The TFUEL Use Case

One of the most important aspects of the Theta mainnet launch was the introduction of Theta Fuel (TFUEL), the “gas” or payment token of the Theta Network. TFUEL powers on-chain operations like payments to relayers for sharing a video stream, or deploying or interacting with smart contracts. Relayers earn TFUEL for every video stream they relay to other users on the network. You can think of Theta Fuel as the “gas” of the protocol. In conjunction with THETA, the staking and governance token of the protocol, these two tokens make up the economic system of Theta Network.

To better understand how each token functions in the Theta Network, let’s first take a look at how THETA.tv and our partner media platforms interact with the Theta Network, and the benefits to doing so.

Theta Network — Value Proposition

1. Platforms that integrate the Theta Network benefit by lowering their CDN / video delivery costs, as users relay video streams peer-to-peer and reduce the platform’s need to pay for video delivery. Users are rewarded with TFUEL, which attracts new users, and leads to incremental revenues from user engagement.
2. To use the Theta Network and realize these benefits, platforms must purchase TFUEL, or stake Theta Tokens (THETA) to generate their own TFUEL.
3. Demand for THETA/TFUEL increases the network value and therefore network security, by increasing the cost of a malicious actor acquiring sufficient stake to threaten the network.

TFUEL Token Flow

Here is a (simplified) example of how TFUEL flows through the Theta ecosystem:

Validator Nodes and Guardian Nodes secure the network by staking THETA, and earn newly-generated TFUEL as a reward. TFUEL is then provided to the market (exchanges) where it can be acquired by video platforms or other media networks that incorporate the Theta Network.

Video platforms need TFUEL to power Theta Network rewards, to seed their viewers with the TFUEL needed to pay relayers for video segments. Relayers that earn TFUEL can then either donate to streamers, spend it back on the platform for content or products, or withdraw it for their own use.

A deeper dive on TFUEL

This is a high-level overview of how TFUEL will operate; in our next blog, we’ll take a deeper dive into how TFUEL is being used on THETA.tv, stats so far on THETA.tv TFUEL usage, and a preview of the TFUEL use case in upcoming mainnet partner integrations.

Cheers,

The Theta team