Theta Token

What is Theta Network (THETA)?

Theta Network is an open-source blockchain platform taking aim squarely at the world of video streaming.

Theta aims to decentralize content delivery, allowing users to share bandwidth and resources on a peer-to-peer basis to relay video and get rewarded for doing so.

This solves the problem faced by existing content delivery networks that can’t keep up with the demand for high-quality streams due to geographical restrictions.

Especially in countries with poorer infrastructure, existing content delivery networks cannot fulfill user demand for video streaming in resolutions like 4K and 8K. Trying to deliver high-quality streams results in a data traffic jam, with users experiencing long loading and buffering times.

Aside from solving this problem neatly, Theta Network can remove most intermediaries and better connect creators and viewers. This leads to better rewards for content creators themselves, rather than platforms siphoning away their money in the name of infrastructure costs.

With the centralization of the current video streaming industry, populated as it is by less than a handful of big corporations, Theta can improve the end user experience and reward content creators more fairly.

When Was Theta Network Launched?

THETA tokens were issued as ERC-20 tokens in December 2017. When the Theta blockchain launched, these ERC-20 tokens were exchanged for native tokens at a 1:1 ratio.

Theta Network went to mainnet in March 2019, a few months behind its scheduled launch in late 2018. Along with the swap from ERC-20 to native THETA tokens, users were also airdropped TFUEL.

Guardian nodes were brought by version 2 of the Theta mainnet in May 2020, creating a unique multi-level consensus system.

Theta Network’s current implementation, Mainnet 3.0, was announced in late 2020 and went live in 2021. Mainnet version 4.0 is expected at the end of 2022.

Who are the Founders of Theta Network?

Theta Network was founded by Mitch Liu and Jieyi Long.

Liu is an MIT and Stanford graduate and an experienced entrepreneur, credited with co-founding the mobile social gaming studio Gameview Studios and video ad firm Tapjoy.

Long, meanwhile, is Theta’s CTO. He has developed multiple technologies and holds patents in the areas of VR live streaming and instant replays for video games.

Theta is also backed by many strategic corporate investors, including Samsung NEXT and Sony Innovation Fund. Moreover, Theta is advised by YouTube co-founder Steve Chen and Twitch co-founder Justin Kan.

How Does Theta Network Work?

The Theta Network is set up like a mesh, with nodes connecting to each other and acting as the backbone of Theta’s bandwidth. There are three types of nodes that make up the Theta Network:

• Enterprise Validator Nodes. These are companies who stake THETA in exchange for the right to process transactions on the Theta blockchain. Current enterprise validators include Google, Sony, Samsung, and Binance.
• Guardian Nodes. These are nodes that work to make sure that the transaction blocks proposed by the Enterprise validator nodes are accurate.
• Edge Nodes. These are the users that share bandwidth and relay video streams over the network for TFUEL rewards.

Video data is cached and transmitted from edge nodes that are geographically closest to viewers. As the network becomes larger and spread across the world, this means a growing number of edge nodes in the proximity of viewers.

These edge nodes are awarded TFUEL tokens for their services in allocating bandwidth to the network and relaying video. Standing for Theta Fuel, TFUEL tokens are one of two tokens that make up the Theta economy.

According to the Theta Network team, the absence of any need to operate data centers in this distribution model could lead to a cost reduction of as much as 80%.

What Makes Theta Network Unique?

Theta is an innovator in the blockchain industry, having deployed a micropayment solution utilizing layer 2 in 2018 and implementing multi-level BFT to the network’s proof-of-stake in 2020.

Theta also achieved compatibility with Ethereum and its Turing-complete smart contracts in 2021. However, the project hasn’t stopped there and, in April 2022, released its whitepaper for version 4 of the Theta mainnet.

Within this whitepaper, Theta Labs describes the Theta Metachain. The Theta Metachain is an interconnected network of blockchains, or a “chain of chains.” This would allow permissionless horizontal scaling of the Theta Network to reach unlimited transactional throughput and potentially subsecond block finalization time.

The existing Theta mainnet will function as the main chain in this new network topology, What’s more, subchains that are purpose-specific and permissionless to create will be introduced.

