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What Is VeChain (VET)?
VeChain (VET) is a versatile enterprise-grade L1 smart contract platform. VET began in 2015 as a private consortium chain, working with a host of enterprises to explore blockchain applications. VeChain would begin its transition to public blockchain in 2017 with the ERC-20 token VEN before launching a mainnet of its own in 2018 using the ticker VET.
VeChain aims to use distributed governance and Internet of Things (IoT) technologies to create an ecosystem that solves major data hurdles for multiple global industries from medical to energy, food & beverage to sustainability and SDG goals. By leveraging the power of trustless data, VET is building the digital backbone that will underpin the fourth industrial revolution, which demands real-time and trustless data sharing between many participants.
The platform uses two tokens, VET and VTHO, to manage and create value based on its VeChainThor public blockchain. VET generates VTHO and acts as the store of value and value transfer medium. VTHO is used to pay GAS costs, separating the need to expend VET when writing data. This has the additional benefit of ensuring costs of using the network can be kept stable by tweaking certain variables such as the amount of VTHO required to service a transaction or by increasing the VTHO generation rate. Such actions first require all-stakeholder community votes.
VeChain has demonstrated massively boosted efficiency, traceability, and transparency across data trails, supply chains, and within novel ecosystems, such as those in San Marino targeting UN SDGs.
Who Are the Founders of VeChain (VET)?
VeChain is the product of creator and co-founder Sunny Lu, an IT executive who was formerly CIO of Louis Vuitton China.
Lu has since become a well-known name within the cryptocurrency industry. He has drawn attention to the ability of blockchain technology to solve transparency, in particular, arguing that it can create “trust-free” enterprise/business structures that do not suffer from information corruption thanks to close working collaborations with key auditing/certification consultants such as PriceWaterhouseCoopers and DNV who verify data quality and certify industrial processes.
Fellow co-founder Jay Zhang, who directs VeChain’s global corporate structure, governance, and financial management, previously worked for Deloitte and PriceWaterhouseCoopers in the finance and risk management sphere.
Having originally begun life in 2015, VeChain is one of the oldest dedicated smart contract platforms, with reflected prestige among enterprise clients.
What Makes VeChain (VET) Unique?
VeChain exists to disrupt traditional business models and is best known for its work in the supply chain, an industry that has changed little over the decades. Its work in providing a decentralized trust layer for multi-party ecosystems has already seen major successes with high-profile clientele and government bodies.
Using transparent technology with no single point of weakness or control allows for greater security, efficiency, and ease of tracking for all kinds of data while reducing costs through trustless automation via smart contracts. Carbon, supply chain, international logistics, incentivized ecosystems, automobile passports, and more greatly benefit from the digitization of trust and collaboration it enables.
VeChain’s platform accordingly has very wide appeal to many different clients and industries.
VeChain’s official literature notes that its unique proposition lies in its dual-token setup alongside transformative protocols such as ‘fee delegation’ and its one-stop ‘ToolChain’ platform, which means crypto-wary companies can pay in fiat for VeChain’s blockchain-as-a-service. At the same time, smart contracts handle gas payment costs, ensuring frictionless use of the network, even in strict jurisdictions.
How Many VeChain (VET) Coins Are There In Circulation?
VeChain has two in-house tokens: (VET) and VeThor (VTHO). Described as a unique offering for such a platform, the dual-token system is designed to avoid fee fluctuations and network congestion.
VET is the token used for transactions and other activities, while VTHO provides fee payments and thus functions as a “gas token,” similar to how gas functions for Ethereum (ETH) transactions.
VET holders generate a small amount of passive income in VTHO, while 70% of the VTHO used in a VET payment is destroyed.
VTHO is generated based on VET holdings, while VET has a maximum fixed supply of 86,712,634,466 tokens.
How Is the VeChain (VET) Network Secured?
VeChain (VET) is a Proof of Authority (PoA) token, requiring relatively low computing power to achieve network security versus a protocol such as Bitcoin. A recent CTI report showed that VeChain’s annual carbon footprint is incredibly small at just 2.4% of the emissions of mining a single Bitcoin, thus making PoA an incredibly efficient consensus mechanism for securing the network.
Proof-of-authority is a process wherein authority masternode operators are selected by an independent Steering Committee, thus giving them ‘authority’ to run a masternode. This model is particularly attractive for enterprises who want assurances about the integrity and quality of validators running the network and assurances bad actors can be ejected if needed.
Where Can You Buy VeChain (VET)?
VET is a freely-tradable token available on major exchanges, while markets also exist for VTHO.
VET had major Binance and Huobi Global markets, among other platforms, with pairs for cryptocurrencies, stablecoins, and fiat currencies.