Theta Mainnet 3.0 Will Make TFUEL Deflationary
Discover more from Cryptowriter
Theta Mainnet 3.0 Will Make TFUEL Deflationary
Theta Network is a next-generation video delivery network. The blockchain of Theta is the only available end-to-end infrastructure for decentralized video streaming and delivery. Theta was purpose-built for video and data relaying and the mainnet was launched in 2019. It comes with the novel concept of providing a decentralized network where the users share bandwidth and computing resources on a P2P basis. Theta is an open-source protocol and enterprises like Google, Blockchain Ventures, Samsung, Sony Europe, Binance etc. are running enterprise validator nodes of Theta. The mainnet 3.0 of Theta is scheduled to be released on June 30 and it’ll come with key protocol changes.
Understanding the dual token design
THETA is the governance token of the Theta blockchain. The validators need to stake THETA for contributing to block production and the protocol governance of the Theta Network. THETA has a fixed supply of 1 billion. The validators earn Theta Fuel (TFUEL), the second token of the blockchain, for running nodes and staking THETA. TFUEL gets generated in proportion to the staked THETA. TFUEL is the utility token of the blockchain and it also acts as the gas token. It empowers all transactions like payments, deploying smart contracts and interaction with smart contracts. Presently, the ‘Relayers’ earn TFUEL for the video streams relayed to other users on the blockchain. There were 5 billion TFUEL during the genesis moment of the blockchain and the supply increased annually at a fixed rate.
TFUEL is going to be deflationary
Theta Labs announced Theta mainnet 3.0 in December 2020 and introduced a new crypto-economics design for TFUEL. Finally, it’s going to be implemented. The transaction volume on the Theta blockchain is growing exponentially but the token value isn’t aligned with that. The team is going to increase the gas fee moderately. In a recent blog post, they said: “Currently, the fees on Theta network are near zero, and after the proposed increase would still be sufficiently low and cost-effective for smart contracts and Dapps with transaction fees of 0.3 TFUEL for send transactions, 20 TFUEL to deploy a smart contract, and 1 TFUEL to interact with a smart contract.” The transaction fee increase won’t drive the users away as Theta transaction cost will remain 90-95% cheaper than Ethereum. Theta Network processes approximately 100,000 transactions per day now and only 4% of that are resulting from NFT minting and buy-sell transfer interactions via smart contracts. Theta has an ambitious plan with ThetaDrop, a NFT marketplace. Due to the lost cost of transactions and high TPS (approximate 1000 TPS), Theta seems to be prepared to capture the demand of the NFTs. The team forecasts that: “NFT interactions with Theta smart contracts alone will reach 600,000 transactions per day, at which point nearly 250M TFUEL will be burned per year, cancelling out the majority of annual TFUEL inflation.” The Elite Edge Nodes are going to burn at least 25% of each TFUEL payment to the network post mainnet 3.0. The network transaction fees and smart contract fees will be burned too and thus TFUEL will be taken out of circulation perpetually.
Image Source - Network fee burn will make TFUEL deflationary
TFUEL staking to be launched
TFUEL staking will be launched in mainnet 3.0 and it’ll act as a permanent sink of TFUEL. Presently, there is no incentive for holding TFUEL and it creates selling pressure on it. The staking mechanism will provide price stability to TFUEL. The staking APY of TFUEL isn’t disclosed yet.
Theta is embracing decentralization slowly. When the mainnet was launched, Theta Labs was running the majority of validator nodes but now they’re running less than half of the validator nodes and contributing the only 1/3rd of the staked THETA amount. The path to achieve decentralization isn’t easy as decentralization of the network exposes it to various vulnerabilities. Very interestingly, the Theta team has explained that one of the reasons to increase the transaction fee is to prevent spamming of the network. Theta really has solid backers in the industry. Steve Chen, co-founder of YouTube and Justin Kan, co-founder of Twitch, are the project's advisors. The blockchain has really established some dominant use cases and the upcoming major protocol update can draw a new set of investors. The ecosystem of Theta is already showing momentum in a not-so-favourable market condition. THETA has rallied 18% and TFUEL has gained 106% in the last 30 days.
Follow Paragism
Learn how to earn…
Become part of our community.
· Telegram - Facebook Group - Discord
Follow our socials.
Subscribe to our podcast.
· YouTube - iTunes / Apple - Spotify
Subscribe to this publication.
· It’s free (for now)
Theta Mainnet 3.0 Will Make TFUEL Deflationary
YouTube and Twitch, that's some heavy name dropping. Add NFTs to the mix and you've got a winning formula there.
Lots of potential with THETA.
This open-source project provides esports, music, TV/movies, education, enterprise conferencing, peer-to-peer streaming, and more. Additionally, the decentralized nature of the platform ensures that Theta is powered by users. The transaction fee increase won’t drive the users away as Theta transaction cost will remain 90-95% cheaper than Ethereum hopefully even Theta reaches the peak of Ethereum they will stay make the price cheaper but looks like I'm ahead on thinking this way. Let see how will be the outcome on June 30 when they launch mainnet 3.0. Hoping for a positive outlook