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Messari Report: Comprehensive Evaluation of Web3.0 Streaming Theta

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Theta is the world's first decentralized video network to harness blockchain technology to address the shortcomings of streaming and video-on-demand.

原文标题：《 DeFi 之道丨 Messari 报告：从流媒体到 web3.0，Theta 还有哪些机会？》

Original source: Messari Research

Translated by Kyle Babbitt

Streaming content has seen rapid adoption over the past two decades with the rise of platforms like YouTube, TikTok, Twitch, and Netflix. And the COVID-19 pandemic accelerated this trend, as people around the world were forced to stay at home and turn to streaming as a source of entertainment. Streaming now accounts for 75% of Internet traffic, according to Cisco.

Content delivery networks (CDNs) are servers located around the world that provide Internet content, including streaming media, to consumers. Being closer to consumers, CDNs are seen as critical Internet infrastructure to improve video quality and reduce latency. Despite their importance, CDNs still have problems. Typical experiences include user overload, the network strain of high-quality graphics, the challenge of providing services to remote areas, and the high cost of network maintenance. As a result, operating costs increased and subsequently migrated to the video platform; Netflix's CDN costs account for 20% of sales.

About Theta: Global Mesh Network

Theta is the world's first decentralized video network to harness blockchain technology to address the shortcomings of streaming and video-on-demand. Theta uses a peer-to-peer mesh network where anyone on any personal computer, mobile device or smart TV can volunteer to use their free bandwidth and computing to forward videos to other users and receive tokens for their contributions. Theta video reviewers are Edge Nodes (also known as Caching Nodes) that are geographically closer to users (TV, telephone, and computer) than centralized CDN servers. As a result, Theta Network offers end users superior streaming, lower costs for a video platform, and the reward of broadcasters volunteering their bandwidth; All parties benefit from the Theta model.

Source: Theta White Paper

Currently, Theta TV is the leading application on the Theta Network, with millions of users. Theta TV is similar to Twitch in that both are live-streaming platforms, but users on Theta TV can be rewarded for streaming to others at the same time. In addition, Samsung VR, Pandora, and MGM are working with Theta to use the network.

Source: Theta TV

Theta Blockchain and the technology behind it are complex and use novel consensus mechanisms and payment schemes to operate and secure networks. The Theta team and the consultants building the technology are highly qualified industry veterans.

Theta's leadership team includes Mitch Liu, CEO of the company that co-founded Gameview Studios, who holds a bachelor's degree in computer science and engineering from MIT, an MBA from Stanford University, Jieyi Long, CTO, and Ryan Nichols, Chief Product Officer, who has a Ph.D. in Northwest Computer Science and developed patented VR live streaming technology, previously served as a director of WeChat.

Theta's advisers include YouTube co-founder Steve Chen, Twitch co-founder Justin Kan, Verizon chief network officer Kyle Okamoto, and Rakuten product director Jonathan Wong. In this report, we will introduce the Theta blockchain and technology, the Theta token, and the upcoming Mainnet 3.0.

Theta technology

Blockchain is not designed to store large amounts of data, such as images, video and audio. Adding streaming media amplifies the level of complexity and storage required, as streaming media may require high throughput capacity to handle millions of transactions per second. In addition, users in the Theta model need to be motivated to share their free bandwidth, while remaining decentralized and secure.

Theta Blockchain is designed specifically for video and data streaming. Its blockchain uses a novel multi-level BFT consensus mechanism that allows thousands of nodes to participate in the consensus process, while still supporting the processing of a large number of transactions per second. There are two kinds of nodes in its consensus mechanism:

Enterprise Validator Nodes: Up to 30 nodes that propose and generate new blocks on the blockchain. Current members of the Verifying Node List include Google, Blockchain Ventures, Samsung, Sony Europe, Binance, and Theta Labs. Guardian node: Finalize the block generated by the enterprise validator node and serve as a check for malicious validator nodes. Unlike an enterprise validator node, anyone in the world who meets the minimum requirements can become a guardian node. There are currently more than 3,000 daemon nodes worldwide.

Independent of the consensus mechanism, Theta has thousands of Edge Nodes that capture live video, live transcode, cache, and relay live streaming to other Edge Nodes and/or end users in exchange for TFUEL, the "gas fuel" for the Theta network (more on this later). Edge Nodes are part of Theta's broader vision of becoming a decentralized edge network, a distributed computing network that brings computing and data storage as close to the point of request as possible, providing low latency and bandwidth-saving point-to-point sharing for any type of data.

