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Gateway Economics in Livepeer

Gateways in Livepeer do not earn money at the protocol level (though they can earn money at the business application level). Livepeer follows a service provider model where gateways are customers purchasing media & AI processing services from the network. The actual protocol-level earners are orchestrators, transcoders, AI workers, and redeemers who provide the computational work and blockchain services. The Payment Flow In Livepeer’s economic model, gateways are consumers of media processing services:
  • Gateways pay Orchestrators for transcoding/AI work via payment tickets
  • Orchestrators pay Transcoders/AI Workers who perform the actual work
  • Redeemers earn fees by redeeming winning payment tickets on-chain

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Who Actually Earns Money?

Node TypeHow They Earn Money
OrchestratorReceives payments from gateways for coordinating work
TranscoderGets paid by orchestrators for video transcoding work
AI WorkerGets paid by orchestrators for AI model inference
RedeemerEarns fees for redeeming winning tickets on blockchain
GatewayPAYS for services (does not earn)

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Gateway Costs

Gateways incur costs for:
  • Video transcoding: Per segment based on pixels processed
  • AI processing: Per pixel based on output dimensions
  • Live AI video: Interval-based payments during streaming

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Why Run a Gateway?

If gateways don’t earn money, why run one?
  • Running your own Gateway means you do not pay a fee to route through another party’s Gateway
  • Content providers run gateways to process their own video/AI content and ensure SLAs on their Orchestrators.
  • Service providers may charge end-users higher rates than what they pay Orchestrators as service fees
  • Integrated platforms use gateways as part of larger media services

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Gateways Arbitrage Earnings

Gateways make money through business arbitrage:
  • Content providers pay gateways for video/AI processing services
  • Gateways pay orchestrators for the actual computational work
The difference is the gateway’s profit margin

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Gateway Fee Structure

As a gateway operator, you don’t set protocol-level “fees” in Livepeer - you set business pricing at the application layer. The protocol only controls what you pay orchestrators, not what you charge customers.

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Protocol-Level Costs (What You Pay)

You control your costs through these configuration flags 1 : 
# Maximum you'll pay per pixel for transcoding
-maxPricePerUnit=1000

# Maximum you'll pay per AI capability/model
-maxPricePerCapability='{"capabilities_prices": [{"pipeline": "text-to-image", "model_id": "stabilityai/sd-turbo", "price_per_unit": 1000}]}'

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Business-Level Pricing (What You Charge)

Your actual fees to end-users are set at the application layer, outside the Livepeer protocol. Common approaches include:
  1. Per-request pricing: Charge per API call to your gateway
  2. Usage-based pricing: Charge per minute of video or per AI generation
  3. Subscription models: Monthly fees for access to your gateway services

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Implementation Example

Here’s how you’d implement pricing logic in your application: 
// Your application code (not in Livepeer protocol)
func calculateUserPrice(requestType string, pixels int64) float64 {
    basePrice := getYourBusinessPrice(requestType)
    yourCost := getOrchestratorCost(pixels)
    profitMargin := 0.20 // 20% margin
    
    return basePrice + yourCost*profitMargin
}

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Price Discovery

Use the CLI to discover orchestrator prices and set your margins: 
livepeer_cli
# Select "Set broadcast config" to see current market rates
# Then set your max prices accordingly
Your “fee” is the difference between what customers pay you and what you pay orchestrators for processing.

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Case Study: Streamplace

Streamplace is a gateway that provides video processing services to content creators. Creators pay Streamplace for video processing, and Streamplace pays orchestrators for the actual work. Streamplace’s profit margin is the difference between what creators pay and what it pays orchestrators. Daydream is another example of a gateway that provides AI video processing services. Builders & Creators pay Daydream for AI video processing, and Daydream pays orchestrators for the actual work. Daydream’s profit margin is the difference between what creators pay and what it pays orchestrators.