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Introduction to Theta Network (THETA): Top NFTs & Collectibles Token

UTC by José Oramas · 11 min read
Introduction to Theta Network (THETA): Top NFTs & Collectibles Token
Photo: Shutterstock

Find the details on Theta – a decentralized streaming network that aspires to improve the streaming market efficiency by streamlining the video delivery process.

Since YouTube and other similar platforms have emerged, video streaming has become widely popular. But despite their popularity, streaming services face numerous problems, such as the cost of Content Delivery Network (CDN) and “last-mile” delivery issues. High-resolution streams like 4k or 8k usually cause a higher cost of CDN, but the last-mile problem still remains. To handle these issues, Theta platform with its native THETA token was created.

Theta Overview

Theta is an end-to-end decentralized platform for video streaming designed to solve the typical issues in traditional content delivery platforms by introducing tokens as the main incentive for users. Viewers share their computing resources and bandwidth in the network, improving video quality and engaging users in streaming services. As a result, a fully decentralized ecosystem for video streaming with sufficient network density appears.

Powered by users and an innovative new blockchain, Theta provides a decentralized streaming network and allows for vertical decentralized apps (DApps) to be built on top of the platform, enabling esports, music, TV/movies, education, enterprise conferencing, peer-to-peer streaming, and more. It also has its native Theta token.

Theta aspires to improve the streaming market efficiency by streamlining the video delivery process.

Theta Founders

Mitch Liu and Jieyi Long founded Theta back in 2018. Both of them have gained rich experience in the field of gaming and programming. In 2007, Mitch co-founded Tapjoy, Inc., becoming the pioneer of social and mobile video advertising. In 2010, he co-founded Gameview Studios that later became famous for Tap Fish, one of the first free-to-play mobile games on iOS and Android. As for Jieyi Long, he co-founded SLIVER.tv, the next-generation eSports entertainment platform, as well as MadSkill Game Studios.

Theta has a broad team of professionals dedicated to making its network fully decentralized. The platform has grown to be one of the most lucrative projects in the video streaming industry. It has attracted prominent investors such as Samsung Next, Sonny Innovation Fund, BDMI Bertelsmann, CAA Creative Artists Agency, Silicon Valley, Sierra Ventures, and VR Fund.

The Key Features of Theta

The key features that make Theta unique include a decentralized streaming network, reduced cost of Content Delivery Network (CDN), peer-to-peer (P2P) video delivery, market efficiency, proof-of-stake (PoS) consensus, resource-oriented micropayment pool, Proof-of-Engagement, and Theta Virtual Machine (TVM).

  • Decentralized Streaming Network

With the Decentralised Streaming Network, streamers publish their content to the ingest nodes that run on computers distributed by Theta community. Then, the ingest nodes transcode the video stream to different resolutions. Finally, the caching nodes pull the video streams and relay them to end viewers.

Anyone on Theta can contribute to the network using a computer to act as a caching node, by running video caching software. This software chooses the upstream node to relay the video stream to the downstream nodes, similar to peer-to-peer (P2P) transaction systems, but with extra latency, prioritizing urgent packets due to the real-time nature of live streaming.

  • Reduced Cost of CDN

To reduce the cost of the Content Delivery Network (CDN), Theta is encouraging users to participate in the network by providing computing and bandwidth resources. Later, they receive Theta tokens.

  • P2P Video Delivery

By sharing their resources, users can connect directly to influencers, thus creating a decentralized peer-to-peer streaming platform. Each peer node can act as a viewer, a caching node, or both. When a node launches, it retrieves a list of neighbor peers from the server for the current live stream.

Later, the node performs a test that usually the client conducts during a live session. This test consists of a speed and availability check. The server chooses a subset with a great overall performance in order to provide steady stream segments.

  • Market Efficiency

The Theta token streamlines the video delivery process, improving market efficiency. Besides, advertisers can directly target their audience and create ads specifically designed for them. If viewers are pleased with an influencer’s work, they can send Theta Tokens to them as a gift. Viewers are rewarded with Theta for the time they spend engaging with their favorite content.

Moreover, users can act as dedicated relay nodes with the latest update of Edge Cacher, the Edge Node. This application rewards users with Theta Fuel (TFUEL) for relaying video streams over the Theta Network. Users can also distribute their own live streams over the network.

  • Proof-of-stake consensus

Theta uses a proof-of-stake (PoS) mechanism, an alternative to proof-of-work (PoW) to achieve distributed consensus. The PoS consensus allows many devices to act as viewers and caching nodes.

  • Resource-Oriented Micropayment Pool

The Resource-Oriented Micropayment Pool is an off-chain micropayment platform for video streaming. Unlike traditional off-chain payment channels, it allows users to create a flexible double-spend resistance pool that allows them to make withdrawals from off-chain transactions.

