Article

What Is Theta Network (THETA)?

Published on Dec 29, 2022

Updated on Apr 25, 2024

Theta Network is an Ethereum based decentralized streaming network (DSN) and an infrastructure provider for building Web3 applications. It facilitates buffer-free high-quality video streaming by leveraging its global pool of users who contribute their spare bandwidth and computing resources to relay videos on the Theta network. Developers can also build applications such as decentralized exchanges on top of the Theta blockchain.

To completely understand Theta Network, we first must highlight the real-world problem it solves. Be it YouTube or Twitch, all streaming platforms deliver video via centralized content delivery networks. As CDNs are geographically restricted and overwhelmed with the increasing video streaming demands, users often face issues like low-quality video streams and buffering. Theta Network solves such bottlenecks and significantly reduces video delivery costs by decentralizing the video streaming infrastructure using their patented blockchain-based technology.

Theta Network has two core components – Theta Blockchain and Theta Edge Network. The Theta Blockchain is responsible for facilitating payments, distributing rewards, and executing smart contract functions. In contrast, the edge network stores and delivers media (such as images and videos) on the Theta Network.

Now, let's look at what is THETA — the native token of the Theta network. The Theta Network is powered by its primary cryptocurrencies – Theta Token (THETA) and Theta Fuel (TFUEL). THETA is the native governance token of the Theta protocol and is used to run a node on the Theta network. TFUEL is used for operations such as distributing rewards to users who share video streams on Theta or deploy smart contracts on the Theta network.

What Is Theta Network – Key Facts

Theta aims to become the Ethereum of video streaming applications and media platforms.

Theta Network features esports, music, T.V., and movies, among other video streams.

Participants on Theta Network can share their unused storage and bandwidth on any P.C., mobile, Smart T.V., or IoT device and earn TFUEL tokens.

Theta Network has several products, such as a smart contract platform for building decentralized applications, Theta Edge Network, Theta Video API, ThetaSwap, ThetaDrop NFT marketplace, and Theta EdgeStore.

Theta's unique multi-layered proof-of-stake consensus mechanism enables it to process 1,000 transactions per second with zero carbon footprint.

Theta Network has 25 validator nodes run by popular companies Google, Samsung, Sony Europe, Blockchain Ventures, DHVC, Replay, etc.

How Does Theta Network Work?

Unlike traditional content delivery networks, Theta Network streams video via a decentralized streaming network (DSN) where computers share unused bandwidth for rewards.

Theta Network was built on Ethereum; however, it now has its native Ethereum-compatible blockchain to run its operations. As discussed in our what is Theta Network section, Theta has two major components – Theta Blockchain and Theta Edge. These two are maintained by three nodes – Validator, Guardian, and Edge nodes – and are secured by Theta's unique proof-of-stake consensus algorithm.

Now that you have a brief idea of how does Theta Network work, let's dive deep into its functioning:

Multi-Level Byzantine Fault Tolerance (BFT)

The Theta Blockchain uses a unique proof-of-stake consensus mechanism called multi-level BFT consensus that involves two distinct sets of nodes – Validator nodes and Guardian nodes – to validate transactions. The validator nodes finalize new transaction blocks on the Theta blockchain, while Guardian nodes seal blocks and run a check to identify malicious nodes or non-functional validator nodes. While there can be only a maximum of 31 validator nodes at any given time, there are over 3,000 guardian nodes on the Theta network at press time.

Edge Nodes

Apart from validator and guardian nodes, Theta Network also hosts Edge nodes that power its decentralized video streaming dapp — Theta EdgeCast. By running a Theta Edge node, you can relay streams on THETA.tv and other upcoming video platforms and earn TFUEL tokens as rewards. You can even broadcast your video streams by setting up an edge node software. 150,435 Edge nodes power Theta Edge Network from across the globe, and the number is increasing as we speak.

Off-Chain Micropayments Pool

To offset the transaction load on the blockchain and free up nodes for powering Theta's core data storage and delivery functions, Theta Network has an off-chain micropayments pool. It helps guardian nodes collect partial signatures from neighboring nodes before broadcasting the aggregated signature to the entire network. Using this aggregated signature gossip mechanism, nodes require fewer resources to execute communications on the network, thereby allowing them to dedicate more resources toward the network's core functions.

