Key Insights
LPT’s circulating market capitalization saw a significant uptick of 37% quarter-over-quarter (QoQ), climbing from $189 million in Q1 2025 to $260 million in Q2 2025. Demand-side fees experienced a 5% increase QoQ, reaching $115,500, even though there was an 11% decline in total transcoded minutes, which fell to 46 million. This trend indicates a transition towards more valuable, AI-driven workloads. Additionally, fees associated with the AI Subnet rose by 21% QoQ to $63,700, fueled by the public beta of Daydream, usage of ComfyStream, and various developer engagement initiatives like hackathons and funding through the Special Purpose Entity (SPE). The Livepeer Foundation was established as a non-profit entity to facilitate the growth of the decentralized ecosystem and to provide strategic direction for the protocol’s future. Staking participation increased from 48.4% to 50.1% of the circulating token supply, surpassing the target threshold and potentially leading to a reduction in inflation rates in subsequent quarters.
Primer
Creating decentralized video applications akin to Twitch or TikTok necessitates robust infrastructure for both live and on-demand video streaming. Video content needs to be transcoded into formats suitable for a user’s bandwidth and device. While traditional cloud services like AWS, Google, and Microsoft offer video transcoding solutions, these can be prohibitively expensive. Livepeer (LPT) presents an open, permissionless network that facilitates a decentralized marketplace for video infrastructure, accommodating both live and on-demand streaming capabilities. Its compute marketplace allows participants to contribute GPU resources for a range of workloads, including video transcoding and AI-enhanced video processing. Given the higher computational demands of AI-driven video models compared to text and image generation, Livepeer offers a scalable and cost-effective alternative for video-related computational tasks, aiming to reduce transcoding expenses for users by up to tenfold.
Within Livepeer’s decentralized transcoding network, there are three primary participants: Node operators, termed “Orchestrators,” manage the routing of transcoding jobs, with their workload capacity being proportional to the number of Livepeer tokens (LPT) they stake. These operators earn ETH fees and newly minted LPT as rewards. Service nodes, known as “Transcoders,” supply computational resources for Orchestrators and handle video transcoding, receiving ETH fees in exchange. Typically, Orchestrators and Transcoders operate on the same machines. Delegators stake LPT with effective node operators to bolster the security of the Livepeer network, earning rewards from both ETH fees and LPT allocations.
Livepeer has also ventured beyond video transcoding by launching Livepeer AI, a dedicated network for AI inference tasks that supports AI-generated video capabilities, including text-to-image, image-to-image, and image-to-video processing. These offerings cater to various applications within entertainment, social media, and gaming sectors. Currently in beta, Livepeer AI is anticipated to broaden its support for additional models and accommodate a wider array of AI workloads in the future.
Key Metrics
Livepeer’s demand is driven by applications and developers seeking video transcoding, live-streaming, and video generation functionalities. This includes decentralized social media applications, Web3-native platforms, and conventional Web2 services that require scalable video infrastructure. While platforms like TikTok, Twitch, Spotify, and SoundCloud depend on centralized infrastructures for streaming, comparable applications in the Web3 environment, such as decentralized video platforms and token-incentivized music streaming apps, can leverage Livepeer’s decentralized video streaming and transcoding capabilities.
Network
The usage of Livepeer’s network can be assessed by estimating the number of transcoded video minutes. In Q2 2025, this measure declined by 11% QoQ, dropping from 52 million in Q1 to 46 million. This decrease is likely attributed to a shift from traditional long-form video transcoding toward real-time AI workloads like Daydream and ComfyStream, which prioritize low-latency inference and prompt-based rendering over continuous video processing. Although these AI workloads demand more computational resources, they result in a lower overall number of minutes processed. As Livepeer continues its foray into AI-native workloads, conventional metrics such as transcoded minutes may no longer effectively represent total computational demand.
Fees from Transcoding
Services utilizing the Livepeer network incur demand-side fees in ETH for video transcoding and AI processing tasks. Node operators, or Orchestrators, receive these fees for executing video jobs and share a portion with their delegators based on their fee distribution model. The likelihood of obtaining transcoding tasks is influenced by the weight of their stake; Orchestrators with larger stakes are favored for more work, leading to increased earnings from transcoding fees. This framework incentivizes participation from both node operators and delegators, thereby enhancing network security.
