LD Capital Research Report: Can Livepeer (LPT) break through its previous high?

LD Capital

2023-09-04 17:29

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Author: Lisa, LD Capital

1. Project Introduction

Livepeer is a decentralized video streaming network built on Ethereum. As a scalable platform-as-a-service, it provides a solution for the real-time media layer in decentralized development stacks, aimed at developers who want to add live or on-demand video to their projects. Livepeer can increase the reliability of centralized broadcasting services while reducing associated costs by up to 50 times. Currently, video streaming consumes 80% of all internet bandwidth, and companies distributing videos on the internet need to transcode them (transcoding refers to the process of obtaining the original video file and reformatting it to ensure the best viewing experience regardless of whether 2G or 5G bandwidth or different devices are used), while Livepeer can greatly reduce these costs. The following example illustrates how Livepeer works.

Alice is an application developer who is using Livepeer to add real-time video functionality to her high school sports event live streaming app. Bob, as the event coordinator, is responsible for using Alice's app to live stream his high school basketball game. When Bob opens the application and starts recording, the application sends the real-time video and live streaming fees to the Livepeer network, while Livepeer transcodes the video into a format that the audience can receive.

There are two main roles in the Livepeer network to ensure the quality of live streaming: Orchestrators and Delegators. Anyone can join the network and become an "Orchestrator" by running software that allows them to contribute their personal computer resources (CPU, GPU, and bandwidth) for transcoding and distributing videos, in exchange for fees. To have the right to do this kind of work on the network, one must have Livepeer tokens, or LPT. The purpose of Livepeer tokens is to coordinate, guide, and incentivize participants to ensure that the Livepeer network is as cheap, efficient, secure, reliable, and useful as possible. Delegators are Livepeer token holders who participate in the network by "staking" their tokens to Orchestrators. When broadcasters pay fees to the network, both Orchestrators and Delegators receive a portion of these fees as a reward for ensuring a high-quality and secure network.

二、Token Economic Model

The LPT token is in a fully circulating state, with a market value of $219 million and ranked 143rd.

In Livepeer, new tokens are minted and distributed to delegators and orchestrators in each round. A round is measured in terms of Ethereum blocks, with one round equaling 5760 Ethereum blocks. The average block time in Ethereum is 14 seconds, which means a round lasts approximately 22.4 hours. The current inflation rate for LPT is 0.03165%, with a total supply of 28,904,976.38 Livepeer tokens. The next round will reward a total of 9,264.04 newly minted Livepeer tokens to all participants, worth approximately $70,000. The annualized inflation rate corresponding to the current inflation rate is approximately 12%.

Livepeer's inflation rate will automatically adjust based on the staking rate, which is currently at 44.72%, and Livepeer refers to it as the "participation rate". Livepeer assumes a healthy balance between network security and token liquidity at a target rate of 50%. When the participation rate falls below this level, the inflation rate will increase by 0.00005% per round, and when it exceeds this level, the inflation rate will decrease by 0.00005% per round.

Three, Financing Information

LPT is also one of the coins held by Grayscale Fund. As of September 1st, Grayscale holds $4.108 million worth of LPT, and AMU ranks 10th among 14 currencies.

Four, Price Performance

LPT was launched in 2018, with the highest price appearing in November 2021. The current price has fallen 92.3% from the highest price.

The recent wave of market started on August 7th this year. LPT rose from 4.98 to 5.87 in a single day, an increase of 43%. On August 13th, it rose to a high of 9.26, doubling in a week. This morning at 9:30 and 15 minutes, it rose by 12%, but it has not yet broken through the previous high. Although the price is attempting to break through the $8 mark again, the open interest of LPT contracts is relatively low since the start of this wave of market, and there has not been a significant increase in open interest with the rise in price. Currently, the funding rate has fallen below -1%, and the number of long and short positions and the long and short positions of large accounts have both fallen to 0.81 and 0.72, respectively.

On the same day that the market started to move, large-scale transfers were observed in the on-chain data. The frequency of on-chain transfers in August was significantly higher than in the previous period.