Smart Contract Platform

The Theta blockchain is smart contract compatible, enabling developers to build and deploy dapps for several use cases, such as crowdfunding, royalty distributions, and digitized ownership on the Theta Network.

While discussing what Theta Network is, we also mentioned that Theta is EVM compatible, meaning developers can easily port their dapps from Ethereum to Theta while using the same API calls to interact with the Theta blockchain. It is possible because Theta supports the entire Ethereum Dapp development stack. To further enhance Theta's smart contract capabilities, Theta launched Theta Token Minter, a no-code protocol to allow users to create new TNT-20 (similar to Ethereum's ERC-20 token standard) crypto tokens on the Theta blockchain.

What Is THETA Used?

Stake THETA To Run a Validator or Guardian Node on Theta

Unlike traditional video streaming platforms, Theta Network is community driven. You can stake THETA tokens to become a Theta validator or guardian node and earn rewards for your contribution. You need to stake a minimum of 200,000 THETA tokens to set up your validator node, while the guardian node requires you to stake at least 1,000 THETA tokens.

In our how does Theta Network work section, we underlined that there could be no more than 31 validator nodes at any given time on Theta. Only 31 nodes with the highest THETA staked can vote, propose, and add new blocks. The remaining nodes do not qualify as validator nodes and will not receive staking rewards.

Earn Passive Income

Running a validator or guardian node requires technical steps and can be complicated. If you are not tech savvy and still wish to earn passive income on your THETA investment, you can use OKX Earn. Our OKX Earn program offers a low-risk savings pool where you can earn passive income by simply depositing your THETA tokens. All you need to do is visit OKX Earn, search for 'THETA', and hit 'Subscribe' next to the THETA savings pool option.

Buy Cryptocurrencies

Suppose you hold a significant amount of THETA tokens in your crypto portfolio. In that case, you can trade some of your holdings for other cryptocurrencies like BTC, USDT, USDC to create a balanced portfolio. At OKX, you can trade THETA for major cryptocurrencies on our spot markets or try OKX Convert, where you can swap THETA for over 100 crypto assets.

Theta Team and History

Theta Network was founded in 2017 by Mitch Liu, a Computer Science and Engineering graduate from MIT, and Jieyi Long, who holds a PhD in Computer Engineering from Northwestern University. The advisory board of Theta Network is helmed by personalities like Steve Chen, former co-founder of Youtube, Justin KAN, co-founder of Twitch, Sam WICK (ex-SONY), and Chief Network Officer at Verizon Digital Media Kyle Okamoto, among others.

After Theta was announced in November 2017, the project conducted its first THETA token sale in January 2018. The Theta Network mainnet went live in March 2019. The next version of the Theta mainnet was introduced in May 2020 that added a two-layered consensus mechanism to the Theta blockchain introducing Guardian and Validator nodes. Mainnet 2.0 also launched Theta Edge Network, Theta's peer-to-peer video streaming infrastructure.

Theta Network further upgraded its network with Mainenet 3.0 launch in July 2021. With Mainenet 3.0, Theta Network became more than a decentralized video streaming platform. It added smart contract support allowing developers to deploy Dapps on the Theta blockchain. On April 9, 2022, Theta also announced Theta 4.0 which is expected to launch in Q4 of 2022. Theta 4.0 introduces 'Metachain', an interconnected network of blockchains that will help Theta achieve unlimited transactional throughput and sub-second transaction finality (more on this later in this post).

About THETA Tokenomics

THETA tokens have a total supply of 1 billion tokens. Theta Network hard-capped THETA's supply to make it highly expensive for anyone to acquire enough tokens to fraud the network.

Initially, Theta Network sold 300 million ERC-20 THETA tokens to raise $20 million in their initial coin offering. When Theta mainnet was released in 2019, holders received one native THETA token for each ERC-20 THETA held. Theta Network also capped the supply of THETA tokens on the Theta blockchain at 1 billion THETA.