Despite an 11% drop in usage (from 52 million to 46 million minutes), Livepeer’s demand-side fees from transcoding rose by 5% QoQ, increasing from $110,000 in Q1 2025 to $115,500 in Q2 2025. The rise in fees, which are paid in ETH, was primarily fueled by an approximate 36% increase in ETH’s value over the quarter. Furthermore, the disparity between usage and revenue reflects a transition towards higher-value workloads, such as real-time AI video remixing and prompt-based effects, which command higher fees per computation unit. Thus, even with a reduction in total minutes processed, overall fee generation experienced growth.
Fees from Livepeer AI
In Q2 2025, Livepeer continued to expand its role beyond video transcoding with ongoing developments in Livepeer AI, which was introduced in Q3 2024 to facilitate decentralized AI-powered video generation. This included the enhancement of Cascade, a real-time AI video processing pipeline launched in late 2024. Cascade facilitates applications such as automated video agents, live analytics, and interactive overlays by managing GPU resources for continuous media workflows. These advancements position Livepeer as a decentralized media compute provider, broadening its infrastructure to accommodate emerging AI-driven video applications.
During Q2 2025, a total of 20,351 winning tickets were processed, representing a 17% increase from 17,434 in Q1, while the average fee per ticket remained relatively steady, increasing slightly from $3.02 to $3.13. Notably, AI workloads constituted over 55% of the total protocol fee revenue in Q2, up from 48% in Q1, indicating a persistent shift in network usage towards compute-heavy, short-form video tasks. This rising demand coincided with the public beta launch of Daydream on May 12, which introduced real-time prompt-based video effects and avatar transformations, as well as the hackathon “Live Video AI Meets Fashion,” co-hosted with ChatandBuild from May 27 to June 10. These initiatives stimulated developer engagement with Livepeer’s GPU-supported infrastructure and ComfyUI workflows, resulting in heightened adoption of AI-centric media applications. As orchestrators integrated into the AI Subnet and creators utilized new tools, the protocol experienced steady growth in AI-related computational activity through the end of June.
Staking Rewards
The Livepeer network allocates staking rewards in LPT to both node operators and delegators. To deliver video services, node operators must stake LPT, with their stake weight determined by their own tokens and those delegated to them. In Q2 2025, total staking rewards fell by 26% QoQ, decreasing from approximately $19 million in Q1 to $14 million. This marked the second consecutive quarter of decline in USD-denominated rewards. Unlike in Q1, where the decrease was attributed to a drop in LPT’s value, the reduction in Q2 occurred despite a 29% recovery in LPT’s price, which rose from $4.81 to $6.19. This suggests a slowdown in token emissions or a decrease in the inflationary reward pool, even as market conditions improved.
Key protocol metrics highlight this trend. Annualized daily inflation rose slightly from 25% to 27%, continuing a four-quarter upward trajectory, while real yield (in USD) declined from 41% to 36%. The increase in inflation and token price was not enough to offset the decline in total rewards, indicating intensified competition for a relatively fixed emission pool. This situation underscores the structural dynamics within Livepeer’s staking economy; as staking participation increases and inflation stabilizes near its upper limit, yields per staker may remain under pressure unless protocol revenue sees a significant boost or inflation adjusts further.
Staking Participation
The Livepeer Token (LPT) functions under a Stake-for-Access (SFA) model, requiring node operators to stake LPT to engage in network activities. For the past seven quarters, staking participation, which reflects the percentage of circulating LPT supply that is staked, has remained below the 50% target level. Furthermore, the number of delegators has declined, falling from 3,332 in Q2 2024 to 2,845 in Q2 2025, indicating a reduction in active participants securing the network.
In Q2 2025, staking participation increased from 48.4% to 50.1%, marking the first time since the Streamflow upgrade that the network surpassed the 50% target threshold. This change indicates renewed engagement from validators and delegators, likely influenced by the protocol’s dynamic inflation model, which raises issuance when staking drops below 50% and tapers when it exceeds this threshold. Because staking was below 50% for most of the quarter, the protocol’s inflation rate gradually increased throughout Q2.
Livepeer’s daily inflation rate rose from 0.0593% in Q1 to 0.0643% in Q2, corresponding to an annualized inflation rate of 25% to 27%. This trend continued the upward trajectory in issuance, reinforcing incentives for broader network participation. However, as staking surpassed the 50% threshold near the end of Q2, the inflation rate may see a decline in Q3 if high participation levels are maintained. Real yield in USD terms also decreased from 41% to 36%, indicating that increases in inflation and token price were insufficient to balance the diminishing reward pool.
