A Complete Guide to the Theta Network

Forward the original title: Theta Network: A decentralized video transmission network based on blockchain

1. Project Introduction

Theta Network is a decentralized video delivery network based on blockchain, aimed at solving some core issues in the current video streaming field.

Traditional video streaming services face the so-called “last mile” delivery problem that their dependent content delivery networks face. Typically, Content Delivery Networks (CDNs) require data centers to be established near the audience worldwide, but due to the limited number of these data centers, they are not close enough to most viewers. This causes a bottleneck in the streaming media transmission pipeline, resulting in unstable streaming media and poor image quality.

In response, Theta Network’s solution is to build a peer-to-peer network, incentivizing viewers to share excess computing and standby bandwidth resources. Because the distance between viewers’ devices is much closer than the distance to the CDN data centers, it resolves the last-mile delivery problem.

This network and protocol are open-source, meaning that anyone can build on the Theta blockchain. Content providers can develop decentralized applications specifically for their audience. DApps on the network can provide a range of entertainment types, such as movies and TV, music, esports, live broadcasts, and remote learning. Video platforms already running on the Theta Network include Samsung VR, Cinedigm, Shout! Factory, and THETA.tv.

Theta is the core of its blockchain operations, owning two native cryptocurrencies: THETA coins (used for voting on protocol changes) and TFUEL (used for executing transactions).

2. Core Mechanism

Theta Network’s core mechanism focuses on its unique decentralized video streaming technology and economic model, which work together to improve video transmission efficiency and incentivize network participants.

The following is a detailed introduction to its core mechanism:

Multi-level BFT Consensus Mechanism

Theta Network uses an improved Byzantine Fault Tolerance (BFT) consensus mechanism, an algorithm that allows a certain number of malicious nodes in the network without affecting the overall security and consistency of the network. Theta’s consensus mechanism improves its efficiency and scalability by introducing two levels - a small-scale collection of validator nodes and a larger group of guardian nodes. The validator nodes are responsible for producing blocks and processing transactions, while the guardian nodes participate in the final consensus process, increasing the network’s degree of decentralization and security.

Resource Sharing and Incentive Mechanism

Theta Network innovatively applies blockchain technology to video transmission, encouraging users to share their unused bandwidth and computing resources to support video content distribution. Users can earn Theta Fuel (TFUEL) as a reward for sharing resources. This operational token of the network is used for transaction fees, video streaming services, and other uses. This mechanism encourages more users to participate in the network, enhancing the network’s bandwidth and caching capacity, thereby improving the quality of video transmission and reducing costs.

Decentralized Edge Network (CDN)

Traditional Content Delivery Networks (CDNs) rely on distributed server networks to provide content to end-users, reducing latency. Theta Network, on the other hand, has established a decentralized edge network (DEC), utilizing the idle computing resources and bandwidth of users worldwide to cache and transmit video content. This not only reduces the cost of relying on traditional CDN services but also improves transmission efficiency and scalability.

Smart Contract Platform

Theta Network has integrated a smart contract platform on its blockchain, allowing developers to create decentralized applications (DApps), especially those that require video content distribution. Through smart contracts, content creators, advertisers, and other participants can interact directly, without intermediaries, thereby improving transparency and efficiency.

Dual Token System

Theta Network uses a dual token system, including Theta Token (THETA) and Theta Fuel (TFUEL). THETA is mainly used for governance, i.e., holders can participate in network governance decisions, such as upgrades and protocol parameter modifications, by holding THETA. TFUEL, on the other hand, is the network’s utility token, used for transaction fees, executing smart contracts, video streaming services, etc.

These mechanisms together form the core of Theta Network. Through decentralization, resource sharing, incentivizing participants, and improving video transmission efficiency, Theta Network aims to solve the challenges faced by traditional video distribution networks, providing an efficient, economical solution for future video streaming media.

3. Tokens: THETA and TFUEL

Theta Network uses a dual token system, including Theta Token (THETA) and Theta Fuel (TFUEL), these two tokens play different but complementary roles in the network.

Theta Token (THETA)

Main use: Theta Token (THETA) is mainly used for network governance. Users who hold THETA can participate in Theta network’s governance decisions, such as proposing or voting for network upgrades and parameter adjustments. This mechanism encourages token holders to actively participate in the development and maintenance of the network’s ecosystem.