The main chain and all subchains will be EVM (Ethereum Virtual Machine) compatible, providing a unified, interoperable environment for developers. This will also allow asset transfers between themselves as well as external blockchains like Ethereum, Avalanche, and Binance Smart Chain.

According to Theta Labs, this new subchain structure will increase the demand for both THETA and TFUEL. THETA tokens will be required as collateral for any subchain, and subchains will rely on the main chain for security, making staked THETA on the main chain very important.

Meanwhile, TFUEL will continue to be required as the gas token for all transactions on the main chain as well as the subchains. TNT-20 (a parallel standard to Ethereum’s ERC-20) governance tokens may be issued on individual subchains but will not interfere with THETA or TFUEL utility.

Theta Metachain and Mainnet version 4 are scheduled to be deployed in December 2022, offering a total package of video-focused Web3 edge computing infrastructure.

How will Theta Metachain differ from other blockchains?

There are three other major blockchain ecosystems with similar multichain designs. Cosmos allows developers to build Cosmos Zones, Polkadot has a sharded infrastructure using Parachains, and Avalanche has customizable subnets.

Here’s how they compare to the Theta Metachain:

• Theta Metachain vs. Cosmos Zones. Theta Metachain is designed to be simpler in architecture and has a single unified gas token in TFUEL. In Cosmos, each Zone can have different gas tokens and may not support EVM. Zones can also be distant from hubs when it comes to asset transfer, whereas Theta Metachain will require only two “hops” at most.
• Theta Metachain vs. Polkadot Parachains. Parachains are scarce and have to be competed for in parachain auctions. This is a limiting factor in the size of the network, as well as an entry barrier in terms of cost. Theta will not limit the number of subchains, allowing for free horizontal scaling.
• Theta Metachain vs. Avalanche Subnet. According to Theta Labs, Avalanche’s signature polling-based metastable consensus provides only probabilistic finality and requires synchronous timing. Theta Metachain’s SDK, however, implements BFT consensus by default, which guarantees deterministic finality.

How is the Theta Network Secured?

Theta Network is secured by a modified Byzantine Fault Tolerant (BFT) proof-of-stake consensus mechanism.

In proof-of-stake (PoS) consensus, nodes utilize an economic system of incentivization and punishment to reward behavior that follows the protocol and disincentivize misbehavior.

Byzantine Fault Tolerance, meanwhile, is the ability of a system to remain resilient despite the failure (or misbehavior) of up to a third of its validating nodes.

Theta Network’s consensus has been modified to allow both enterprise validator nodes as well as guardian nodes to participate in consensus. With more nodes thus taking part in consensus, this adds an extra level of security to the protocol.

Participating in this unique multi-level BFT consensus are, according to Theta Labs, a committee of 20-30 enterprise validator nodes and a second layer of thousands of guardian nodes.

All of the nodes participating in consensus must stake THETA tokens since Theta is a proof-of-stake blockchain. This simply means that they lock their THETA tokens away, and their chances of proposing a block are proportional to how much THETA they are staking.

Enterprise validators have to stake at least 10,000,000 THETA, and Guardian nodes have a minimum required stake of 1,000 THETA. A node’s voting power is also determined by the amount of THETA it stakes.

What is the Use of THETA & TFUEL?

THETA’s main utility is for staking and managing protocol consensus and security. Staked THETA allows nodes to validate transactions, produce blocks, and vote on changes to the network via on-chain governance.

Nodes that stake THETA, meanwhile, are rewarded with TFUEL for doing so. TFUEL is the gas token of the Theta Network, used for the payment of edge nodes for services as well as for transactions on the network.

Developers deploying applications on the Theta blockchain also need to use TFUEL for the operation of their smart contracts. Relayers earn TFUEL for every video stream they relay to other users on the network.

Who Controls Theta Network?

Theta Network is controlled by Theta Labs, a subsidiary of SLIVER.tv. Theta Labs is the company created by Theta founders Mitch Liu and Jieyi Long. It runs an enterprise validator node on the Theta Network.

