VeChain is one of the oldest and most established blockchain projects out there, with its VET token currently ranked near the Top 30 by market cap.
What is VeChain? VeChain is an enterprise-focused public blockchain solution with extremely high-profile partnerships under its belt. Because of its enterprise focus, VeChain is not as decentralized as other blockchain projects. But that is exactly what makes it attractive to enterprises, who might prefer a centralized authority that they can hold accountable.
As a trade off to decentralization, VeChain offers other benefits like central governance, low transaction fees and regulatory compliance. From industries like fashion and agriculture to food supply. And for use cases like traceability, anti-counterfeit, food safety and product life-cycle management, VeChain is working with industry heavyweights from China, Singapore, Australia and Cyprus to advance blockchain enterprise adoption.
So, VeChain and VeThor, VET and VTHO. What’s the difference? Let’s dig in.
Unlike Proof of Work or Proof of Stake, VeChain uses a Proof of Authority or PoA consensus mechanism. How this works is that a total of. Authority Nodes must hold at least 25 million VET. Although Authority Nodes are known to each other, the identities of these Authority Nodes remain hidden to the general public, which have led some critics to point out the possible risk of collusion and centralization.
Although, recently Grant Thorton Cyprus was identified as an Authority Masternode along with already known Authority Masternodes DNV GL and PwC.
If you are big on VeChain, you can also become an Economic Node and help stabilize the network by holding a minimum of 1 million VET and earn some additional perks such as a higher VTHO generation rate. We’ll explain more about VET’s unique dual-token system later.
As we speak, VeChain is working on its new PoA 2.0 SURFACE consensus algorithm with several innovations to allow even faster transaction confirmations for its enterprise users.
As I mentioned, what makes VeChain different is that it is enterprise focused. VeChain markets itself as a Blockchain as a Service or BaaS platform, with the VeChain ToolChain as its key product. VeChain ToolChain works as an off-the-shelf, plug-and-play blockchain solution for enterprises that have little to zero blockchain development capabilities and so allowing enterprises to start adopting blockchain technology right out of the box.
Having been in the space for a while, VeChain is certainly not short on big-name partners such as Deloitte, Walmart China and Shanghai Gas, along with smaller but promising projects in its ecosystems like Fresh Supply Co and Real Items.
VeChain’s most prominent partner to date is the germany risk management company, DNV GL. It co-developed the blockchain-powered digital assurance solution called “My Story” with VeChain. My Story is now used by Italian wine producers, among others, to trace and track the provenance of their wines.
Another big project in the VeChain universe is the community project and multiplayer game, VulcanVerse, built on the VeChain Thor blockchain. The game with its own virtual world is scheduled to launch in Q1 2021.
What about the VET and VeThor tokens? VeChain is one of the unique blockchain projects that features a dual-token system with VET being the main token used as a store of value, and VTHO as the “gas” used to pay for transactions on the Vechain THOR blockchain. This dual-token system gives users and enterprises flexibility to hold VET and generate VTHO or to buy VTHO from the open market without holding any VET. Anyone who holds VET automatically generates VTHO tokens at the rate of 0.000432 VTHO per day, per VET. Just by holding VET in your Exodus wallet allows you to automatically earn VTHO, even while you sleep.
What VET and VTHO holders are watching out for, are the daily number of transactions on VeChain’s mainnet. The higher and more complex the transactions, the greater the VTHO burn. Eventually, if VeChain’s mainnet begins to process multiple millions of transactions a day, the dual tokenomics will kick in and cause both the demand and price of VTHO and VET to increase. Currently, the mainnet is burning an average of 7 million VTHO a day, with the biggest smart contracts attributed to Walmart China, VulcanVerse, DNVGL and Shanghai Gas. Blockchain technology is still in its early stages, but VeChain’s roadmap is in full play with 2021 set to be a big year for the company with greater global enterprise adoption. Does V in VeChain stand for Victory? What are your thoughts on VeChain for 2021? Let us know your predictions in the comments below.