The Resource-Oriented Micropayment Pool improves the scalability of the blockchain by replacing on-transactions with off-chain payments. Users can pay for video content directly from multiple caching nodes without using on-chain transactions.

  • Proof-of-Engagement

To record video stream data, Theta introduced a unique feature – Proof-of-Engagement (PoE). The micropayment system is leveraged to track the delivery of the video segments, as each payment for a video segment is linked with the ID of the video.

The micropayment is recorded on the blockchain, so every record is a video segment delivered to end viewers. These micropayment records can be used as PoE. In essence, the PoE mechanism allows the platform to detect which viewers are fully consuming the video streams. The token works as an incentive mechanism for viewers for their engagement with the content.

PoE also allows advertisers to measure the engagement of their viewers. Advertisers can reward viewers with tokens for their attention to video streams. As PoE are inferred from transaction data, validators of the Theta blockchain can reward content creators automatically.

  • Theta Virtual Machine

The Theta Virtual Machine (TVM) is fully compatible with Ethereum Virtual Machine (EVM). Thus, Ethereum-based contracts can be ported, and developers can work on their smart contracts on the Theta Blockchain.

Theta Blockchain

As outlined before, Theta uses its own Proof-of-Stake blockchain to provide low computation costs and higher transaction throughput. With PoS, viewers and caching nodes do not need to conduct hashing computations.

  • Scalability

High transaction throughput is essential for video streaming based on blockchain. The main idea is to facilitate live streamings that can generate numerous token transactions for caching node rewards in a short time.

Theta aims to support tens of validator nodes and hundreds or even thousands of Guardian nodes. Besides, the protocol expects that on-chain transactions per second (TPS) will reach at least 500 TPS. The team is planning to support over 10,000 TPS for bandwidth sharing rewards, using TFUEL as the transaction fee.

  • SDK

Theta has a JavaScript Software Development Kit (SDK) to facilitate the interface communication between decentralized applications (DApps) and the Theta blockchain. Its ultimate aim is to provide a friendly ecosystem for DApps to interact with the network.

The SDK allows DApps to easily quiz for blocks and transactions, sign and issue transactions on the network, as well as deploy and interact with smart contracts. In addition, the SDK can support smart contract development by working as an automated test framework. Developers can test their smart contracts and validate their functionalities before issuing them.

  • Smart Streaming Contracts

Theta supports smart contracts designed specifically for its streaming services. These smart contracts appear in several scenarios to facilitate the reward and distribution system in the ecosystem.

Incentive contracts work in scenarios that involve several parties. They simplify the collecting and distribution of tokens based on predefined criteria and allocations across different parties. Some of the main use cases for these contracts are as follows:

  1. Advertisers rewarding viewers and streamers. The incentive contract also works as a deposit for tokens in a decentralized advertising network. They are later drawn upon various parties as users engage with the advertisements. The allocation of tokens halves: 50% goes to viewers, another 50% goes to content creators.
  2. Rewards to multiple parts of the streaming chain. Incentive contracts can also benefit the ingest and caching nodes that brought the stream to a viewer.
  3. Allocation of gifts. A viewer can deposit earned tokens in incentive contracts, which can be allocated across multiple parties.
  4. Premium content. A viewer can pay for premium content by depositing tokens on the incentive contract.
  5. Support for other platforms. Incentive contracts can enable services such as Netflix, Hulu, or Amazon Prime to be built on top of Theta’s decentralized video streaming network.

Validators execute these smart contracts. The smart contract initiates the token reward through proof validation, and the user who funds the incentive contract does not participate.

  • Theta Explorer

The Theta Explorer is a special section to search for blocks, transactions, addresses, stakes, and other activities taking place on the blockchain.

  • Theta wallet

The Theta wallet is a mobile app that works with several cryptocurrencies and blockchains. It can send, receive, secure and store your funds.

  • Theta Swap

Theta also has a decentralized exchange (DEX), called ThetaSwap DEX. Similar to several decentralized finance (DeFi) protocols, ThetaSwap uses Automated Market Maker (AMM) instead of relying on typical order books from centralized exchanges. The DEX has many liquidity pools, so users will have to find their respective pool for the token they want to trade.

  • Theta Guardian Node

Another node on Theta is Guardian Node. Its purpose is to complete blocks in Theta’s Multi-BFT consensus algorithm. The community members run these nodes and receive TFUEL, the “gas” token of the Theta blockchain. In order to run a Guardian Node, members have to stake at least 1,000 Theta tokens. Besides, they have to meet certain computing requirements.

Some of them include 5Mbps internet speed, CPU with at least 8 cores, memory of 32 GB, and disk size of at least 1TB.

Guardian nodes take a share of all the TFUEL generated on the network. The number of TFUEL that operators receive depends on how much Theta tokens they stake.

Theta Edge Node

With Edge Node, users can relay video streams over the Theta Network to earn TFUEL, providing support to THETA.tv and other video streaming platforms within the Theta Network. Users can also broadcast their own video streams and distribute them over the Theta Edge Network.

