Why Delegation Still Matters in a Low-Inflation Environment

As Livepeer’s token inflation rate adjusts dynamically, responding to network participation, we’ve started to see inflation decline in some rounds, a sign that the protocol is evolving as designed.

With participation hovering around 50%, inflation may not be steadily declining just yet, but the shift is underway. That leads many tokenholders to ask:If inflation-based rewards are shrinking, does delegation still matter?

The short answer is: yes, more than ever.

In this post, we’ll break down:

• Why inflation isn’t the only source of rewards
• How delegation supports the core economics of the Livepeer network
• Why delegators play a critical role in shaping the future of decentralized video

Inflation Is Starting to Decline, But Rewards Aren’t Gone

Livepeer’s protocol includes a dynamic inflation model that adjusts based on how many tokens are actively staked in the network. The logic is simple:

• If participation is below 50%, inflation increases to encourage more staking
• If participation is above 50%, inflation decreases, reducing token dilution

Currently, with staking participation hovering around 50%, we’re seeing inflation begin to decline in some rounds, though not consistently across the board.

That said, it’s important to recognize that inflation is still high today, with nearly 30,000 LPT minted daily. It remains a significant source of rewards for orchestrators and delegators alike. But over time, as the protocol matures and usage grows, inflation is designed to trend downward, giving more weight to usage-based fees.

Still, this signals a fundamental shift.

The network will gradually move away from inflation as the dominant reward mechanism, toward one based more on real-world utility, specifically, fees paid by users consuming video and AI compute services on Livepeer.

It’s important to note that usage-based fees are earned by orchestrators for performing the work. Delegators receive a share of those fees only if their chosen orchestrator shares them.

For delegators, this is an opportunity, not a threat. It means your rewards are becoming more directly tied to the actual usage of the network rather than simply protocol incentives. As demand grows, so too does the share of rewards that come from meaningful activity.

Delegation Powers the Network

Staking and delegation aren’t just about earning passive rewards. They’re fundamental to how Livepeer functions as a decentralized network. Here’s why.

Delegation helps secure and stabilize the network

The Livepeer protocol relies on orchestrators, node operators who transcode video, run inference workloads, and deliver services in a decentralized way.

By delegating LPT to an orchestrator, you:

• Signal trust in a specific node operator
• Help that operator gain more work from the network
• Strengthen the overall distribution of responsibility and performance

For certain job types, slashing can be enabled to penalize orchestrators and their delegators for malicious attacks, so it is important to stake towards high-performing and high-integrity nodes. In this way, delegation helps the network remain decentralized, robust, and resilient to capture or failure. 

Delegation drives economic alignment

Delegation is more than a vote of confidence; it’s an economic relationship.When you delegate, you’re effectively choosing where capital (in the form of work and fees) flows.

Operators who deliver high performance, low latency, and reliability can attract more stake and, in turn, more jobs. This aligns incentives:

• Delegators earn a portion of the rewards
• Operators are rewarded for uptime, quality, and serving real jobs
• The network routes work to the most efficient providers

Even with lower inflation, usage-based fees and a healthy economic loop make delegation valuable.

More Usage = More Rewards

We’re not just speculating here; the data backs this up.

Over the past several months, Livepeer has seen significant growth in real, usage-based revenue.Fees paid on the network recently hit an all-time high, with a majority coming from AI-powered video compute and real-time streaming workloads.

This shift matters. It means:

• Node operators are earning more from real jobs
• Delegators are getting a cut of real economic activity
• The system is less dependent on token inflation to function

As new verticals emerge, AI video, decentralized streaming, Farcaster apps, and more, demand for Livepeer services is only expected to grow. Delegation gives you exposure to that growth.

In other words, delegating today means earning from the future of video.

Why Delegation Matters

Let’s recap the key reasons why delegation remains a core pillar of Livepeer, even as inflation moderates:

Network Security

Delegation keeps the network decentralized, secure, and resilient. It ensures orchestrators can’t dominate the system unchecked.

Economic Efficiency

Delegation helps route work to high-performing operators, enabling better service delivery and healthy fee distribution.

Aligned Incentives

Delegators earn a share of both token emissions (while they last) and usage-based fees , making their stake work in multiple ways.

Exposure to Growth

As the network usage expands, delegation connects you directly to rising demand and protocol revenue.

Governance Power

Delegated tokens still count toward onchain governance, helping shape proposals, funding decisions, and protocol evolution.

Even as the reward structure evolves, delegation is how you stay connected to the pulse of the protocol.

It’s not about riding inflation, it’s about helping power the future of decentralized infrastructure.

Ready to participate?

Check out https://explorer.livepeer.org, choose a trusted orchestrator, and start staking your LPT.

Delegation isn’t going away.It’s leveling up.