Theta Fuel

Theta Fuel (TFUEL) is an operational token that runs on-chain processes in the Theta protocol. Users will use TFUEL to pay a relay node to send a video stream or set up and interact with smart contracts.

TFUEL was first given out on March 15, 2018, when the Theta mainnet went live. Users got 5 TFUEL for every Theta Token they owned. After the first 5 billion TFUEL Tokens are given out, the supply will grow at an initial target rate of 5% per year. The new supply rate will be set at the protocol level. Protocol consensus can change it as needed to give platforms on the Theta Network the right amount of new supply they need.

One question is whether each viewer must pay TFUEL to watch video streams on the Theta Network. Technically, that’s true at the protocol level, but SLIVER.tv and its first partners, such as MBN and Samsung VR, use a model where the video platform covers the cost of TFUEL. The TFUEL that users need to pull video streams from relayers on the Theta Network is paid for by the platforms. This makes sense because video platforms have the most to gain from getting more viewers to pull their video stream from the Theta Network through lower content delivery networks (CDNs) costs and more user engagement. The end user never has to go out and buy TFUEL tokens to watch videos on the Theta Network.

The Theta Token (THETA) is the Theta protocol’s governance token. THETA is used to stake as a Validator or Guardian node, which helps make blocks and keeps the Theta Network’s protocol in order. Users will get a share of the new TFUEL if they stake and run a node.

THETA will always be 1 billion, and it will never go up. THETA is an ERC20 token that can be bought and sold on major exchanges. On March 15, 2018, when Mainnet launched, ERC20 THETA was replaced by new THETA tokens on the Theta blockchain at 1 to 1.

There are two key reasons for introducing a second token. First, it separates the utility and purpose of each Token. THETA is used strictly for staking and securing the network. In contrast, TFUEL is used to power microtransactions and operations of the network. Second, two tokens are needed to solve governance issues that arise from using the same Token for staking and operations. Separating the two functions into different tokens greatly decreases the risk of a malicious actor accumulating a significant amount of the staking Token.