Livepeer Staking Guide

Livepeer offers a very attractive staking yield: currently ~ 24% on an annualized basis.

Livepeer aims to decentralize live video broadcast by developing a live video streaming (p2p) network protocol and infrastructure layer on the Ethereum blockchain.

Summary

Livepeer offers a very attractive staking yield: currently ~ 24% on an annualized basis. If the network wide stake rate remains lower than 50% (12.04% as of 09/26/18), the yield rises daily, increasing the annualized yield for stakeholders to ~ 50%+.

The effective annual yield (Basic) of 23.89% is calculated assuming a consistent per round inflation rate of .0572% (((1+.0572%)³⁶⁵)-1). The effective annual yield (High) of 50.60% is calculated assuming per round inflation growth of .0003%.

https://supermax.cool/livepeer is a great resource for real-time inflation and stake rate metrics.

If you own Livepeer, it’s advisable to bond it to a transcoder so that you can earn the staking yield. To delegate your LPT to Staked, please use the following address:

https://explorer.livepeer.org/accounts/0xe9e284277648fcdb09b8efc1832c73c09b5ecf59
0xE9E284277648fcdb09B8EfC1832c73c09b5Ecf59

Delegation is non-custodial, delegates cannot spend your LPT, and your stake is not at risk.

Overview

Livepeer aims to decentralize live video broadcast by developing a live video streaming (p2p) network protocol and infrastructure layer on the Ethereum blockchain. The Livepeer protocol is designed to incentivize game theoretically secure, performant and scalable transcoding and distribution of live video. The Livepeer alpha network launched on the Ethereum mainnet on May 1, 2018.

The Livepeer protocol is round based, where each round lasts roughly one day. Token holders delegate their stake to elect transcoder nodes that perform video transcoding work. After launching in round 961, the network was in round 1,111 as of September 26th, 2018.

At the completion of each round, broadcaster fees and newly minted (via inflation) LPT are distributed, transcoders are slashed (penalized with loss of funds) for any malicious activity, and the active transcoder pool is reset based on total delegated stake, all programmatically at the protocol level.

Transcoders

In the Livepeer network ‘Transcoders’ are responsible for transcoding video, which is the process of converting input streams of video from broadcasters into many different formats, and participating in the Truebit-based transcoding verification protocol.

The Livepeer network supports N (currently 15) active transcoders per round, where N is an adjustable network parameter, in addition to one randomly selected transcoder from the waitlist. Members of the active transcoder set earn inflationary rewards and broadcasting fees during each round in proportion to their total delegated stake of LPT. The active transcoder pool is reset every round based on total delegated stake.

Transcoders publish their price for transcoding a segment of video (Price Per Segment), block reward share percentage (Block Reward Cut) for newly issued LPT, and fee share percentage (Fee Share) for ETH broadcasting fees.

Transcoders need powerful hardware for efficient transcoding (potentially with GPU accelerated transcoding), high bandwidth connections for low latency video distribution, and the DevOps expertise to operate highly available, secure and reliable infrastructure for video broadcasters.

Livepeer Token (LPT)

The Livepeer Token (LPT) uses a proof-of-stake (PoS) bonding mechanism to determine the active pool of transcoder nodes, coordinate the allocation of transcoding work across validator nodes on the network, and ensure game theoretic security and performance guarantees for video transcoding and distribution. Rather than using LPT as a medium of exchange within the Livepeer network, broadcasters pay validation nodes for video transcoding and distribution services using ETH.

Token Economics

10,000,000 LPT tokens were generated in the Livepeer genesis block. New tokens are minted each round according to the protocol defined inflation schedule (relative to the outstanding float) and issued to Transcoders pro-rata based on delegated stake for performing transcoding services.

Livepeer block rewards are funded by protocol defined inflation. The initial inflation rate was set to .0500%, and is scheduled to increase by .0003% each round until 50% of the total supply of LPT has been bonded. As of round 1,111 (September 26th, 2018), 533,092 new LPT has been created, the current per round inflation rate is .0587% and 12.04% of the LPT is bonded. The current effective annualized yield is between 23.89% and 50.60%, depending upon how quickly the bonded LPT target rate of 50% is reached. When 50% of the LPT supply has been bonded, the per round inflation rate is expected to settle at an equilibrium of the then current per round inflation rate.

The target bond rate of 50% is expected to be reached within the next 12 months as Founding Team and Investor owned LPT continues to vest and be released, new LPT is issued to active transcoders, and the remaining ~ 10% of the LPT allocated for the public in the genesis allocation is distributed via the MerkleMine algorithm.

The effective annual yield (Basic) of 23.89% is calculated assuming a consistent per round inflation rate of .0572% (((1+.0572%)³⁶⁵)-1). The effective annual yield (High) of 50.60% is calculated assuming per round inflation growth of .0003%.

Transcoders can be slashed, or penalized with the loss of LPT, for failing a verification, failing to invoke a verification when required, or not performing a proportional share of transcoding work based on delegated stake.

Token Distribution

Delegation

All token holders have the option to bond, or ‘delegate’ their LPT stake to Transcoders using the Bond transaction in the Livepeer smart contract. Token holders are incentivized to delegate LPT in order to earn rewards (LPT inflation + ETH broadcaster fees) from Transcoders, and more importantly, to ensure effective Transcoders are elected and performing efficient live video broadcasting services for broadcasters.

LPT Delegation Instructions

To delegate LPT to a transcoder, use the Livepeer block explorer to access a list of the active and candidate transcoders on the network and the following instructions:

With an Ethereum enabled browser such as MetaMask, Parity or Mist enabled, click the ‘BOND’ button in the list of transcoders for the node to whom you want to delegate.
After clicking on the BOND button, you will need to update your LPT transfer allowance to the amount of LPT you want to approve for bonding.
After updating your transfer allowance, enter the amount of LPT to be delegated, and submit a transaction to the Ethereum network.

Delegation is non-custodial, delegates cannot spend your LPT, and your stake is not at risk. To delegate your LPT to Staked, please use the following address:

https://explorer.livepeer.org/accounts/0xe9e284277648fcdb09b8efc1832c73c09b5ecf59
0xE9E284277648fcdb09B8EfC1832c73c09b5Ecf59

MetaMask + Hardware Wallet

It’s now possible to connect a hardware wallet to a MetaMask account for additional security.

To connect your wallet, make sure you’re using MetaMask 4.10.0 or higher and the MetaMask ​beta UI​.
  1. With your Ledger or Trezor device plugged into your computer, go to the top-right menu in MetaMask and and look for the ‘Connect Hardware Wallet’ option
  2. Select ‘Ledger’ or ‘Trezor’ and then click ‘Connect’
  3. Select the account you want to use and then click ‘Import’

About Staked

Staked operates highly available and highly secure, institutional grade staking infrastructure for leading proof-of-stake (PoS) protocols. The Staked infrastructure is deployed in a multi-tier signing and listening cloud configuration that combines geographic diversity and redundancy across on premise data centers and cloud providers. We use Google’s Kubernetes container orchestration to achieve near-infinite scale, self-healing and hardware decentralization.