Theta Fuel (TFUEL) is a utility token native to the Theta Network, utilized to facilitate operations within the network. It serves as the primary medium for transactions, smart contract interactions, and covering operational costs on the Theta Network, including payments to relayers for sharing video streams and transaction fees. ^[1][2]

Overview

Theta Fuel (TFUEL) is the utility token within the Theta Network, performing several essential functions that facilitate the network's operations. As a transaction medium, $TFUEL is used for executing transactions on the Theta blockchain, enabling the exchange of value within the ecosystem. It is also used for covering gas fees for deploying and interacting with smart contracts on the Theta platform.

TFUEL covers various operational expenses on the network, including payments to relayers for sharing video streams and other transaction fees. By incentivizing participation in the Theta Network, TFUEL provides rewards for activities such as running Edge Nodes or Guardian Nodes, which are crucial for maintaining the network's decentralized infrastructure.

In addition, $TFUEL supports decentralized content delivery by leveraging users' excess bandwidth to enhance the quality and efficiency of video streaming on the Theta Network. It contributes to network security by imposing transaction fees, which help prevent spam. Furthermore, $TFUEL holders can participate in governance processes, voting on key network decisions and proposals, thus playing a role in the network's development and management. ^[1][2][3][4]

Tokenomics

Theta Fuel (TFUEL) has a distinctive tokenomics structure designed to sustain and incentivize the Theta Network:

1. Supply and Inflation:

   • Annual Inflation: The token has an annual inflation rate, generating new TFUEL to reward network participants and encourage resource sharing.

   • Burn Mechanism: Some TFUEL is periodically burned to manage supply and support value appreciation.

2. Earning Mechanisms:

   • Staking Rewards: Users earn $TFUEL by staking $THETA tokens and running Guardian Nodes, which secure the network and validate transactions.

   • Edge Node Rewards: Participants can also earn $TFUEL by running Edge Nodes, which contribute bandwidth and computing power for video relaying and caching.

3. Usage:

   • Transaction Fees: TFUEL is used to pay for transaction fees within the Theta Network.

   • Smart Contracts: It serves as the gas fee for deploying and executing smart contracts on the Theta blockchain.

   • Incentives: TFUEL incentivizes network participants to share resources and support the decentralized infrastructure.

4. Circulation:

   • Distribution: TFUEL is distributed to users as a reward for their contributions to the network.

   • Market Trading: TFUEL can be traded on various cryptocurrency exchanges, providing liquidity and enabling broader use within and outside the Theta Network. ^[2][4]

Consensus Mechanism

Theta Network relies on a multi-level Byzantine Fault Tolerant (BFT) consensus mechanism to ensure the network's security and reliability. Within this consensus model, TFUEL is involved in transaction validation and security measures.

Additionally, TFUEL serves as an incentive for network participants to actively contribute to the consensus process by staking $TFUEL and engaging in activities such as relaying video streams and running nodes. These actions collectively safeguard the network against potential threats and malicious activities. ^[2][4]