These dynamics reflect structural tensions within Livepeer’s staking economy. Although inflation serves to motivate participation, a disconnect between staking rewards and actual network usage persists. Previous analyses have indicated that the top five Orchestrators by stake captured 40–50% of total staking rewards but only approximately 20% of transcoding fees, highlighting the inefficiency of aligning stake weight with true workload execution. Additionally, the 11% decrease in overall network usage during the quarter further constrained fee-based revenue, intensifying pressure on inflation-driven incentives. Without substantial increases in protocol usage or alterations to the reward distribution model, yields per staker are likely to remain suppressed, even as staking participation continues to rise.
Market Capitalization
LPT’s circulating market capitalization rose by 37% QoQ, increasing from $189 million in Q1 2025 to $260 million in Q2 2025. This growth can be primarily attributed to a 29% rise in token price, with LPT moving from $4.81 to $6.19 during the quarter.
Qualitative Analysis
Launch of Livepeer Foundation: The Livepeer Foundation (LF) was officially launched in Q2 2025 as a neutral, non-profit organization aimed at coordinating the next phase of growth and decentralization within the Livepeer ecosystem. This foundation acts as a lightweight, purpose-driven entity focused on long-term strategy, core network development, and participant onboarding. Its mission is to guide the protocol’s evolution into a robust, secure, and accountable infrastructure network while promoting a diverse ecosystem of applications, gateway operators, and developers. Early initiatives from the Foundation include publishing a synthesis of current ecosystem priorities along with a long-term project roadmap and a public strategy hub to guide contributors and communicate the network’s trajectory.
Advisory Boards and Community Survey: In response to feedback from community surveys, the Livepeer Foundation established four advisory boards in late June: Growth, Governance, Markets, and Network. Composed of contributors from Livepeer Inc., the Foundation, and various stakeholders, these boards were formed to influence protocol priorities and long-term direction. Each board concluded an initial strategic guidance phase in Q2 and provided preliminary recommendations to shape future roadmap development.
ComfyStream Integration: Following its initial integration in Q1, ComfyStream became a fundamental component of Livepeer’s AI video infrastructure in Q2 2025. Built upon ComfyUI, ComfyStream facilitates real-time video transformations through modular workflows and low-latency inference. It was further advanced in Q2 through its usage in the Daydream product, enabling live, prompt-based video effects. Additionally, ComfyStream served as the technical backbone for the AI Video SPE Stage 4, which secured funding to scale real-time AI pipelines and facilitate Bring Your Own Container (BYOC) deployment. By supporting complex tasks like avatar rendering and generative overlays, ComfyStream has established itself as a cornerstone of Livepeer’s transition to AI-driven video infrastructure controlled by developers.
ChatandBuild Integration: After their initial collaboration in March 2025, Livepeer and ChatandBuild co-hosted a no-code hackathon titled “Live Video AI Meets Fashion” on May 27, 2025. This event showcased their partnership by inviting participants to create real-time livestream applications using Livepeer’s GPU-based infrastructure and ComfyUI pipelines. Focus areas included AI-generated overlays, interactive tools for creators, and Web3-native streaming interfaces, emphasizing accessibility through prompt-driven designs and no-code workflows. Prizes, such as a $300 gift card from Vestiaire Collective, incentivized hands-on experimentation with real-time AI video tools.
Retake.tv Launch: On June 28, 2025, Retake.tv, a livestreaming platform based on Livepeer’s infrastructure, launched publicly as a testbed for creator monetization. This platform introduces features like multi-token tipping, token-gated livestreams with trade-based rewards, and the ability to launch new tokens during broadcasts. Retake.tv exemplifies an innovative monetization model aligned with the decentralized media concept, reflecting Livepeer’s increasing adoption in creator-focused streaming applications.
UFO Integrations: In Q2 2025, Livepeer enhanced its partnership with UFO Club as the platform advanced its on-chain radio initiative. Utilizing Livepeer’s video infrastructure, UFO Club expanded its decentralized broadcasting abilities and introduced new incentive programs for creators.
