Theta Fuel (TFUEL) is the operational token (i.e., "gas") of the Theta protocol. It is used to complete transactions, such as deploying or interacting with smart contracts. If, for example, a relay node provides another party with a video stream it may earn TFUEL, which can subsequently be spent on the video platform for premium content, subscriptions, etc.
According to the Theta team, the average transaction fee could be as low as 10-6 TFUEL. The supply of TFUEL token is set at a protocol level and is initially targeted to have an annual inflation of 5%.
Next to relayers, Validator and Guardian nodes may also earn TFUEL as block rewards. The new TFUEL are subsequently distributed on a stake-weighted basis. For instance, if a node stakes 5MM out of a total 500MM staked THETA, it will earn 1% of the new TFUEL generated each block.