FAQ for Livepeer Delegators ⁉️
The answers to the most common questions when you want to delegate your LPT tokens in Livepeer
[Last Update: June, 3rd 2024]
In this article, we want to address the most Frequently Asked Questions (FAQ) for Delegators for the Livepeer protocol. If you are not familiar with Livepeer, you can read our simple introduction here:
In short, Livepeer offers an open video infrastructure designed for efficient and cost-effective video transcoding. Additionally, it is expanding into the realm of AI, harnessing a robust network of servers capable of executing complex computations.
1. What is LPT
The Livepeer Token (LPT) was created as an incentive system for participants using the Livepeer protocol to distribute video content and provide security on the network. The full list of Crypto Exchanges (CEX) and Decentralized Exchanges (DEX) where you can purchase LPT tokens is available here.
2. What are Orchestrators and Delegators?
Orchestrators and Delegators are two network participants that earn LPT tokens in exchange of their work:
- Orchestrators are node operators who run the servers for Livepeer network, performing complex operations like video transcoding or new AI related tasks.
- Delegators are individuals who stake their LPT tokens in the Livepeer network and in exchange earns a passive interest, >40% APY … and no, that’s not a typo! 😀
3. What’s the total supply of LPT?
At present, LPT does not have a fixed supply: all the rewards (for Orchestrators and Delegators) are generated daily through the minting of new LPT tokens. This process is determined by staking participation levels with the following simple rule:
- If staking participation falls below 50% of the total supply, inflation increases by 0.0003% per day.
- Conversely, if staking participation surpasses 50% of the total supply, inflation decreases at the same rate.
4. What is Crypto Staking
LPT functions as a utility token, serving a practical role within the Livepeer ecosystem. Holding LPT in your wallet, or on platforms like Coinbase or Binance, without engaging them, does not contribute to the network’s operation. Fortunately, there’s a simple option available to put your tokens to use: you can simultaneously earn passive interest and grow your initial holdings of LPT. In the crypto/web3 realm, this practice is known as staking.
What is Staking in Crypto?
Staking is a way to put your crypto to work and earn rewards on it. If you’re a crypto investor, staking is a concept you’ll hear about often. But what is crypto staking? Staking cryptocurrencies is a process that involves committing your crypto assets to support a blockchain network and confirm transactions. Staking can be a great way to use your crypto to generate passive income, especially because some cryptocurrencies offer high-interest rates for staking. — source: Motley Fool
5. How much LPT do I need to delegate?
Feel free to utilize any amount you desire; there’s no minimum requirement to begin. Even starting with just 10 LPT can yield significant rewards. Additionally, you have the flexibility to increase your delegation at any time by adding more LPT to your current stake.
6. How much does it cost to delegate?
Delegating LPT requires paying Ethereum Gas Fees (using ETH). Since Livepeer migrated to Arbitrum more than two years ago, delegating became extremely cheap. You will end up paying no more than $0.1 for delegating your LPT tokens. Please note that ETH is also the currency used to pay gas fees on Arbitrum.
7. Can I buy LPT on Uniswap or another DEX?
Yes, you can acquire LPT on Uniswap by exchanging nearly any cryptocurrency for LPT. Moreover, the fees you’ll encounter are significantly lower compared to centralized exchanges (CEX) such as Coinbase or Binance.
Uniswap is one of the leading Decentralized Exchanges (DEX): a DEX is a platform where you can trade cryptocurrencies directly with other users, without needing a middleman like a bank. It’s decentralized, meaning there’s no central authority controlling the trades.
Watch the video below to learn how to utilize Uniswap for swapping USDC (a widely used stablecoin) in exchange for LPT tokens.
8. How do I delegate my LPT?
Delegating your LPT is an easy process! You can use the wallet you are most comfortable with. To help you in your journey towards becoming a Delegator, we have published a complete guide to become a delegator:
9. When will I get my rewards?
Your rewards will be received daily. Within the Livepeer ecosystem, new LPT tokens are generated in periodic cycles called “Rounds,” each spanning 6,377 Ethereum blocks, that is equivalent to one day. Consequently, your designated Orchestrator will automatically distribute your rewards each day, requiring no action on your part.
10. What rewards can I expect to receive?
When you delegate LPT in Livepeer, you’ll receive rewards in both LPT and ETH. Your Orchestrator will allocate both LPT and ETH rewards, retaining a portion for themselves based on their specified cuts.
There are two types of cuts (that means two types of rewards):
- Fee Cut (in ETH): this is the percentage of ETH the orchestrator keeps from the fees they receive for their work. They divide the rest among their delegators based on how much they’ve contributed (that means how much a delegator provide in terms of LPT).
- Reward Cut (in LPT): this shows how much LPT the orchestrator keeps from the rewards they get from the Livepeer protocol. They share the rest with their delegators depending on how much they’ve contributed (measured also in LPT like before).
For instance, in the example above this Orchestrator is keeping 50% of the fees (in ETH) for himself, while keeping just 1% only of the LPT rewards. That means 99% of his LPT rewards are distributed to his delegators (and also 50% of the ETH fees).
11. Do I need to claim my rewards?
For LPT rewards there’s no requirement to claim your rewards. Once you delegate your LPT to an Orchestrator, you can simply let your funds remain there and unwind. Your stake will naturally grow as the daily accrued LPT rewards are automatically added.
Instead, each time you wish to claim your ETH rewards, you’ll need to visit Livepeer Explorer, navigate to “My Account,” and select the “Withdraw Pending Fees” button. This will promptly transfer your ETH rewards to your wallet.
12. Are LPT rewards auto compounding?
Yes, all LPT rewards you earn undergo automatic compounding. This implies that whenever a new round concludes, your Orchestrator will distribute rewards to you, which will be added to your initial delegation. Consequently, you’ll accrue interest on both your original delegation and the accumulated rewards, seamlessly. If you’re curious to learn more about compound interest, you can explore an informative article here.
13. How many Orchestrators can I delegate to?
The number of Orchestrators you can delegate to depends on the quantity of LPT you possess. Currently, you can only delegate to one Orchestrator per wallet. Thus, if you aim to distribute your LPTs among multiple Orchestrators, you’ll need multiple crypto wallets, one for each delegation you intend to make.
14. Can I move my LPT to another Orchestrator?
Yes, you can transfer your LPT to another Orchestrator without undelegating and waiting for seven days. Just shift your current delegation to a new Orchestrator. The process is simple and straightforward, and we’ve created this video to guide you through it.
15. How many days it takes to take my LPT back?
Undelegating your LPT tokens from delegation is a straightforward process. Please note that there’s a 7-day waiting period before you can withdraw and transfer your tokens back into your wallet. We’re putting together a simple tutorial to demonstrate just how easy it is to undelegate your LPT … stay tuned for the video 😎
Do you have any questions?
Live Pioneers is the first unofficial community for long term LPT holders and supporters of the Livepeer protocol ▶️
If you have any questions, or concerns, or want to submit feedback, you can reach out to us using our social channels:
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