Source: Theta Date: 05/14/2021

Theta Blockchain also supports Turing-complete smart contracts, which are Ethereum smart contracts ported to Theta. The combination of smart contracts and video streaming creates new use cases that benefit both video platforms and users. For example, the platform could write a smart contract to reward the most engaged viewers, viewers could reward their loyal anchors, and users could switch to payment models such as pay-per-use, where royalty distribution is clear and agreed upon.

In addition, anyone can now cast a TNT-20 Token on the Theta Blockchain using Theta Token Minter. Suppose streaming creators could mint their own custom Theta NTT-20 tokens, customize the number of tokens and the inflation timeline, and write a smart contract that would reward loyal followers with tokens. Users who receive tokens can then keep them and hope to become more valuable as the stream's creators grow, or turn in their tokens at Theta Swap. The combination of smart contracts, video streaming, and the Theta product suite adds a new level of interaction that has the potential to significantly increase engagement and retention.

Source: Theta White Paper

As mentioned earlier, scaling the Theta blockchain is particularly cumbersome due to the highly transactional nature of streaming media. To address the scaling limitations, the Theta team built a resource-oriented micropayment pool to improve throughput and reduce on-chain transactions. A micropayment pool is an off-chain pool from which any user can withdraw money, while preventing double payments. For example, streams using the Theta network can pay for video content pulled from multiple nodes without having to make an on-chain transaction because they are pulled from a micropayment pool. Micropayment pool parameters can also be used to track the authorship of a stream, thus facilitating copyright tracking.

Source: Theta White Paper

Theta Token - Dual Currency System

Theta Network operates using two tokens: Theta and Tfuel. There is a fixed supply of 1 billion Theta tokens, all of which have been unlocked since 2019.

Source: Messari

Theta can be used as a pledge and as a verifier or guardian node to protect the network. The Theta Pledge receives a percentage of all tFuel generated. Tfuel is the Theta Network's "gas fuel," meaning it powers on-chain operations, such as paying nodes to share video streaming or enforce smart contracts. The cost of TFUEL is covered by the platform using Theta Network, so the end user does not have to purchase any TFUEL tokens. These platforms are doing this because they are reaching a larger audience at a lower CDN cost in the form of TFUEL. Tfuel will get some major updates with Mainnet 3.0.

Source: Theta Network

Here is a comparison between Theta and Tfuel tokens:

Mainnet 3.0

On June 30th, the highly anticipated Mainnet 3.0 will be released. Mainnet 3.0 will introduce two major updates:

Elite Edge Nodes are the traditional Edge Nodes with secured TFuel. Elite Edge nodes will have a dual revenue potential: the creation of Elite Edge nodes and the pawn reward of uptime mining, which forwards video and data to the rest of the network at a higher level of performance. Theta also revealed a 4% inflation plan for the uptime of the Elite Edge nodes and a 5% inflation plan for the Validator and Guardian nodes to ensure that the network can continue to scale.

Plans for TFuel destruction to offset TFuel inflation. The original plan was to destroy 25% of all TFuel payments on the edge network, thus creating a cost for the platform to use the network (which is still significantly lower than the cost of a traditional CDN). The 25% TFuel payout being destroyed, the smart contract fee being charged, and the pledge are likely to significantly reduce Theta's supply.

Source: Theta Network

risk

Theta operates in streaming and video, and essentially faces stiff competition. While decentralization offers many benefits, with centralization of management, existing companies such as YouTube and Twitch will be able to move more quickly. The quality, scale and reputation of traditional platforms will make it hard for content producers and users to be lured away.

There may also be intellectual property issues, as music or videos found on Theta may be subject to copyright or licensing requirements. To solve this problem, unlike pure Web3 applications, Theta has no censorship. For example, THETATV's creators' guide takes a stand on acceptable content. According to the guidelines, any behavior that has a negative impact on theTATV brand can be removed, as can TFUEL.

Finally, Theta needs to make sure that the blockchain and technology can scale. Extending blockchain projects for video streaming is complex. The granularity of token rewards (e.g., 10,000 concurrent viewers making a single micropayment for a two-second video) has outstripped Ethereum's possibilities.

conclusion

Theta has grown to become the most valuable crypto asset in its class by creating the world's first decentralized video network to address the shortcomings of streaming and video-on-demand. Theta's multi-level BFT consensus mechanism, combined with the dual-currency model, provides power, protection, and funding to the more than 25,000 point-to-point edge nodes that make up the Theta edge network. Theta has proven to be a force in the cryptocurrency and streaming markets; Theta, however, faces stiff competition from traditional streaming giants such as YouTube, Netflix and Twitch. To continue gaining market share, Theta needed to continue to develop its edge network, attract viewers to Theta TV, attract streaming media through smart contract privileges, launch new products like Theta Dex, and successfully launch Mainnet 3.0.