Theta Token vs Theta Fuel: Which Is The Better Investment?

(Updated 13. September 2022)

Today I will discuss Theta token vs Theta fuel in terms of use-cases and investments and tell you which one I think is the better investment option.

Here’s the short answer:

Historically speaking, Theta Fuel is a better investment than Theta Token. However, you can stake Theta Token and receive rewards in Theta Fuel, gaining exposure to both assets.

Let’s get into the details about what the difference between them is and how they have performed historically.

Theta Token and Theta Fuel

Theta Token (THETA) is the governance token on the Theta network. Theta Network is a decentralized streaming service. It’s the decentralized version of a combination of YouTube, Twitch and Cabel TV. The native token, THETA, is a vital aspect of the entire system.

Governance tokens, like THETA, are similar to shares in a company – You get a say in what changes should be made to the network/business. All token holder can stake their THETA tokens and vote on proposals from developers etc.

In addition, you can stake THETA to earn a yield. The reward for staking THETA is TFUEL, automatically diversifying your capital. THETA has a max supply, indicating solid tokenomics. More on this later in the article.

Theta fuel (TFUEL) is the second type of token available on the Theta network. TFUEL is the “utility token” on the Theta network.

Theta Fuel (TFUEL) is paid to participants for joining the network and sharing their video streaming resources.

Theta fuel backs many other functions like the deployment of smart contracts, and incentives for relayers for sharing video streams. 

TFUEL does not have a capped supply, and can theoretically speaking be forever inflationary.

In summary:

The Theta Network aims to develop a decentralized alternative to traditional, centralized streaming. THETA is the governance token, and TFUEL is the utility token.

Reasons Why Theta Token (THETA) is Worth Investing in

• Theta token is targeting the video streaming industry which is worth several billion dollars at the moment. Providers of video streaming services have kept things centralized and geographically limited, but Theta aims to disrupt this model with blockchain technology. Holding THETA ensures you’re benefiting from the potential success of The Theta Network.
   
• Theta aims to incentivize a global network of computers (users) to offer their spare bandwidth and computing resources. Theta’s peer-to-peer network will have more bandwidth available as people keep joining its pool of users to share resources for streaming videos. Holding THETA gives you the ability to vote on future development, and shape the Theta Network. 
   
• In 2017, Theta Network had a private token sale of around $20 million and sold 30% of Theta tokens. Many corporate giants have sided with this project and got on board as strategic investors after 2017. Some of them are Samsung NEXT, Sony Innovation Fund, DCM, Sierra Ventures, Digital Media Investments, and so on. This further builds the case for holding THETA.
  
• THETA has a maximum supply, limiting potential inflation.

Reasons Why Theta Fuel (TFUEL) is Worth Investing in

I’ve written a full article about TFUEL as an investment. Here are some of the bullet points:

• Theta fuel (TFUEL) is a highly liquid token that regulates the microtransactions occurring on the Theta network. This token has high utility, and we in theory increase in value together with the success of Theta Network.
   
• Theta fuel is vital to the functionality of Theta Network; without its existence, the entire ecosystem would collapse.
   
• Over 40% of the total supply of TFUEL is currently staked. (source) This is good for price and trust in the network.
  
• The top 5 richest wallets hold only 3.5% of the supply, indicating a good degree of decentralization and minimizing the risk of price manipulation from whales.

Historical Performance Of Theta Token And Theta Fuel

I’ll measure their performance from the bottom of the covid-crash in March of 2020. I’ll show you the returns generated in the bullmarket, and how they have performed in the following bear market that we’re currently in (writing in September of 2022).

THETA Historical Performance:

Theta token surged by almost fifty thousand percent in the bull market of 2020 and 2021. Investing $1,000 would net you $477,500 in roughly two years.

After the surge, THETA crashed by 93.5%. It might crash even further, as the bear market is still going. The $477,500 would have shrunk to $31,037.

TFUEL Historical Performance:

Theta fuel surged by almost one hundred thousand percent in the bull market of 2020 and 2021! Investing $1,000 would net you $966,500 in roughly two years.

After the surge, TFUEL crashed by 92%. As with THETA, it might crash even further in the short/mid-term because the bear market is still going.

The $966,500 would have shrunk to $62,822. That’s roughly 2x overall performance of THETA.

Although both have been great investments historically speaking, Theta Fuel has performed best in the past. In other words, Theta Fuel has been a better investment than Theta Token. This does not guarantee that it will continue to be the better investment.

Suggested reading:

• Is Solana A Good Investment?
• Crypto Investing Strategy For Beginners: Three Easy to Follow Strategies

Conclusion: Invest In THETA and Stake It

Although TFUEL has historically been the better investment, I think the best investment is THETA. The main reason is that you can stake it, and gain exposure to both tokens. Buying some TFUEL initially as well might be even better, to make sure your exposure is significant from day one.

None of this is financial advice. Do your own research, and remember that I’m not a financial advisor.