Weekly insight into blockchains and Web3 apps
The Theta blockchain network is based on a peer-to-peer protocol that enables participants to be rewarded with payments for content distribution. The advisory board includes Twitch co-founder Justin Kana, YouTube co-founder Steve Chen and several Verizon senior executives who bring a wealth of experience in online content and live streaming.
This week we shine a light on the Theta Network, its ecosystem of dapps and significant milestones. Theta Network is not a decentralized Youtube or a decentralized Twitch. Instead, Theta is the underlying blockchain and decentralized storage and delivery infrastructure that can power the next generation of Web3 video streaming and media entertainment platforms.
Online audiences consume increasing amounts of video content, both live and pre-recorded, via YouTube, Spotify, Netflix, and several other platforms. Arguably, the next frontier in online streaming is video delivery platforms that reward the community, powered by blockchains like Theta.
If you’re looking for the next Spotify, Google, or Amazon on the blockchain, DappRadar can help with our weekly Dapp Trends articles. With so much happening across various categories and verticles, it’s crucial to stay abreast of vital info to uncover which blockchains, dapps, and NFT projects generate value and build audiences for the right reasons.
At DappRadar, we track more than 11,500 dapp projects across more than 40 blockchains, and these weekly trending articles dive into the latest and most exciting projects and ecosystems. These articles aim to share this knowledge and information with others who can dig deeper and make their own decisions.
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Video industry context
Seventeen years have passed since Youtube went live. Video has undoubtedly become one of the people’s most important forms of entertainment. Before diving into Theta, it’s essential to understand the context in which the network finds itself and the current state of play in the video streaming industry.
The revenue of the global video streaming market stood at $70.845 billion in 2021, according to Statista. This number will likely hit around 116 billion by 2026. Apart from entertainment, more video communication adoption occurs in businesses and education due to the pandemic. Massive utilization of live video streaming by various industries further augments the growth.
Regarding business models, there are three types: subscription-based, advertisement-based, and transactional-based/rental. These products aim to bring higher-engagement bonds between users and content creators. Live streaming platforms like Twitch open up a new market segment providing real-time interactions. Also, it introduced an audience tipping system as part of the revenue model.
With innovations emerging in this area, the user base multiplies. However, bandwidth crunch and latency issues encountered during streaming may restrain the market growth. As a result, the competition of video technology companies is heating up, striving to make breakthroughs in the above problems to ensure user experience. This is where Theta Network comes into play, merging video with blockchain technology to empower citizens of the metaverse.
Theta Network is a dual network consisting of the Theta blockchain and the Theta Edge Network. The Theta blockchain provides payment, reward, and smart contract capabilities, while the edge network is responsible for storing and delivering media assets like images and videos.
Theta supports Turing complete smart contracts and is fully compatible with Ethereum, enabling a wide range of dapps to flourish on Theta. Additionally, smart contract developers can quickly jump over to building on Theta by porting over existing Ethereum-based contracts.
Additionally, Theta supports the Ethereum RPC API, similar to BNB Chain and the Polygon Network. Theta utilizes a proof-of-stake consensus mechanism which means participants lock large amounts of THETA tokens to gain the right to process transaction blocks.
Fees on the Theta network are near zero and, after a proposed increase, would still be sufficiently low and cost-effective for smart contracts and dapps. As more smart contracts are deployed on Theta, including video platform rewards and micropayments, NFTs, DeFi, and other dapps, significantly more TFUEL will now be burned by the usage of the Theta blockchain.
Theta Network revolutionizes the media and entertainment industry by providing a blockchain-enabled infrastructure for video delivery. Specifically, Theta’s infrastructure empowers existing video and media platforms to generate incremental revenues and reduce content delivery costs. Furthermore, it rewards users for sharing their spare storage or bandwidth on digital devices.
Vastly experienced team and advisors
The Theta Labs team comprises experienced technologists and media executives with previous roles at Netflix, Amazon, Samsung, Vimeo, and Salesforce. The team is led by CEO Mitch Liu, cofounder of Gameview Studios and Tapjoy, and CTO Jieyi Long, the co-founder of MadSkill Game Studios, collectively holding over a dozen patents in blockchain, video, streaming, VR, and NFTs.
