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Probabilistic Micropayments

Payments are implemented using a probabilistic micropayment protocol.

Broadcasters send "lottery tickets" to orchestrators in exchange for transcoded results. Each "lottery ticket" is defined with:

  • a face value: the payout to the orchestrator if the ticket wins, and
  • a probability that the ticket will win.

Each ticket is treated as a micropayment worth the expected value of the ticket (calculated as: face value multiplied by probability that the ticket will win).

Broadcasters set a max ticket expected value (EV) which defines the max value that a broadcaster is willing to send out before receiving results from an orchestrator. For example, if the max ticket EV is set to 3000 gwei and an orchestrator sets its ticket EV to 4000 gwei, the broadcaster will exclude the orchestrator from selection. The default max ticket EV in livepeer is set to be reasonable (3000 gwei) so at this time broadcaster operators are encouraged to just use the default because using a non-default value could either lead to broadcasters excluding too many orchestrators from selection or taking on additional risk by sending a large amount of value without receiving results.