The Livepeer Project and Livepeer, Inc.
One thing that I frequently get asked to explain is the relationship between the Livepeer project, and the company with a similar name, Livepeer, Inc. Questions around this come up often after events like the recent fundraise announcement, in which the company raised $40,000,000 over a Series B and fast follow extension round. People are typically wondering whether or not that money will be allocated to help the Livepeer project succeed. It will. This post helps to explain the relationship between the project and company, and elaborate on how this architecture will help accelerate the entire ecosystem towards success. The quickest way to understand the relationship is as follows:
- The Livepeer project’s mission is to build the world’s open video infrastructure. It includes an open access protocol deployed on Ethereum, a network of thousands of participants that stake and run nodes to power a video streaming network according to the rules of the protocol, and open source software that anyone can leverage to build video streaming applications that use this network. All the project stakeholders operate as a loosely organized DAO, and leverage the protocol’s built in inflation funding, routing LPT to node operators and delegators who help run the network. Many of these stakeholders have reinvested funds into building incredible tooling, media, software, and support materials that help the project.
- Livepeer, Inc. is a company started by two Livepeer project founders, myself and Eric Tang, with the mission of accelerating the wide adoption of the Livepeer network. It does so by building products and services that users need in order to onboard to, and take advantage of, all the Livepeer project offers.
A protocol succeeds if it incentivizes an enormous network of participants to build useful and sustainable projects and services on top of it. It is helpful to think of Livepeer, Inc. as just one of thousands of actors in the Livepeer project that have been successfully catalyzed by the Livepeer protocol. Its team members are project participants first, and engage through the same channels like Discord chat, the forum, and governance process. Though for a couple key reasons, it is an important actor at this stage:
- It employs a number of people with the deep expertise in both video and blockchain, who can then focus their time on the complex engineering, product, and go to market work dedicated to helping the project fulfill its vision. Because of its unique positioning as the first focused entity that does this, as well as it having tapped into genesis resources from the protocol to help fund this development, it takes its responsibility as steward of the Livepeer network very seriously.
- While anyone can run Livepeer broadcast nodes to leverage the Livepeer network for transcoding, the company runs a global network of broadcast nodes that serve as a gateway product for video developers to use the network without the technical complexities of doing so themselves. This gateway product bundles a number of other video services to ease the developer journey, and represents a majority of the traffic on the Livepeer network today that routes fees to all of the supply side node operators.
The company holds about 8% of the LPT in circulation, and company equity investors are also LPT holders, so it remains highly aligned with all the stakeholders on the Livepeer Network. Livepeer, Inc. succeeds if the project succeeds. Yet, because network ownership was widely distributed at genesis through the MerkleMine distribution algorithm and ongoing inflation funding continues to node operators, the company doesn’t hold nearly enough LPT to “control” the network through governance votes or outsized staking or node operation, typically running less than 3 nodes on the network at any given moment.
Why does a decentralized project like Livepeer need a company at all? In the early days of building out the protocol, it wasn’t evident that it would. The protocol’s economic incentives were successful at bootstrapping a great community and supply side set of operators and contributors to the network. The entire network runs in a decentralized way, and fulfills the function of being a useful and valuable streaming infrastructure. However, what also became clear as this was playing out, was that this wasn’t sufficient to onboard scalable demand-side adoption.
The nascent web3 app development world wasn’t yet ready for scalable decentralized social, media, and streaming applications to emerge organically from DAOs and communities back in 2018 and 2019. Instead, to onboard usage and fees to the Livepeer network, video products and services needed to be built on top of the network to ease access from the broadcasters, media companies, and video developers, who were not ready to run nodes, pay with cryptocurrencies, and deal with blockchain tech. The most efficient path that we saw to do this was to organize and fund a set of efforts, under an organized company, to run at the mission of accelerating this adoption. Much like Coinbase onboarded millions of users to Bitcoin by building a great frontend access point, Livepeer, Inc. has onboarded millions of minutes of video streamed onto the Livepeer network.
With Great Power Comes Great Responsibility
Despite being just one actor on the network, it’s acknowledged above that the company does hold a unique position as the steward of the network in the early days. This presents potential risk and concern for other participants, and as such, it’s critical that the company demonstrates its core values align with the project through a series of commitments:
- Commitment to open source — the code that Livepeer, Inc. writes is open source, and contributed to the core components that push the project and ecosystem forward across both the network’s supply side and demand side. Furthermore, there’s a commitment to fostering a culture and community around open source contribution, such that Inc. isn’t the only stakeholder contributing to the core components that push the ecosystem forward, be it tools for node operation, or for video development. Any actor leveraging either side of the network can use the same code, fork it, enhance it, and shape it to their needs and vision of the future.
- Company staff serve the Livepeer ecosystem — This manifests itself in two ways. 1) There are teams and functions within the Livepeer company that are entirely dedicated to the project and ecosystem, rather than any specific company metric or goal. 2) And even the more commercially focused team members are guided by the mission of increasing adoption of the Livepeer network, rather than focusing on short-term corporate profit. Furthermore, company functions apply a filter to their goals, to not just execute against them in a silo, but to ask how they can work alongside the community to collectively execute them. Early steps here have looked like making company goals public community goals, but can evolve into functional pods made up of community members from all different areas of the ecosystem, rather than just the core team.
- Commitment to decentralization — See below.
Ongoing Path to Decentralization
While the company builds an important gateway product today, the project only succeeds if eventually many such entities exist to provide a full suite of offerings servicing different verticals and communities. In particular, now that web3 primitives like infrastructure, NFTs, token gating, and DAO tooling are here, developers are now able to build the next foundation of web3 applications that leverage streaming and can scale to millions of users.
Bitcoin is better off with more companies than just Coinbase providing access, and Livepeer will be better off with more companies than just Livepeer, Inc. driving traffic to the network in exchange for open access streaming infrastructure. Decentralizing this product development is enabled by the open source deployable software available through go-livepeer and the MistServer media server, and the emerging web3 development stack mentioned above.
Separately from product development, there’s also the tracks of decentralizing governance and network ownership. As mentioned, both are widely decentralized already — though with any technically complex project with strong leadership, there often appears to be considerable alignment amongst the stakeholders and technically proficient experts within the leadership group. This is already beginning to decentralize with more expert video developers joining the network as users or partners, and as they come to rely on the network for different use cases or motivations, you’ll begin to see differing opinions on feature prioritization, upgrades, and various community actions. This fragmentation is healthy, and indicates a more robust and decentralized network that forms a foundation for a core primitive like reliable global streaming on an open infrastructure. The governance roadmap already specifies a mechanism for modifying access rights to invoke protocol upgrades through the LIP process, and includes a path to wider on-chain governance should the community chose to go that route.
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In summary, by talking about the risks that the community sees around centralization, and addressing the potential concerns head on, we can ensure that we’re collectively building towards a decentralized future where the Livepeer project succeeds and fulfills its potential. I’m excited so far that the protocol has successfully bootstrapped an incredible community of diverse stakeholders, and also excited that a company has brought together an incredibly talented group of likeminded project members, and been able to attract the financing to allow them to focus on accelerating Livepeer’s success. More entities, DAOs, communities, companies, and individuals will emerge that can also serve as Schelling points for people and a mission, and attract the capital to fund it as a result of the primitives enabled by Livepeer. This combination appears powerful, and as long as we keep our eyes out for risks and misalignments along the way, and engage them head on, we’ll be on the path to an open video infrastructure that serves the needs of all.