Total Supply: The total supply of THETA is fixed, with an upper limit of 1 billion tokens. The fixed supply helps prevent inflation, ensuring the stable value of the token.

As of now, the price of the THETA token is 2.54 USD, a slight decrease of 0.09% in the past 24 hours, with an impressive annual increase of 127.71%. The market cap of THETA is 2,537,939,366 USD, representing the total value of all circulating THETA tokens. The ratio of the 24-hour trading volume to market cap is about 1.57%. Overall, THETA has experienced some fluctuations over time, with the far right of the chart showing significant peaks and subsequent declines. The current price seems to have stabilized, but a slight increase in volume coupled with a price decrease may indicate increased selling or trading activity in the near future.

Theta Fuel (TFUEL)

Main use: Theta Fuel (TFUEL) is the “fuel” of the Theta Network, used for executing transactions, running smart contracts, incentivizing content sharers, video streaming services, and advertising. TFUEL is vital for transactions and operations within the network, as it provides the necessary economic incentives, ensuring the healthy operation and development of the network.

How to obtain: Users can earn TFUEL by sharing excess bandwidth and computing resources, watching advertisements, participating in content distribution, and more. In addition, TFUEL can also be traded on major cryptocurrency exchanges.

Supply mechanism: Unlike THETA, the supply of TFUEL is not fixed. New TFUEL can be generated as a reward for network participants (such as content sharers and validation nodes), a process similar to cryptocurrency mining. This supply mechanism of TFUEL aims to continuously incentivize users to contribute resources, supporting the operation of the network.

Token Complementarity

In the Theta network, THETA and TFUEL play complementary roles: THETA mainly focuses on network governance and security, while TFUEL is the fuel for daily transactions and operations. This dual-token design ensures both the decentralized governance of the network and meets the economic needs of network operations. Through this mechanism, Theta Network can encourage users to participate and contribute resources, while maintaining the health and safety of the network.

4. EdgeCloud

EdgeCloud is a decentralized software platform that the Theta team plans to launch in May this year. It aims to provide unlimited GPU processing power for any AI or video task at a very reasonable price. This platform combines the best features of cloud computing and is driven by the Theta edge network, which consists of nearly 10,000 active edge nodes worldwide, making it one of the largest distributed GPU computing clusters in the world. Theta EdgeCloud plans to launch its first phase on May 1, 2024.

Key point:

Decentralized AI Computing Platform: Theta EdgeCloud will enable developers, researchers, and businesses of all sizes to access GPU processing power at the best cost. Advanced AI developers will be able to manage the entire AI pipeline development, from prototyping with Jupyter Notebook to training AI models, including hyperparameter tuning, neural architecture search, and model fine-tuning. Then, these models can easily be deployed and serviced on the EdgeCloud’s GPU network - optimized, immediately accessible, and scalable. These can ultimately run on ray clusters or raw machines for AI experts seeking more control.

Theta Edge Network: Launched in 2021 in the form of Mainnet 3.0, focusing on GPU-intensive video processing, including encoding, transcoding, and distribution.

Processing Power: The network’s high-performance GPU nodes worldwide provide about 80 petaflops of processing power, equivalent to about 250 Nvidia A100s.

Decentralized Hybrid Cloud Architecture: This enables Theta EdgeCloud to easily run large language models and AI models from text to video, such as Stable Diffusion and Llama2.

Software Development: In 2021, Theta filed its first patent for its edge computing platform, a blockchain network supporting smart contract functionality, promoting the establishment of the next generation of hybrid computing architecture.

Upcoming Features: AI developers will be able to conveniently select and deploy popular models, and build their AI-driven applications on Theta EdgeCloud. Plans to launch an upgrade for edge node software with Elite+ Booster features in the spring/summer.

Community participation and support: The Theta team encourages everyone to join the discussion via channels such as Discord and Twitter, to jointly promote development when EdgeCloud launches its first phase.

Theta EdgeCloud demonstrates Theta Network’s expansion ambitions in the field of AI and video task processing, while also proving its profound strength in distributed edge computing. As it develops and deploys, we can expect more innovative applications and services to emerge.

5. Team

Theta was founded in 2018 by CEO Mitch Liu and CTO Jieyi Long.