Speaking about THETA distribution, initial token sales accounted for 30% of THETA's total supply, 7.49% tokens were allocated to the team, advisors were given 1.23% tokens, 12.5% of THETA tokens were distributed to partners, another 12.5% tokens were kept for network seeding, and the remaining 36.28% THETA tokens were kept in the reserves. As per Theta Network, over 60% of the fully diluted THETA supply is staked on the network.

How Is THETA Mined?

The Theta Network is powered using a proof-of-stake consensus mechanism and has a hard-capped supply of 1 billion THETA units. New THETA tokens will never be created and thus you cannot mine THETA tokens. Nonetheless, you can earn TFUEL tokens as staking rewards to secure the Theta Network. TFUEL tokens have an annual inflation of 5%.

Theta vs Livepeer: Which Is the Better Decentralized Video

Streaming Platform?

Livepeer is a decentralized video streaming protocol using which you can add live or on-demand video streaming capability to your application. Livepeer and Theta have similar goals of providing video streaming at inexpensive rates. Here's a side-by-side comparison of these two leading decentralized video streaming platforms.

Partnerships

Theta has partnerships with top firms like Google, Sony, Samsung, DHVC, Blockchain Ventures, etc. On the other hand, Livepeer has partnerships with blockchain giants like Polygon. Livepeer is also popular among decentralized projects. Around 40% of projects submitted to NFTBerlin used Livepeer's video streaming infrastructure.

Roadmap

Both Theta and Livepeer have a well laid out roadmap. Livepeer aims to enhance their process of verifying that the videos are transcoded adequately via their network and optimize their user experience. Theta plans to roll out their Metachain in Q4 2022, allowing developers to build dapps on independent customizable blockchain infrastructure called subchains.

Pricing

Streaming a one-hour live event on traditional solutions like Amazon Web Services costs $70-$1544, depending on the number of attendees. Theta and Livepeer both cut this cost significantly and provide budget-friendly streaming services. Theta has a $97 monthly payment plan as well as plans depending on usage. To be precise, it costs $0.0006/min depending on the amount of video streamed on Theta. On the other hand, Livepeer charges $0.015 per G.B. video streamed under their pro plan.

Theta Partnerships & Investors

According to Crunchbase, Theta Labs, the company behind Theta Network, has raised a total of $113 million. Theta is funded by 20 investors, including gumi Cryptos Capital (gCC), Sierra Ventures, Heuristic Capital, Samsung NEXT, AlphaCoin Fund, GFR Fund, etc.

Theta Network has partnered with leading names in the industry. Samsung partnered with Theta for their V.R. platform. Theta has also collaborated with Gumi Cryptos to live-stream popular crypto conferences such as Consensus and Crypto Asia Summit.

Theta has also secured partnerships with Lionsgate, MGM, World Poker Tour, NASA, Cinedigm, and Decentraland, to name a few.

Theta's Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis)

Strengths

Theta's strength lies in solving content delivery roadblocks to provide high-quality video streaming without any buffers while incentivizing users to participate in their network. Moreover, be it pioneering decentralized video streaming, deploying off-chain micropayment pool, bringing EVM compatibility, introducing products like Theta Video API, or recently announcing their Mainnet 4.0, Theta is constantly upgrading its network and products to provide the quality services to its users. This is one of the biggest strengths of the Theta network.

Weakness

The Theta network has a decentralized consensus for validating transactions on Theta as it has a set of guardian nodes in addition to its enterprise validator nodes. Nonetheless, the fact that only enterprise validator nodes can participate in the governance of the Theta Network makes Theta's control a centralized process.

Opportunities

As one of our takeaways from our 'What is Theta Network' section mentioned, Theta has partnerships with some of the biggest companies in the world, such as Google, Sony, and Samsung. With such companies as Theta's partners and its proven decentralized video streaming engine, Theta has the potential to attract more users and enterprises to their platform. Moreover, with their Metachain on development, Theta can soon become a hub for media and entertainment applications.

Threats

The biggest threat to Theta is different from the traditional competitors, as they adopt Theta's decentralized video streaming service. While it is true that Theta currently has over 150,000 Edge nodes, it might not be sufficient to compete with the scalability of video streaming giants like YouTube.

