in the end). One of those transcoders would be me at the moment :slight_smile:

I would love to help the network and provide some GPU transcoding, but as someone that doesn’t already have a mining rig, it just makes zero sense economically. I’m living in a flat, so setting up a few GPUs is currently not an option due to heat/noise. Colocation would be an option but for that to pay itself, the ETH rewards would need to be quite substantial first.

IMO, livepeer needs more supported devices, e.g. Intel QuickSync or AMDs Ryzen with integrated Vega GPU - that would at least give people like me the option to set up a small mini PC for some light transcoding while the ETH fees grow and a bigger investment becomes reasonable.
But what I would really love to see is support for devices like the nvidia Jetson Nano - a low cost, low power, passive cooled device that is capable to do 4k transcoding! This is something that almost everybody can afford and run and would allow Livepeer to grow a truly decentralized transcoding network all around the world. I for one would be happy to run a few of those (I do have a reliable 1 Gbit/sec up- & download connection).

Now let’s assume we have 0 inflation in 7 months but only a little bit of fees are generated. For many orchestrators it would not be worth it to invest in a transcoding setup. So most of the bonded LPT (also I would expect a large sell-off…) would end up with a few orchestrators that already have the setup (maybe because they’re also mining).
And once a good amount of ETH fees are generated, I see a chicken/egg problem: A new transcoder (that joins the network in maybe one or two years) does not get enough work because he does not have enough stake (because nobody will bond to him because he does not generate enough ETH fees…). So essentially he’s forced to “work” with an orchestrator that already receives transcoding jobs (and that can dictate the terms)?

Only a low number of supported devices, 0 LPT inflation and low LPT liquidity would increase this “centralization” of orchestrators.

So my opinion is to keep a healthy amount of LPT inflation until enough ETH fees are generated. In the short term, this might keep some “lazy” orchestrators running that don’t care about transcoding at all, but in the long term Livepeer would end up with a more decentralized set of orchestrators.


support for devices like the [nvidia Jetson Nano---- a low cost, low power, passive cooled device that is capable to do 4k transcoding!

I don’t think you need to acquire a full rig.

I acquired a 2 GPU rig using 2nd hand GPUs (from a gaming team so no mining or whatever done on them) for less than 1000$. Some googling allowed me to uncap the session limit on consumer grade nvidia GPUs for encoding video.

The amount of concurrent streams I can transcode should be sufficient for the first couple of months of real demand into the network if other operators do the same thing.

Nontheless I’m in the same boat as you. I live in an appartment, power is expensive here and bandwith and fixed IPs isn’t the cheapest either (thank god I can run my remote transcoder on a dynamic IP and run my O from a datacenter). Therefore I searched for other ways to gain a competitive advantage over operators that do have the necessary resources to fund large operations and I came up with Livepool.

Creating a public transcoding pool is challenging , even when one has good knowledge of the livepeer codebase but perhaps there’s other things you can do such as work with mining rig operators on a contract basis and they have to meet certain SLA Requirements. That’s much easier than trying to run a public pool without SLA guarantees.


I did like @Gavin 's proposal during the call. An LPT inflation curve that is based on the amount of fees flowing through the network. I’d have to look at the protocol but this maybe even be an implementable option (or a combination of participation and then providing a base inflation rate if there aren’t enough fees on the network).


But what I would really love to see is support for devices like the nvidia Jetson Nano - a low cost, low power, passive cooled device that is capable to do 4k transcoding!

This is the finest idea I have heard in Livepeer Community for a looong time! The ability for each of us to add our own physical hardware to transcode video feels like an ideal way to build the network in a decentralised permissionless way, whilst dogfooding things for ourselves.

This is especially in a context where DAppNode, Ethereum, and other projects are looking to arm as an alternative to amd64, as a way to empower self-hosting instead of “just run it on Amazon”.

But in some ways, there is a question of prioritisation between “building for big mining farms to get volume” vs. “building for small independent startup operations for get decentralisation”. I expect that Inc. might tend towards the former given their current plans for bringing on scale.

Perhaps then this is something for the community to pick up, perhaps with backing from some community grants? After all, the community is the pure decentralised / permissionless part of the project… perhaps building on the work being done by videoDAC with Livepeer / ARM


I acquired a 2 GPU rig using 2nd hand GPUs (from a gaming team so no mining or whatever done on them) for less than 1000$.

At that price point, I would need to do a bit more research to feel confident I would know what I’m doing. Plus, the awareness of whether the exact custom hardware I am buying is compatible with this nascent tech. Also, a rig sounds unpleasant. Better to get a nice case and it can sit under the TV (or better, inside the TV!).

If these things could come with $100 price tag, and be “certified” to work (whatever that means), perhaps even with custom OS image build - so you can just write the image to the SD card, plug it in, turn it on, create your keys, then Invoke multi-step "become an orchestrator". I’d get one for my Dad.

They could even run in Transcoder-only mode, just select which Orchestrator you want to contribute your GPU cycles to (for love, not money!), then put in an -orchSecret.