Product and Infrastructure Updates
Daydream’s Beta Expansion: Following its initial launch on February 28, 2025, Daydream evolved in Q2 into a more robust and interactive tool for real-time video manipulation. Originally designed as a creator-centric application for applying visual effects using natural language prompts, Daydream aims to broaden access to Livepeer’s AI infrastructure without necessitating technical expertise. It allows streamers and creators to generate dynamic overlays, stylized visuals, and avatar transformations from webcam inputs with minimal latency.
On May 12, 2025, Daydream entered its public beta phase, which was built on top of ComfyStream and powered by Livepeer’s GPU subnet. The platform supported prompt-driven remixing workflows, generative video overlays, and avatar embodiment. Updates in Q2 introduced features like trending prompt discovery, access to previously generated clips, and a continuous live DJ stream that fostered real-time audience engagement. The Daydream team also utilized the product as a testing ground for AI-native user experience design, employing tools like ChatGPT’s Data Analyst to analyze prompt composition and user behavior, which will inform future interface improvements.
Advanced Sidestream Proposal: A technical proposal titled “Advanced Sidestream” was presented by the protocol team to enhance throughput and data resiliency across the network. This proposal outlines architectural improvements aimed at optimizing the delivery of AI-powered video streams, reflecting the increasing technical demands of real-time video workloads.
Infrastructure Upgrades by Orchestrators: Several orchestrators enhanced their hardware capabilities to accommodate GPU-intensive tasks. Notably, lpt-gzp-node.eth joined the Daydream subnet after upgrading to an RTX 4090, while Stronk Orchestrator surpassed 800k LPT in delegated stake and reduced its reward cut to 11%, indicating growing alignment and competitiveness within the network.
Community Engagement and Events
“Beyond The Stream” Event Series: On June 26, 2025, Livepeer initiated “Beyond The Stream,” a biweekly discussion series featuring contributors from Streamplace, Livepeer Inc., and the AI SPE team. The series covered topics such as infrastructure scaling, AI SPE adoption, and decentralized video strategies.
EthCC 2025 and AIAgentsSummit Demos: On July 1, Livepeer showcased real-time AI video workflows at EthCC 2025 and demonstrated Daydream and ComfyUI integrations. Earlier, on June 19 at the AI Agents Summit, Titan Node presented a live VTuber agent powered by real-time AI video inference.
Fireside Broadcasts and Creator Sessions: Throughout Q2, Livepeer conducted several Fireside sessions addressing topics including gateway infrastructure (GWID), monetization strategies for AI streaming, and VTuber tools. Open Ecosystem Call and Treasury Talk: On May 6 and June 6, Livepeer held treasury and ecosystem calls to inform contributors about governance activities, roadmap planning, and treasury policies. The Treasury Talk confirmed the treasury’s attainment of its 750,000 LPT cap, halting any further inflationary distributions.
Capitol Hill Advocacy and Sector Recognition: In May, Livepeer co-founder Doug Petkanics participated in discussions on Capitol Hill alongside Akash, Bittensor, and DCG to advocate for decentralized AI infrastructure. That same month, Livepeer was included in Grayscale’s AI Crypto Index, highlighting increasing industry acknowledgment of its importance in real-time, open-source AI networks.
Governance
AI Video SPE Stage 4 and the Launch of BYOC: On June 20, 2025, the Livepeer community approved a governance proposal allocating 56,560 LPT to fund the fourth phase of the AI Video Special Purpose Entity (SPE). Building on three previously funded stages, Stage 4 focuses on expanding Livepeer’s infrastructure for real-time AI media processing through two major initiatives: ongoing development of ComfyStream and launching the Bring Your Own Container (BYOC) deployment model.
The BYOC framework, officially launched on June 30, 2025, allows external developers to deploy custom AI containers within Livepeer’s computing environment. Key deliverables for Q2 included onboarding orchestrators to the GPU AI stack, publishing a BYOC Request for Comments (RFC) and development roadmap, and releasing new data-channel models for tasks such as transcription and video intelligence. These advancements bolster Livepeer’s strategic initiative to serve as a foundational infrastructure layer for decentralized, AI-native video applications while expanding monetization opportunities for node operators.
Gateway Wizard SPE Governance Proposal: On May 25, 2025, the Livepeer community approved a 6,600 LPT grant to initiate the Gateway Wizard (GWID) SPE, a managed DevOps platform that simplifies gateway deployment and monetization for
