Theta (THETA) is the native token of the Theta Network, a blockchain project underpinning a number of streaming and live streaming applications.

As of May 2022, THETA’s all-time highest price was $15.72, recorded in April 2021. To reach that level, the price multiplied by five in just around a month, but then steadily gave up all those gains over the following year.

The spike may have been caused by inaccurate reports that digital asset manager Grayscale Investments had registered a trust designated for investment in THETA. A trust was indeed registered in Delaware, with the name Grayscale and referring to THETA, but Grayscale’s chief executive quickly pointed out that the trust had no connection with his company. (Grayscale is a subsidiary of CoinDesk’s parent firm Digital Currency Group.)

The supply of THETA is fixed at 1 billion. Users stake THETA to validate transactions on the Theta Network and are rewarded with new theta fuel tokens (TFUEL).

Meanwhile, TFUEL is itself staked on the Theta Edge Network: the decentralized data storage and sharing blockchain network that provides the core value proposition of the whole project. The network allows users to upload and share video and livestream content without the involvement of any centralized server. The reward for this staking is also denominated in TFUEL.

The Edge network supports several entertainment applications, such as THETA.tv, which is available through the Samsung Daily application on Samsung mobile devices. Users are rewarded with TFUEL for sharing their excess bandwidth, which allows content to be shared at lower cost. They can spend TFUEL to access content on the supported applications, giving the token its value.

As of May 2022, Theta Labs said that there were more than 125,000 “edge” nodes around the world, validating transactions on the network.

Theta Labs’ white paper 4.0 proposes several ways in which the Theta streaming service model could capture market share from the dominant companies of the space like Netflix and Hulu. The blockchain infrastructure is expected to reduce the costs of storing and delivering video. Smart contracts can deliver royalties for pay-per-view content directly to creators. And rewarding users with governance tokens can give them an interest in the long-term success of the service. The white paper hypothesizes that the Theta model might displace streaming giants like Netflix, much as Netflix displaced pre-internet companies like Blockbuster.

Theta’s entertainment applications were launched on Samsung devices in 2020 and accessible through the Samsung Daily application, which is downloaded by default on new devices. That put Theta-powered streaming services in the pockets of consumers all over the world.

THETA’s creators at Theta Labs say they have developed a new proof-of-stake (PoS) consensus mechanism.

They describe their system as “an aggregated signature gossip protocol.” New blocks are proposed and finalized by a small number of “validator nodes” run by corporate partners, such as Google, Samsung, Binance and others. THETA’s creators say these nodes provide security equivalent to that of well-known PoS networks like Solana. Another layer of security comes from a second layer of nodes called “guardian nodes,” which seal blocks. There are thousands of these nodes, operated by THETA community members.

The creators say the network can process 1,000 transactions per second with “virtually no carbon footprint.” That compares with single-digit transactions per second for the Bitcoin network, for example. Using a smaller number of nodes is a well-known technique to allow faster processing at the cost of greater centralization. In other words, they disproportionately empower a smaller number of participants.

Theta Network is compatible with Ethereum, meaning that decentralized applications (dapps) on the latter network can be operated on Theta with “no or minor modification,” according to the company. For instance, the wallet service Metamask is usable on Theta.

Theta Labs’ founders are Mitch Liu and Jieyi Long, who both bring serious academic credentials. Liu has an MIT computer science degree and a Stanford MBA. Long has a Peking University microelectronics degree and a Ph.D. in computer engineering from Northwestern.

Theta Labs announced in April 2022 that it would launch a “Theta Metachain” in December 2022. The idea is that anyone would be able to build a “subchain” and plug it into the main Theta blockchain without needing permission from the company. That is intended to increase transaction speed and block finalization speed, theoretically without limit.