Why Livepeer Isn’t Afraid of Bears

Livepeer has always made a point of ignoring market noise and focusing relentlessly on fundamentals: development, users, the ecosystem, and network operations.

But given the scale of recent volatility, I thought it was worth outlining in some detail why gyrations in cryptocurrency prices are not a major concern for the project.

First, let me offer some context for those of you who are living through their first market downturn: While never welcome or enjoyable, these sorts of price cycles in crypto — as in other asset markets — are (relatively) normal.

We have seen many booms and busts during the process of building Livepeer — seen crypto asset prices soar into the stratosphere and fall to a fraction of their peaks. Throughout it all, the Livepeer community just keeps building, so it can emerge from any storm strong and stable.

Paradoxically, periods of market uncertainty are often when projects with real utility show their worth. This is actually a good time for Livepeer and other infrastructure projects to show the substance behind all the value our network delivers. Powering video streaming, enabling web3 social apps to grow and thrive, and being in the vanguard of the next wave of internet infrastructure — these are all powerful goals for our community to rally behind in periods of negativity.

There is another reason we can face the current market dramas with confidence. Because it raised significant funds when market conditions were favorable, Livepeer Inc. — one of the core companies that works on the Livepeer project — is well-capitalized, with multiple years of cash runway. This means we can keep innovating and growing the network according to plan.

Having said all this, I am fully aware that market gyrations do put a strain on the node operators who power our network, since they must cover their costs and fund their important work with LPT and ETH rewards. Ultimately, it is up to them to set the prices they will charge for powering streaming on the network, and to decide what incentives make it worthwhile to keep operating at scale.

I know the network team is preparing to conduct trials involving a range of varying transcoding prices. These are designed to open up the market, to test reliability in different regions under different prices, and to encourage competition. These experiments should yield some valuable feedback and insight.

I hope this perspective is helpful and reassuring for anyone feeling confused and uncertain in this downturn.

Booms and busts are a reality the world has lived with for centuries. One thing you can be sure of, though: whether markets are up or down, the Livepeer core team’s mission won’t waver. We won’t be worrying — we’ll be building.