Livepeer Protocol Design

Purpose, design, and implementation of the Livepeer Protocol - the on-chain coordination, security and economic layer of the Livepeer ecosystem.

Protocol Purpose

The protocol was designed to create a secure, open marketplace for media and AI compute by leveraging unique cryptoeconomic primitives that align incentives and create the conditions for a robust, performant, and verifiable network.

The Livepeer Protocol secures and governs the Livepeer permissionless, decentralised marketplace for verifiable media and AI compute through a set of smart contracts encoded in Solidity and deployed on the Arbitrum One blockchain (with the token deployed on Ethereum mainnet).

See the Livepeer Whitepaper for a detailed overview of the protocol’s design, mechanisms, and economic principles.

Protocol Design

The Protocol serves several critical functions in the Livepeer ecosystem:

For details on the specific mechanisms and primitives of the protocol, refer to the Protocol Mechanisms page.

Design Decisions

The protocol’s design reflects specific choices and tradeoffs made to achieve its goals of security, openness, and performance:

• Delegated Proof-of-Stake Model: The protocol uses a delegated proof-of-stake model for video transcoding, which allows for scalable participation and economic security via bonding, slashing, and reward mechanisms to ensure honest behaviour.
• Probabilistic Micropayment System: Payments are settled through a probabilistic micropayment system, which enables low-overhead transactions and efficient handling of microtransactions.
• On-Chain Governance: Governance and upgrades to the protocol are performed through on-chain token voting, which allows for open participation of invested parties and composability.
• Deployment on Arbitrum: The decision to deploy on Arbitrum (since the Confluence upgrade) provides scalability and lower transaction costs compared to Ethereum mainnet.

AI and Video Workflows do not follow the same protocol staking design as they have different economic and operational requirements.

Design Implementation

The Livepeer Protocol consists of a set of smart contracts encoded in Solidity and deployed on the Arbitrum One blockchain (with the token deployed on Ethereum mainnet).

There are three categories of contracts in the Livepeer Protocol mapping to the core functions of the protocol:

1. Core Protocol Contracts – staking, payments, round progression, and service discovery
2. Token and Utility Contracts – the LPT token and bridge infrastructure
3. Governance Contracts – on-chain voting, proposal execution, and treasury management

Full contract architecture and implementation details.

Protocol Actors

The Protocol does not perform any of the actual work of transcoding or AI inference - that is the role of the Network. The Protocol governs the rules and incentives that coordinate and secure these Network Actors.

The Livepeer Protocol defines and governs the roles and responsibilities of various participants in the network, including:

• Orchestrators: GPU operators who perform transcoding and AI inference work, and earn rewards and fees for their contributions.
• Delegators: LPT holders who delegate their stake to Orchestrators, sharing in the rewards and helping to secure the network.
• Gateways/Broadcasters: Entities that submit video and AI jobs to the network, paying for the work performed by Orchestrators.