Livepeer Staking Guide

How to Stake LPTs

Please note that this guide is obsolete and was originally created for the first version of Livepeer. Please visit this Livepeer Staking Guide for an updated tutorial.

Welcome to our Livepeer staking guide. In this guide we’re going to show you just how simple it is to stake Livepeer tokens and why it’s important for token holders to do so. This article assumes that you already have Livepeer Tokens (LPT). If that’s not the case, read this short article about the fastest way to buy LPT.

Glossary

Throughout this guide we’re going to be using a handful of terms that are important to know and understand. If you’re already familiar with Livepeer feel free to skip this section. Otherwise, take a moment to read through this list.

Token Holder – Any person or entity holding Livepeer Tokens (LPT).

Delegator – Person who delegates (stakes) LPT in order to receive a reward.

Delegating / Bonding – Staking LPT for a reward.

Unbonding Period – Period of time during which a token holder’s Livepeer Tokens are delegated and cannot be accessed – seven (7) days as of this writing. The unbonding period can be as short as several weeks or as long as several months and is similar in nature to a security deposit.

Delegate / Transcoding Node – Person to whom Livepeer Tokens (LPT) are delegated. For anyone familiar with other DPoS blockchains, the transcoding node plays a similar role to the Baker in the Tezos network or the Block Producer in the EOS network.

Inflation

To understand why delegating on the Livepeer Token network is important, it’s necessary to understand the inflation mechanism. In every round, each of which happens about every 21 hours at the moment, the supply of LPT is increased. That makes LPT an inflationary currency which is typically seen as bad for investors.

However, that inflation only hurts token holders who are not delegating. When a token holder delegates their LPT they receive a percentage of the newly created LPT and are protected against inflation. This was a deliberate design by the creators to encourage delegating.

The Role of the Transcoder

Transcoding nodes are the computers that process video being transmitted around the Livepeer network. For example, a transcoding node could transcode some livestreaming video in Ultra-High-Definition into something lower quality and requiring much less data. This means that users with weaker internet bandwidth and with less powerful devices can still watch live.

How to Delegate Your Livepeer Tokens

1. Get MetaMask – The easiest way to stake your Livepeer Tokens is through the MetaMask wallet. If you don’t have MetaMask yet you can download it for Chrome or Brave here. After you’ve installed it you should send your Livepeer Tokens to the provided Ethereum address.
2. Go to the transcoder database – Click here to see a full list of the available transcoders. At the time of publication there are 30 transcoders (although that number may fluctuate). Only the top 25 transcoders in terms of LPTs staked to them are active. Bonding to an inactive transcoder will not get you any rewards.

   

3. Chose a transcoder – Different transcoders offer different rewards. To make it simple to determine the advantages and disadvantages of each transcoder, we will break down what these terms mean (please note, this guide is designed with simplicity in mind. For a more in depth explanation of these terms please click here).

• Active – A transcoder needs to be active to claim fees and inflationary rewards.
• Reward cut – What percentage of inflationary rewards the transcoder keeps (the token holder receives the full inflationary reward, minus this cut).
• Fee share – Each transcoder charges a certain amount of GWEI to process a video clip. The fee share represents what percentage of that profit delegators will receive.
• Price per segment – How much a transcoder charges to process a video clip (1 ETH is equal to 1 billion GWEI).
• Last reward round – The last reward round that a transcoder has claimed the reward for. Each round is approximately 24 hours.

  

In addition to financial concerns, there is a social aspect. Different transcoders support different projects; e.g. converting political videos or converting educational videos. To find out more information about transcoders you can visit the Livepeer Token forum page.

Finally, it’s important to choose a reliable transcoder that will claim rewards at every round. If you delegate your stake towards a transcoder who fails to claim the rewards in a round, you won’t get any rewards for that round.

4. Bond your LPT – Once you’ve chosen a transcoder and are ready to start delegating, click BOND in the upper left hand corner of the transcoder’s page.

   

After clicking BOND the following window will pop up.

Click Update Your Transfer Allowance. A window will pop up and you can choose how many LPT you would like to be made available for delegating.

Once you’ve entered the amount you can click submit and a MetaMask screen will pop up, asking you to confirm the transaction.

If everything looks correct you can click confirm.

You will now be able to select the number of LPT you want to bond to be delegated to the transcoder node by inputting it in the Amount to Bond section, and then click submit. Confirm the transaction in MetaMask with sufficient gas, and your LPT will now be bonded to this transcoder.

As a final note, while you will accrue rewards automatically, remember to check back regularly to collect the rewards and to make sure that your transcoding node is remaining honest.

Summary

That’s it, you’re now delegating your LTP tokens! That means you’ll be protected against inflation and more importantly, you’ll be helping the Livepeer network to do what it was designed to, offer open access to video and video streaming, regardless of where a viewer lives or how good their internet is.