Research Summary
The report discusses the Q3 2023 performance of Livepeer, a decentralized video transcoding network. It highlights the network’s increased usage, revenue growth, and the introduction of the Livepeer Innovators DAO. The report also provides an overview of Livepeer’s services, key metrics, and future prospects.
Key Takeaways
Network Usage and Revenue Growth
- Increased Network Usage: The usage of the Livepeer transcoding network increased by 13% QoQ in Q3 2023, in line with the overall increased demand for decentralized compute. This growth follows two consecutive quarters of declines.
- Demand-Side Revenue Growth: Livepeer’s demand-side revenue, which comprises ETH fees accrued from transcoding services, increased by 34% QoQ in USD terms (up 43% in ETH terms). This growth is attributed to the increased network usage.
- Staking Reward Revenue Growth: Revenue from staking rewards, which are distributed in LPT to node operators and delegators, increased by 33% QoQ in USD terms (up 25% in LPT terms). This growth corresponds with a steady increase in the issuance of LPT rewards.
Staking Participation and LPT Issuance
- Staking Participation Rate: The Livepeer staking participation rate, which is the percentage of the circulating LPT supply that is staked, has stayed below the 50% equilibrium threshold in 2023. This drop in staking participation led to a gradual increase in daily LPT issuance.
- Dynamic LPT Issuance: Livepeer ensures that participation stays balanced around the predetermined target rate of 50% by dynamically issuing LPT staking rewards. When the participation rate falls below 50% in a given round, LPT issuance increases by 0.00005%. Conversely, when the participation rate passes 50%, inflationary issuance decreases by 0.00005%.
Livepeer Innovators DAO
- Introduction of Livepeer Innovators DAO: The Livepeer Innovators DAO aims to retroactively provide grants to builders on the Livepeer network as well as to support ongoing development efforts. This initiative is made possible by the Livepeer Delta proposal, which will introduce a protocol treasury if passed by community vote.
Future Prospects
- Web2 and Web3 Adoption: While Livepeer has been focused on building and scaling video infrastructure, the technology is ready for the Web2 video broadcasting industry to adopt Livepeer. Simultaneously, by embedding with and supporting the Web3 community, Livepeer is focused on developing the tooling and apps to ultimately drive Web3 demand to the network.
Actionable Insights
- Investigate the Potential of Livepeer: Given the increased usage and revenue growth of Livepeer, it may be worthwhile to explore the potential of this decentralized video transcoding network. Its services could be beneficial for apps and developers in need of video transcoding and live streaming.
- Consider the Impact of Staking Participation: The staking participation rate and dynamic LPT issuance could have significant implications for the Livepeer network. Understanding these dynamics could provide insights into the network’s performance and future prospects.
- Monitor the Development of Livepeer Innovators DAO: The introduction of the Livepeer Innovators DAO could have a significant impact on the Livepeer network. Keeping an eye on the development of this initiative could provide valuable insights into the network’s future direction.
- Assess the Potential for Web2 and Web3 Adoption: The potential for Web2 and Web3 adoption of Livepeer’s technology could present significant opportunities. Assessing this potential could provide a better understanding of Livepeer’s future prospects.