What Is Theta Token?

The protocol has two ERC-20 tokens: THETA token and TFUEL token. THETA token has many functions within the system. Users who have THETA tokens can stake as validators, vote on proposals for future protocol changes, and more.

On the other hand, TFUEL is the primordial token of the network. It works as the “gas” token, similar to Ether in Ethereum. TFUEL has a vital role in the network, its main incentive is to provide users with computing resources and bandwidth.

Theta has a total supply of 1,000,000,000 THETA coins. Their distribution is as follows:

  • 30% of the total supply was sold on September 26, 2017.
  • 7.49% allocated for the team.
  • 1.23% allocated for advisors.
  • 12.5% went to partners.
  • 12.5% allocated for Network Seeding.
  • 36.28% saved for Labs Reserves.

Theta Benefits

Theta offers many benefits for the video streaming industry, solving several problems that it faces today. The protocol provides a community-governance ecosystem. There, users can not only vote, stake, and compensate viewers and streamers, but also power the network by sharing their computing and bandwidth resources, acting as caching nodes for video streams.

The traditional video streaming industry faces many problems that cost millions of dollars each year. Content Delivery Network (CDN) is the main infrastructure where video streaming is possible. However, it is limited due to last-mile delivery. Typically, CDN providers build data centers in several locations globally to deliver content close to the viewer. But they are limited to their geographical areas, especially if a region is less developed.

The Theta Network solves these issues by providing a decentralized streaming service where anyone can join to hare their computing resource and bandwidth to provide high-quality streamings without the need for a physical data center.

Above all, Theta leverages blockchain technology to create the first end-to-end decentralized video streaming and delivery network. Theta builds a global community where every user provides their computing resources. The last-mile delivery problem is eliminated as viewers’ devices are geographically closer to each other than to CDN data centers.

Most viewers receive the stream from the caching nodes. If all platforms use Theta’s technology, they can reduce CDN bandwidth cost. Besides, caching nodes also help to reduce round-trip time, making foveated streaming (a technique where image detail is fixated according to several points) to be more practical.

Conclusion

Theta is the first video streaming platform that uses several DeFi features like staking, voting, community-governance, rewards, and much more. Theta is decentralizing the video streaming industry, reducing the cost of bandwidth (which could be millions of dollars per year), and providing a more practical ecosystem where users can share their resources to maintain the network running, receiving rewards in exchange.

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FAQ

What is Theta?

Theta is an end-to-end decentralized platform for video streaming designed to solve the typical issues in traditional content delivery platforms by introducing tokens as the main incentive for users. Viewers share their computing resources and bandwidth in the network, improving video quality and engaging users in streaming services. As a result, a fully decentralized ecosystem for video streaming with sufficient network density appears.

Powered by users and an innovative new blockchain, Theta provides a decentralized streaming network and allows for vertical decentralized apps (DApps) to be built on top of the platform, enabling esports, music, TV/movies, education, enterprise conferencing, peer-to-peer streaming, and more. It also has its native Theta token.

Who founded Theta?

Theta was founded by Mitch Liu and Jieyi Long back in 2018. Both having experience in the field of gaming and programming.

How does Theta function?

Theta leverages blockchain technology to create the first end-to-end decentralized video streaming and delivery network. Theta builds a global community with every user that provides their computing resources. 

The Theta Network solves the typical issues of the Content Delivery Network by providing a decentralized streaming service where anyone can join to share their computing resources and bandwidth to provide high-quality streamings without the need for a physical data center.

What is Theta token?

The Theta token is the native ERC-20 token of the protocol. It has many functions within the system. Users who have THETA tokens can stake as validators, vote on proposals for future protocol changes, and more.

What is the difference between THETA and TFUEL?

Both are ERC-20 tokens. On the one hand, THETA has many functions within the system. Users who have THETA can stake as validators, vote on proposals for future protocol changes, and more. 

On the other hand, TFUEL is the primordial token of the network. It works as the “gas” token, similar to Ether in Ethereum. TFUEL has a vital role in the network, it is the main incentive for users to provide their computing resources and bandwidth.

What are the pros and cons of Theta?

Theta offers many benefits for the video streaming industry, solving several problems that it faces today. The protocol provides a community-governance ecosystem. There, users can not only vote, stake, and compensate viewers and streamers, but also come together to power the network by sharing their computing and bandwidth resources, acting as caching nodes for video streams.

Some setbacks for certain users would be the requirements to run nodes, like the Guardian Node. At least 1,000 THETA needs to be at stake. Having a system with high aspects, such as 1TB of disk size and at least 5Mbps of the internet is required as well.

What is the future of Theta?

Theta is planning to bring more features to its platform. The Theta Labs and Theta community are working together on many projects to enhance the platform. These projects include decentralized exchanges, staking pools, and more.

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