Livepeer Wraps Up Merkle Mining, Frees Ethereum Bandwidth
The token distribution approach increased Ethereum gas usage in the past two months, but in most cases, gas fees remained reasonable.
Livepeer, the video transcoding service based on the Ethereum network, has finished the “Merkle mining” process of the LPT digital asset. The token creation and distribution took up bandwidth on the Ethereum network, burning up to 30% of gas.
However, on most occasions, the LPT distribution did not create a gas bidding war, and prices for Ethereum transactions remained reasonable. A gas bidding war happens when users aim to pass their transaction before all others and are ready to pay higher fees.
Livepeer announced the results of its token distribution, which included the requirement for network participants to fuel it by using the Ethereum network:
https://twitter.com/LivepeerOrg/status/1047523767122087936
The Livepeer network uses a model of participation in which a selected group of 15 transcoders can provide video services and receive LPT rewards. In this regard, it has a form of “delegated proof-of-stake,” but the distributed computing has just one specific aim. The network uses inflation to incentivize the usage of tokens, as explained in a blog post:
“Participants who hold LPT tokens passively and do not bond to transcoders are being economically incentivized to do so or incur dilution. Furthermore, from the perspective of dilution, participants who can maximize their liquid LPT holdings may be able to build up stakes in the network comparable to those of early investors, who are vesting and delegating LPT slowly over time.”
LPT is a token to be used within an ecosystem of distributed computing for video transcoding. The asset is still not traded on exchanges, and the tokens will now have to demonstrate their utility within the Livepeer ecosystem.
The episodes of congestion on the Ethereum network cause skepticism of the technology’s abilities to carry distributed apps. For now, most apps do not create an increase in gas prices due to low-grade usage. The exception was a FOMO lottery game, which included the potential for a gas fee bidding war.
https://twitter.com/DecentralizTech/status/1047524270098853891
Additionally, it is extremely difficult for users to sync the entire Ethereum blockchain, which is now larger than one terabyte. At the same time, the Ethereum hashrate is on a downward trend again, heading toward three-month lows. Ethereum mining economics are becoming less appealing, especially as another cut in the block reward may be looming.
ETH market prices remain relatively stagnant at about $224 as selling and shorting pressures subsided. Still, ETH behaves as a utility coin, lacking a bullish case in the past weeks.
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