According to public statistics on its ICO, Theta Labs kept 30% of the genesis THETA tokens as a reserve while allocating 40% to the token sale. 20% was used for network seeding and 10% was given to advisors and partners.

How Much THETA Is In Circulation?

THETA’s tokenomics are clearly defined. According to the protocol, there will only ever be 1 billion THETA, and all of it is in circulation.

As per a Medium post by Theta Labs, 60% of THETA is locked in staking. At the ICO, THETA tokens were sold at a price of $0.15.

There were 5 billion TFUEL at genesis, meanwhile, and the supply increases annually at a fixed rate set at the protocol level.

Theta 3.0, announced in December 2020, allowed users to stake TFUEL to an edge node to upgrade it to an Elite Edge Node. These nodes can earn TFUEL through their staked TFUEL. Additionally, they can earn TFUEL for delivering higher performance through a proof-of-relay mechanism.

TFUEL also began to be burned with Theta Mainnet 3.0. A portion of each TFUEL payment to the edge network is burned at the protocol level, functioning as a cost of using the edge network. This burn mechanism, similar to Ethereum’s EIP-1559, adds a deflationary element to the TFUEL token.

A 2-4% additional TFUEL inflation was introduced in Theta Mainnet 3.0. With this new version, edge nodes can upgrade to elite edge nodes and earn a portion of this inflation through “uptime mining.” The previous 5% inflation of TFUEL, given as rewards to enterprise validators and guardians, remains unchanged.

How Do You Buy THETA?

You can buy THETA on many major centralized exchange platforms, where it is often paired with USDT and other stablecoins.

THETA is also often paired with BTC, although fiat trading pairs may be difficult to find.

Is It Possible to Buy THETA Instantly?

Purchasing any cryptocurrency on an exchange platform is usually instant. This is because most exchanges are custodial, meaning they hold both fiat and cryptocurrencies on your behalf.

This allows exchanges to process trades immediately as it’s just a matter of shifting some numbers in your account around based on the trades you make. If you actually want to take control of your THETA and stake it, however, you’ll need to use a non-custodial wallet.

How Do You Store THETA?

THETA, like any cryptocurrency, is stored in a wallet. Non-custodial wallets, where you have full control and custody over your own coins, usually come in two forms:

• Cold wallets. These keep the keys to your wallet offline. This can be a safe method of storage because it prevents any sort of hacks or other internet-based attacks from compromising your keys.
• Hot wallets. These wallets connect to the internet and trade a little safety for convenience. While sometimes considered less safe than cold wallets, hot wallets like browser extensions tend to be quite easy to use. Metamask can be configured to the Theta mainnet, but Theta has its own native wallet as well.

Theta Network Energy Consumption

Theta Network has, as per Theta Labs, only 20-30 enterprise validators and in the region of 3,500 guardian nodes.

However, Theta is a proof-of-stake network. Therefore, these nodes are not operating in the same way as proof-of-work cryptocurrency miners, sitting in rows in warehouses and running hot.

Rather, these nodes require far less computing power since network security is ensured via economic systems rather than raw power.

As such, Theta Network cannot be considered to have significant power consumption like Bitcoin or (while it remains proof-of-work) Ethereum.

Even when the Theta Mainnet upgrades to version 4 and introduces subchains, energy consumption isn’t likely to increase hugely. Comparative systems with similar architectures like Polkadot, Cosmos, and Avalanche are all extremely energy-efficient.

Polkadot, for example, consumes just 70,000 kWh annually, and Avalanche is rated at around 489,000 kWh a year. According to the US Energy Information Administration, the average US household consumes 11,000 kWh per year.

Is THETA a Good Investment?

Theta Network is an ambitious project that aims to solve a very important real-world problem.

Already established as a leader in the blockchain industry, Theta has industry experts leading and advising the project, as well as the buy-in of some of the top corporations in the space.

Its continuous, seemingly annual iterations in terms of mainnet upgrades and decentralized, Web3-centric philosophies suggest that it isn’t about to go anywhere, and investors can see constant protocol-level improvement.

If Theta Mainnet version 4 can launch successfully, the Theta Network’s potential seems endless.