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Theta was co-founded by Mitch Liu and Jieyi Long in 2018. Liu has a long history in the gaming and video industries, co-founding video advertising firm Tapjoy, mobile social gaming startup Gameview Studios, and THETA.tv, the live streaming platform whose DApp was the first to be built on the Theta protocol.

Long is Theta’s second co-founder and CTO, following similar multi-year experience in design automation, gaming, virtual reality, and large scale distributed systems. He authored multiple peer-reviewed academic papers and holds various patents in video streaming, blockchain and virtual reality.

Theta now has a modest team, and its official website lists strategic corporate investors as Samsung NEXT, Sony Innovation Fund, media investors BDMI Bertelsmann Digital Media Investments, CAA Creative Artists Agency, and traditional Silicon Valley VCs including DCM, Sierra Ventures and the VR Fund.

Theta’s main business concept is to decentralize video streaming, data delivery and edge computing, making it more efficient, cost-effective and fair for industry participants.

The network runs on a native blockchain, with two native tokens, known as Theta (THETA), Theta Fuel (TFUEL), powering the internal economy.

Theta’s appeal is threefold: viewers get rewarded with better quality streaming service, content creators improve their earnings and middlemen — video platforms — save money on building infrastructure and increase advertising and subscription revenues.

Users have an incentive to both watch network content and share network resources, as rewards come in the form of TFUEL tokens.

The platform is open source, and token holders receive governance powers as with many proof-of-stake (PoS)-based blockchain ecosystems.

In addition to video, data and computing, Theta caters to developers looking to launch decentralized applications (DApps) on its fully featured EVM-compatible Smart contract platform.

The Theta ecosystem includes the following types of participants: Influencers (content creators), Viewers (end-users who consume video content), Advertisers (sponsor influencers and place ads on the platform), Caching Nodes (computers/servers that help improve content quality and delivery speed), Ingest Nodes (assists Caching Nodes and also provides bitrates/stream resolution).

Since the protocol is open-source, any provider can use the Theta blockchain and create decentralized applications (dApps) on the platform. Users are rewarded in THETA tokens for sharing videos through the decentralized video streaming dApp for transcription and distribution of content called EdgeCast.

Theta aims to reduce the operating costs of streaming video services. The load on a content delivery network (CDN) can be reduced by moving some content to the peer-to-peer network. The platform operates on thousands of nodes, which makes the network resilient to content delivery failures and solves the problem of digital last-mile delivery.

At the heart of Theta is a peer-to-peer (P2P) protocol that is responsible for content distribution and transaction processing. The Theta blockchain uses a modified Proof-of-Stake (PoS) consensus mechanism like the staking-based Tendermint system.

Theta Network is based on a dual token system, where THETA is the protocol’s governance token. With THETA, the community determines the direction of development. Meanwhile, TFUEL is a micropayment currency. It’s used to perform all operations on the network. Whenever users share content, Theta encourages it and gives them an opportunity to earn rewards in TFUEL. To earn TFUEL, THETA holders must join either Guardian Nodes or Validator Nodes, which will allow them to participate in transaction validation and block creation.

THETA exists only for governance purposes, with 5 TFUEL tokens issued per 1 THETA held at the time of the mainnet launch in 2019.

THETA itself launched in 2018, at which time it was distributed to buyers as an ERC-20 token on Ethereum. Afterwards, all ERC-20 THETA were converted to native THETA on the mainnet.

The total supply of THETA is capped at 1 billion (1,000,000,000) tokens. It is distributed in various proportions among all network participants, as well as the Theta team itself and a reserve pool.

TFUEL is used to power transactions in a similar way to gas on Ethereum (ETH). Its total supply is 5 billion (5,000,000,000) tokens.

Theta uses a financial incentive scheme to ensure user participation in governance activities, and hence its network is secured by its own users.

The network relies on proof-of-stake (PoS), and employs a multi-level Byzantine Fault Tolerance (BFT) consensus mechanism to balance security with high transaction throughput.

With the launch of Guardian nodes in June 2019, Theta ensured that no single entity controls the majority of THETA tokens being staked at any one time.

THETA, as the main token for the Theta platform, is freely tradable on major exchanges. Pairs include cryptocurrencies, fiat currencies and stablecoins.

As of October 2020, the highest volume pairs come from Binance, with the most popular trading currency being stablecoin Tether (USDT).

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The most important component of the platform is a mesh network. It consists of a set of nodes that connects the network into an integral ecosystem, ensuring the function to share bandwidth. Theta Network nodes are users who provide various equipment/resources and are rewarded for sharing bandwidth and attracting new participants to the platform. Nodes cache and relay video data.

Theta Network is powered by three types of nodes: Edge Nodes, Enterprise Validator Nodes, and Guardian Nodes.

Edge Nodes are hosted by members of the community. They are the most numerous. This type of participant shares their bandwidth or relays video streams over the network in exchange for TFUEL tokens. TFUEL is the of two native tokens on the Theta blockchain, a utility token designed to support operations.

Enterprise Validator Nodes are one of Theta's security layers, companies that stake THETA tokens and get the right to process transactions. This group is also responsible for producing new blocks on the chain. Currently, Validator Nodes include Google, Samsung, Creative Artists Agency, and Sony.

Guardian Nodes allow accurate block operation and maintain consensus by adding the second layer of security, right after Enterprise Validator Nodes.

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