Moreover, decentralization might act as a double-edged sword for Theta Network. Theta Labs have no control over the video content streamed on Theta, and this might be problematic for Theta in cases when users stream pirated content. Say Amazon Prime Video partners with Theta to stream its movie series, and some users are relaying a pirated version of that series on EdgeCast. The partnership would immediately come to an end.

Theta Roadmap

The core focus of Theta Network is to expand its video and data delivery services. The platform has recognized the need for video-on-demand, NFTs, and digital collectibles and announced its new TNT-20 token TDROP to reward NFT liquidity mining. Milestones for Q3 2022 include launching EdgeStore Alpha gateway, Theta Video API advanced analytics, and live streaming support via Theta Video API.

In the last two quarters of 2022, Theta Network plans to roll out significant releases such as Edgestore Beta, decentralized Theta Video API, Edge streaming, etc. The major highlight of Theta's 2022 Q4 roadmap is Mainent 4.0, called Metachain.

Theta Updates, News, and Highlights

Theta Network started expanding its services to domains like metaverse in 2021. The project partnered with Decentral Games to help them increase their capacity to stream events in their metaverse. To further expand their services, Theta launched Theta Video API, enabling any application to embed video and relay it via their decentralized video streaming architecture.

In one of their significant milestones in October 2021, Theta went cross-chain with the launch of the Theta-Ethereum bridge on Theta Tesnet. Theta also secured another patent – U.S. Patent 11,153,358 – for their data caching and delivery technology. By the end of 2021, Theta open-sourced their TDROP NFT marketplace trading engine and TDROP governance smart contract on Github.

Theta was also in the news for their partnership announcements for launching NFTs on Theta blockchain. Katy Perry, Jukin Media, Samsung, American Idol, and Sony launched their NFTs on Theta. The major highlights of Theta for 2022 were the launch of its livestream support for Theta Video API and the addition of Replay, a leading blockchain-based video tracking, and payments platform, to their list of Theta validators.

Theta 4.0 – A Sneak Peek Into Theta's Future!

Every media and entertainment company has unique business needs. For example, some companies might be comfortable allowing participants to join the consensus, while others require a permissioned environment where only trusted partners can participate in network activities. Theta understands that there are better blockchain solutions than a one-size-fits-all blockchain infrastructure. Entertainment companies now require custom blockchain environments to migrate traditional services to a Web3 ecosystem. Theta Metachain provides just that!

What Is Theta 4.0?

Theta Network Mainnet 4.0 is called the Metachain and is expected to launch in Q4 2022. The metachain provides a scalable, flexible, and customizable blockchain infrastructure allowing companies to deploy their decentralized applications on their independent blockchain in a plug-and-play fashion. It is aimed to help video platforms, ticketing companies, metaverse environments, and other enterprises to adopt a blockchain infrastructure to build next generation applications.

The Theta Metachain is made up of the main chain called Theta mainnet and an unlimited number of subchains. With such multi-chain architecture, Theta directly competes with blockchains like Cosmos and Polkadot. Companies can launch their dapps on their native subchain using Theta's easy-to-use SDK and connect the application to the main Theta chain. As each subchain will execute transactions independently, Theta Metachain can theoretically achieve unlimited transactional throughput.

The best part is that creating a subchain doesn't require developers to take approval from Theta Labs. Companies can register, launch it is dedicated subchain, and integrate Theta's video, computing, and storage solutions, such as Theta Video API, Edge Store, and NFT-based digital rights management (DRM).

Dual-Token Architecture

If you remember from what is Theta Network section, Theta Network features a dual token system with THETA used for running a node and TFUEL for operational activities. Theta Metachain will also feature a dual-token system where TFUEL will be used as the gas token for on-chain transactions, and each subchain will have its native TNT-20 governance token.

You must be wondering what about the THETA token? What role does it play in Theta's Metachain? The sub-chain architecture with native governance tokens for each chain only increases the demand for both THETA and TFUEL tokens. To launch a subchain on Theta Metachain, developers will need to pledge THETA as collateral, while as discussed, TFUEL will power on-chain transactions on the Metachain.

