What is Theta Fuel?

Theta Fuel (TFUEL) is the utility token of the Theta Network, a blockchain protocol designed to improve the process of developing, broadcasting, and consuming online video content. The Theta ecosystem has two tokens: one utility token (TFUEL) and one governance token, called Theta Token (THETA).

TFUEL tokens are used to motivate users to behave as peers by sharing redundant or extra compute and bandwidth resources with other peers within the Theta Network. TFUEL can also expand in utility depending on the new additions and improvements being made to the platform. For instance, in June 2021, the Theta Network expanded its product offering with non-fungible tokens (NFTs), such as trading cards of media superstars. The prices of the NFTs being offered on the platform are shown in US$ and TFUEL.

A brief history of Theta Fuel

In November 2017, Theta Network introduced its blockchain solution through a blog on Medium. The project promotes itself as an edge network maintained by thousands of community members, with no central servers or services.

Theta Network’s founding members included Mitch Liu, who currently serves as CEO, and Jieyi Long, the project’s Chief Technology Officer. A few months later, in January 2018, the project started distributing its ERC-20 token called Theta Token (THETA) on Ethereum to participants of its token sale.

In June 2018, the Theta Network introduced a second token to solve governance issues that arose from using the same token for staking and operations. As a result, THETA became the staking token of the network, while the new token, called Theta Fuel (or TFUEL), was introduced as the operational token.

On 15 March 2019, Theta Network released its mainnet 1.0. During this launch, THETA holders received 5 TFUEL for each THETA token they owned. After the initial distribution of 5 billion TFUEL, the network set a supply increase target of 5% per year, subject to adjustment by protocol consensus.

Theta Network’s mainnet 2.0, hosted by partners like Google, Samsung, Binance, Blockchain.com, and Gumi Cryptos, was released in May 2020 with added Guardian nodes, which is a two-layer consensus method, to supplement its enterprise validators. This network also included the Theta ‘Edge Node’ network, which uses peer-to-peer ‘EdgeCast’ technology. This decentralised technological stack provides the capacity to record live video, convert it in real time, cache, and broadcast live-stream video data to users all over the world.

In July 2021, Theta Network launched its mainnet 3.0, which included smart contract support. The project aims to boost platform user engagement and retention. For example, smart contracts on the Theta Network allow for entirely digital object ownership, novel payment-consumption patterns, transparent royalty distributions, trustless crowdfunding systems, and so on. These new functions add a layer of social and economic engagement to the primary functioning of video and data distribution.

In April 2022, Theta Network published a white paper outlining the future launch of its mainnet 4.0, which aims to support Web3 businesses and is scheduled to launch on 1 December 2022. This recent white paper introduced the Theta Metachain, a network of interconnected subchains that the project refers to as a ‘chain of chains’.

How Theta Fuel works

The Theta Network is a decentralised video distribution network with an ERC-20-compatible token. Because of this classification, Theta users may leverage the Ethereum ecosystem to streamline their crypto experience. Ethereum is the world’s biggest dapps ecosystem, and ERC-20 tokens are supported by a wide range of wallets, decentralised exchanges (DEXs), and games. Theta Network makes use of Ethereum's security and efficiency, combining it with a variety of patented technologies to increase the quality of stream transmission.

Users of the Theta Network have access to a worldwide infrastructure for video content and data transmission. This open-source project offers esports, music, television/movies, education, enterprise conferencing, peer-to-peer streaming, and other services. Furthermore, the platform's decentralised architecture guarantees that Theta Network is fueled by users, specifically through THETA on the governance level and TFUEL on the utility level.

Theta Network’s blockchain network uses the multi-level Byzantine Fault Tolerance (multi-level BFT) consensus mechanism, a novel proof of stake (PoS) consensus technique that is substantially quicker than typical proof of work (PoW) systems. The multi-level BFT method employs a minimal number of nodes, which serve as a ‘Validator committee’, to expedite approvals.

Once these nodes have given their initial permission, a much larger group with thousands of nodes, known as the ‘Guardian Pool’, completely verifies the transactions and adds them to the blockchain. This method, in particular, offers Theta Network tremendous transaction throughput. Theta Network also includes a resource-oriented micropayments pool, which establishes off-chain micropayments from which any other user may withdraw funds via off-chain transactions.

What is Theta Fuel used for?

As the operational token of the Theta Network, TFUEL is spent to complete transactions, like paying a relay node to provide a video stream, or for deploying and interacting with smart contracts. Relay nodes earn TFUEL for every video stream they relay to other users on the network. In effect, TFUEL is used as the ‘gas’ of the protocol, in reference to the use of ETH as ‘gas’ for network payments on the Ethereum platform.