Theta Labs’ unique combination of blockchain, video, and entertainment experience is arguably the key to driving Theta to be a leading blockchain for media and entertainment.
Leading validators & media partners
Theta’s enterprise validator and governance council are led by global leaders including Google, Samsung, Sony, Creative Artists Agency (CAA), Binance, Blockchain Ventures, DHVC, and gumi.
Theta leverages its user base of millions of viewers on the Theta Network to instill its peer-to-peer video network and premium content partnerships with Lionsgate, MGM Studios, NASA, and others. Popular video platforms integrated with Theta infrastructure include CONtv Anime, Party Poker, World Poker Tour, Cinedigm, Samsung VR, GameTalkTalk, MovieBloc, Ultra, GFUEL, and other OTT media, entertainment, and live streaming services.
Strategic corporate investors include Samsung NEXT, Sony Innovation Fund, Bertelsmann Digital Media Investments (BDMI), Creative Artists Agency (CAA), and Silicon Valley VCs, including DCM and Sierra Ventures.
In April 2022, Theta Labs announced the Theta Metachain concept. Targeted to be launched on Dec 1, 2022, the Theta Metachain is an interconnected network of blockchains, a chain of chains. It is also worth mentioning that the Theta Metachain is the same as the Theta Mainnet 4.0.
The goal is to allow permissionless scaling of the Theta blockchain network to achieve potentially unlimited transactional throughput and a 1-2 seconds or even subsecond block finalization time.
The Theta Metachain consists of one main chain and an unlimited number of subchains. The main chain, in this case, refers to the existing Theta mainnet. Theta will offer an easy-to-use SDK that developers can quickly use to launch a subchain and plug it into the main chain.
Since each subchain can execute transactions independently, this provides a viable path to infinitely scale the processing capacity of the Metachain. The subchain SDK will implement a built-in interchain messaging channel that connects the subchains and the main chain and thus allows crypto assets like TNT20/721 tokens to flow freely across the chains.
The process of creating a subchain is permissionless, meaning that anyone can register and launch a subchain. No approval from Theta Labs is required. Initially implemented as a multi-chain solution, the Theta Metachain can be extended into a zk-rollup by adding a few gadgets. Such an extension can achieve a higher level of security guarantees.
To learn more about Theta Metachain, please check out the Theta Mainnet 4.0 whitepaper.
Dual Token Design
THETA is the governance token of the Theta protocol. It is used to stake as a validator or guardian node, contributing to block production and the protocol governance of the network. By staking and running a node, users will earn a proportional amount of the new TFUEL generated. The supply of THETA is fixed at 1 billion and will never increase.
Theta Fuel (TFUEL) is the operational token of the protocol. TFUEL is used for on-chain operations like payments to Edge Node relayers for sharing a video stream or for 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 TFUEL as the gas token of the protocol. There were 5 billion TFUEL at the genesis of the blockchain, and the supply increases annually at a fixed percentage set at the protocol level.
The Mainnet 3.0 upgrade brought a critical protocol extension with the introduction of TFUEL burning, where Elite Edge Nodes now burn at least 25% of each TFUEL payment to the network. In addition, network transaction fees and smart contract fees are also burned, taking these TFUEL out of circulation.
Theta Drop NFT marketplace
The Theta Drop NFT marketplace was released on the Theta Network in 2021 and opened with the World Poker Tour digital collectibles collection. The main focus of Theta Drop NFT marketplace is the esports, gaming, and entertainment industry. Theta Drop accepts deposits from Credit Card but does not support PayPal.
Theta Drop is a real-time NFT marketplace, i.e., NFT drops and auctions are streamed live. This unique feature is aimed at increasing user engagement on the platform. It also has tie-ups with cable broadcasters and live media for broadcasting live streams. At writing, the ThetaDrop NFT marketplace is the leading dapp on Theta and accounts for around 8,000 on-chain users and approximately 20,000 transactions every month.
As with all NFT marketplaces, the strength of the collectibles and IPs available there can set it apart from the competition. As seen with marketplaces like VeVe on Immutable X, a potent combo of in demand collectibles and a smooth UX can win users over quickly. The list of ThetaDrop partners is impressive and includes known media brands such as Katy Perry, Fail Army, World Poker Tour, Idol Philippines, Dionne Warwick, and many more.