Custom Consensus Mechanism

In addition to a native governance token for each subchain, Theta Metachain also enables developers to adopt a consensus protocol that suits their needs. For instance, one subchain can decide to implement permissionless proof-of-stake consensus while another subchain made for corporate use cases can adopt permissioned proof-of-authority consensus protocol.

Where To Buy THETA?

Being one of the largest cryptocurrency exchanges in the world, OKX is the best place to buy THETA. High-liquidity trading pairs, fiat-on ramp, easy-to-use interface, credit card payments, OKX has everything you would want in a cryptocurrency exchange. To start trading cryptocurrencies on OKX, create your OKX account by using your email or phone number. Now, buy THETA with your preferred fiat currency, purchase it using high-liquidity trading pairs, or swap your existing crypto assets for THETA at zero slippage.

How To Store THETA?

After you buy THETA on OKX, we safely store your purchased THETA tokens in your OKX account wallet. Our multi-layered security protocols, semi-offline storage, and security features like withdrawal passwords and anti-phishing codes keep your THETA funds secure while allowing you to send and receive THETA easily. To check your THETA balance on OKX, hover over 'Assets' on the top-right of the OKX dashboard and select 'My assets'.

To move your THETA balance from OKX to Theta's official wallet, select 'Withdraw' under 'Assets' menu. On the balance withdrawal page, select 'THETA' under the currency field and choose a withdrawal method as well as the blockchain network. Next, input the withdrawal amount and specify your Theta address to complete your withdrawal.

How To Stake THETA?

Stake THETA to Set Up a Validator Node

To begin with, you need to set up your validator node on the Theta Network. Once you have configured your validator node, open the Theta web wallet and select 'Deposit Stake' on the staking menu. A pop-up dialog box will appear. You must select 'Validator Node' on the STAKE TYPE drop down menu. Now query your validator address, and input the correct address in the VALIDATOR NODE HOLDER field. Lastly, specify the amount of THETA you wish to stake in THETA STAKE AMOUNT and hit 'Next' to complete your deposit.

Stake THETA To Run a Guardian Node

Once you install the Theta guardian node on your operating system, open your Theta web wallet and select the 'Stakes' tab from the top menu. Next, tap on the 'Deposit Stake' button and select 'Guardian Node'. You will see the Guardian Node Holder (Summary) field on the Deposit Stake form. There, enter the text string from your Guardian Node app. Now, fill in the amount of THETA (minimum 1000 THETA) and click 'Deposit Stake'.

Please note that you should have at least 1 TFUEL in your wallet to pay for the transaction fee. After you have reviewed your staking information, input your wallet password and click 'Confirm and Deposit Stake' to confirm your stake.

FAQs

What Is Theta Video API?

Theta Video API allows you to add a video to any website or application without uploading it to a central server, content delivery, or video hosting application. You can upload a video clip using a few lines of code, and the Theta Video API will give you a playback link you can add to your website where users can watch the video.

How To Set Up a Theta Edge Node and Earn TFUEL Rewards?

You don't need to stake THETA tokens to run a Theta Edge Node on the Theta Network. You can download the Theta Edge Node software for Windows or macOS and you are all set to earn TFUEL tokens. You can track your earnings in the 'Cache/Compute' section.

Does Theta Network Use Patented Technology?

Yes, Theta Network has patented technology to power their operations. It has secured patents for data caching and delivery, peer-to-peer data streaming and delivery, ultra-high transaction throughput micropayments, methods and systems for peer node discovery, NFT-based digital rights management via NFTs, and denial-of-service attacks prevention in decentralized edge networks.

How Much Capital Do I Need To Run a Node on Theta Network?

You need a minimum of 1,000 THETA tokens to set up a guardian node and at least 200,000 THETA to become a validator node on Theta Network.

How Are TDROP, THETA, and TFUEL Tokens Related?

TDROP is a cryptocurrency used to reward activities on the ThetaDrop NFT marketplace, while THETA and TFUEL are primary crypto tokens of the Theta Network. TDROP utility is tied with THETA and TFUEL to reward transactions on Theta. Users stalking THETA will get 20% of the total TDROP supply. Elite Edge Node operators earn 1% of TFUEL sales from Theta NFTs they host.