Mitch Liu holds degrees in computer science and engineering from MIT and a master’s degree from Stanford University’s Graduate School of Business. He has also co-founded various other projects such as mobile social gaming studio Gameview Studios, advertising and app monetization platform Tapjoy, and live streaming dApp THETA.tv.

Long holds a PhD in computer engineering from Northwestern University and co-founded THETA.tv with Liu. He has developed multiple patented technologies including instant video game replay and virtual reality live streaming. The Theta leadership team also includes CPO Ryan Nichols, formerly director of WeChat applications at Tencent.

Notably, the project has a range of investors including Samsung, DHVC, IBC and Sony Innovation Fund. Additionally, Theta’s advisory board includes YouTube co-founder Steve Chen, Twitch co-founder Justin Kana, and Verizon executives Rakuten Viki and CJ Hello.

Theta Network has so far known to have one round of financing, which took place on the unknown risk financing on May 3, 2023.

6. User Guide

How to use the Theta network?

Theta community members can stake THETA to become guardian nodes. They can also host Theta edge nodes by contributing computing resources for video capture, transcoding, caching, and relaying. THETA tokens are used for staking as validator and guardian nodes, as well as for participating in protocol governance.

How to choose a Theta Network wallet?

• THETA tokens can be stored in the project’s own Theta Wallet, which is available for Android, iOS, and the Web.
• Hardware wallets or cold wallets like Ledger or Trezor provide the most secure cryptocurrency storage option through offline storage and backup. However, they might require more technical knowledge and be a more expensive choice. Therefore, they might be more suitable for experienced users storing a large amount of THETA.
• Software wallets offer another choice, being free and easy to use. They can be downloaded as smartphone or desktop applications and can be hosted or non-hosted. For hosted wallets, the private key is managed and backed up by the service provider on your behalf. Non-hosted wallets use the security components on the device to store the private key. While convenient, they are considered less secure than hardware wallets and might be more suitable for a small amount of THETA or more novice users.
• Online wallets or web wallets are also free and easy to use and can be accessed from multiple devices using a web browser. However, they are considered hot wallets and may not be as secure as hardware or software alternatives. Since you might trust the platform to manage your THETA, you should choose a reputable service with a good track record in safety and custody. Therefore, they are best suited for holding a small amount of cryptocurrency or for more frequent trading.

7. Future Prospect Analysis

Theta Network has an ambitious development blueprint for 2024, mainly focusing on the launch of Theta EdgeCloud.

The company’s 2024 plan is to release EdgeCloud, the next-generation edge network, including cloud-hosted nodes operated by Theta and Theta Elite+ Booster modules to enhance the operation of Elite Edge Nodes (EEN). The focus will be on developing MetaChain, EdgeCloud, and DePIN (Decentralized Private Network). New adoption metrics and sub-chain statistical data will be introduced, supporting new ecosystem projects, sub-chains, TN20 tokens, and staking. The Theta Video API will be enhanced with features such as self-service level NFT DRM support for live and on-demand, as well as advanced dashboards, among others.

Of course, as an innovator in the field of video streaming and distributed technology, Theta Network also faces a series of challenges in the future.

Firstly, it is still a relatively new project, and longevity plays a significant role in determining a platform’s reliability. Secondly, its liquidity is low. Additionally, the centralized and privatized initial token issuance reduces transparency, and Theta.TV requires a high level of video buffering, among other notable disadvantages of the project.

Moreover, with the increase in network users and use cases, ensuring seamless scaling of the network to meet growth needs is a challenge, including maintaining low latency, high throughput, and optimized network performance. Furthermore, while Theta’s technological potential is enormous, the adoption speed of users and content creators may affect the success of the network. The simplicity of the user experience and the practicality of the network are crucial to attracting non-technical users. Maintaining the economic model’s stability of Theta tokens (THETA and TFUEL), including token supply, demand, and incentive measures, is crucial to ensure long-term participation of network participants.

In conclusion, the prospects of Theta Network depend on various factors, including technological innovation, ecosystem growth, community participation, changes in the regulatory environment, and market competition. Despite facing challenges, Theta Network uses blockchain technology to solve practical problems, has a clear growth strategy, and a robust partner network, demonstrating its potential as an industry leader.

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