Most of the collectibles on ThetaDrop have a low average price compared to blue-chip NFT collections on Ethereum. So far, the performance of the marketplace shows real promise. Since its launch, the marketplace has attracted more than 13,500 traders, generating over $181 million in trading volume.
Samsung is a fan
Unlike many networks and protocols that use expectation to drive interest, Theta has already developed and solidified partnerships with leading media partners such as Samsung.
The relationship with Samsung runs deep, and the two companies have partnered on several campaigns. Including an NFT digital collectibles project in February 2022 to celebrate the Galaxy S22 and S8 Tablet launch. Pre-order buyers of the above models in Korea could claim free NFTs by registering on Theta Network’s NFT marketplace – ThetaDrop.
The process involved using a unique code received via verification through the Samsung Members app. At the time, Liu said the collaboration “exemplifies global adoption of Theta’s blockchain technology.” And that he looked forward to building a long-term community through this opportunity.
In August 2022, Samsung Electronics signed a memorandum of understanding (MOU) with partners, including Theta Labs, to operate an NFT ecosystem for its new range of Galaxy mobile phones. Samsung intends the NFTs to serve as a way to deliver practical benefits such as customer discounts and an authentication tool.
A seamless digital experience of the metaverse heavily relies on the maturity of video technology. Despite the rapid evolution in the past decade, the latest video technology still faces issues, such as latency. The network strives to bring the metaverse people dream about with its cutting-edge video technology.
Theta Network aims to leverage blockchain technology to create the first decentralized video streaming and delivery network. It allows video viewers to collect incentives to share redundant computing and bandwidth resources. In addition to a peer-to-peer network, the company also provides comprehensive developer tools to fuel the metaverse boom.
- Theta Video API – Theta Video API is a protocol that provides an easy-to-use method for video integration. First, the developer/user can submit a video and get an embeddable URL for that video. Next, the developer/user can place the URL on any website or virtual world to distribute the video using the decentralized Theta network.
- Decentralized video distribution – Theta’s patented Peer Discovery technology utilizes advanced algorithms to enhance the robustness and connectivity of the peer-to-peer edge network. As a result, it significantly improves video delivery efficiency by improving the last-mile delivery issue.
- Video-based NFTs – These NFTs enable users to capture meaningful moments in the metaverse. But more importantly, NFTs can also guarantee the authenticity and ownership of these collectibles.
- Theta EdgeStore – The Theta EdgeStore network aims to be an append-only, content-addressing, decentralized key/value storage network for the permanent web. It also acts as a decentralized content delivery network (dCDN) for any file type.
- ThetaPass NFT virtual ticketing – ThetaPass allows websites, online events, and metaverses to use NFTs-backed virtual tickets that are transferable, tradable, and trustless.
The metaverse wouldn’t be so attractive without an extremely smooth user experience. Theta is ready to empower the metaverse citizens with its 360-degree technology stack to offer a solution to tackle the high concurrency of video streaming and decentralized content storage.
As applications and businesses transition to Web3, they will require customizable, high-performance blockchains to enable new business models and tools for value creation.
Metachain intends to meet the needs of video platforms, ticketing companies, metaverse worlds, and other enterprises as they evolve to decentralized models that put value and data ownership back in the hands of users. By enabling potentially unlimited transactional throughput and subsecond block finalization, Theta will be ready to meet the needs of applications with millions of users and daily transactions.
The real kicker comes from Theta’s approach to an unlimited number of subchains. These provide each platform or Web3 business with a highly customizable sub chain that comes with a public blockchain’s transparency, security, and credibility. Media and entertainment companies can implement their dedicated subchains with all the Web3 tools required for video, computing, and storage via Theta Video API, EdgeStore, and NFT-based DRM.
The vision for MetaChain, beginning in December 2022, is to enable emerging Web3 businesses in media, entertainment, and the metaverse to scale to 10x today’s platforms. While these claims are bold, Theta’s previously mentioned track record in Web3 means investors and speculators are waiting to see if Theta can deliver their ambitious plans on time.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.