Livepeer

The core computational task of the Livepeer network. Transcoding converts a single source video stream into multiple renditions (bitrates, resolutions, formats) for adaptive bitrate streaming. This is a computationally intensive process that is decentralized across orchestrators.

• Purpose: Enables playback on any device and network condition.
• Example: Converting a 4K H.264 stream into 1080p, 720p, and 360p versions in H.264 and AV1 codecs.

Livepeer Token (LPT) is the network's work token, secured by Ethereum. It is used for staking to coordinate and secure the network's labor market.

• Orchestrators stake LPT to signal reliability and earn fees.
• Delegators stake LPT to orchestrators to earn a share of rewards, securing the network through Delegated Proof of Stake (DPoS).
• Staking influences job distribution and slashing penalties for misbehavior.

The two primary participant roles in Livepeer's Delegated Proof of Stake (DPoS) consensus and work coordination system.

• Orchestrator: Node operators who perform video transcoding work. They stake LPT, broadcast a service, and are assigned jobs by the protocol.
• Delegator: LPT holders who stake their tokens to an orchestrator they trust. They share in the orchestrator's rewards without running infrastructure, contributing to network security.

The users of the Livepeer network who pay for and consume its services.

• Broadcaster: An entity (e.g., a streaming app) that submits video jobs and pays fees in ETH or stablecoins. They are the network's customers.
• Consumer: The end-user who watches the stream. They interact with a broadcaster's application, not directly with the Livepeer protocol. The network's value is delivering a seamless, low-cost viewing experience.

Livepeer's initial, innovative token distribution mechanism that bootstrapped the network's decentralized node operator set. It replaced traditional mining with a useful proof-of-work.

• Participants ran software that generated Merkle tree proofs, earning LPT for contributing verifiable computational work.
• This successfully distributed tokens to a wide set of early operators, ensuring no single entity controlled the initial supply or infrastructure.

Beyond live streams, the network processes Video-On-Demand content. This includes transcoding uploaded videos for platforms like decentralized YouTube alternatives, NFT marketplaces with video assets, or educational content platforms.

• Workflow: A dApp uploads a master video file to decentralized storage (e.g., IPFS, Arweave), then submits a job to Livepeer to create optimized streaming versions.
• Integration: Often combined with storage and CDN layers (like Filecoin, Arweave, or Spheron) to create a full decentralized video stack.

The Livepeer network is secured and coordinated by its native LPT token, which aligns incentives between three key participants:

• Delegators: Stake LPT on orchestrators to earn fees and inflation rewards, securing the network.
• Orchestrators: Node operators who perform transcoding work; they stake LPT, earn fees, and share rewards with their delegators.
• Broadcasters: Pay for transcoding services using ETH or stablecoins, which are distributed to orchestrators.

This proof-of-stake model ensures reliable service and decentralized governance.

Livepeer is expanding its decentralized compute network beyond video to support AI inference and training tasks. By leveraging its established network of GPU operators, it aims to become a marketplace for general-purpose, cost-effective GPU compute.

• AI Video Generation: Early use cases include generating and upscaling video content using models like Stable Diffusion.
• Scalable Compute: The same infrastructure that parallelizes video transcoding can be repurposed for batch AI jobs, creating a new utility for the LPT token and node operators.

Livepeer's consensus and security are underpinned by a Delegated Proof-of-Stake (DPoS) mechanism. Token holders (delegators) stake LPT to validators (orchestrators) who perform transcoding work and produce blocks. This creates economic security where malicious behavior, such as submitting invalid work, can lead to slashing of the orchestrator's and its delegators' staked LPT. The network's security budget is directly tied to the total value staked.

Video transcoding jobs are distributed across a permissionless network of orchestrator nodes. Broadcasters can choose orchestrators based on performance, price, or geographic location. This decentralized workforce prevents any single entity from controlling video processing infrastructure or censoring streams. The protocol's design incentivizes a globally distributed set of nodes to compete for work.

To ensure computational integrity, Livepeer uses cryptographic verification of transcoding work. Orchestrators must submit a Merkle root of the output segments as part of their on-chain claim. Other network participants can perform verification-by-challenge, downloading a small random segment to check its validity. Fraudulent claims can be disputed and slashed, making cheating economically irrational.

Orchestrators must bond LPT to participate, aligning their economic interest with the network. The protocol uses a bonding curve model to manage orchestrator set size and reward distribution. New orchestrators join at the end of the curve, requiring more stake for the same reward share, which discourages Sybil attacks and promotes stake consolidation among reliable, high-performing nodes.

For broadcasters, security means reliable, tamper-proof delivery. Livepeer provides cryptographic guarantees that the processed video matches the original input. Broadcasters use a scorecard to select orchestrators, factoring in past performance, fee cuts, and reward calls. They can also implement multi-orchestrator strategies for redundancy, ensuring stream continuity even if individual nodes fail.

Network upgrades and parameter changes (e.g., inflation rate, slashing penalties) are managed through on-chain governance. LPT stakers vote on Livepeer Improvement Proposals (LIPs). This decentralized governance model ensures the protocol can evolve in response to security threats or market changes without relying on a central development team, though it introduces coordination challenges typical of DAOs.

Transcoding is the core computational process of converting a video file or live stream from one format to another. In Livepeer's context, it involves:

• Taking a single high-quality source stream from a broadcaster.
• Creating multiple adaptive bitrate (ABR) renditions for different devices and network conditions.
• This is computationally intensive and is the primary service the decentralized network provides, replacing centralized cloud providers like AWS MediaConvert.

A Delegator is an LPT token holder who stakes their tokens towards an Orchestrator they trust, without running a node themselves. This action:

• Secures the network by increasing an Orchestrator's total stake, which influences its work allocation.
• Earns the delegator a proportional share of the Orchestrator's rewards (inflationary LPT and fees).
• Involves risk, as poor Orchestrator performance (e.g., downtime) can lead to slashing of staked tokens.

A Broadcaster is an entity (e.g., a streaming app, developer) that pays to use the Livepeer network for video transcoding and distribution. They:

• Send source video streams to the network via the Livepeer API or SDK.
• Pay for the service using ETH or stablecoins on a per-second or per-unit basis.
• Receive transcoded, multi-format streams delivered via a CDN for playback on end-user devices.

LPT is Livepeer's native ERC-20 utility token with a dual-purpose mechanism:

• Work Token (Staking): Orchestrators must stake LPT to perform work, and delegators stake to back them. This stake secures the network and dictates reward distribution.
• Protocol Token (Governance): LPT holders can participate in governance votes to decide on network upgrades and parameter changes. It is distinct from the ETH or stablecoins used to pay for transcoding services.

Video Mining is the process by which Orchestrators earn rewards for contributing GPU resources to the Livepeer network. It involves:

• Earning fees in ETH from broadcasters for transcoding work.
• Earning inflationary LPT rewards, distributed proportionally to participants based on their stake and work performed.
• This creates an incentive model where participants are rewarded for providing a useful service (transcoding) and securing the network (staking).