What Is VeChain (VET)?

VeChain (VET), which has been rebranded as VeChainThor, is a platform that aims to bring down the barriers to entry and enable existing businesses to harness the value of blockchain technology to solve real-world problems. VeChainThor carries an increasing number of business applications’ value on its blockchain. In a nutshell, VeChainThor seeks to offer technical features customized according to the actual needs of developers, users, and enterprises.

VeChain was started as a subsidiary of Bitse, a Chinese blockchain company. The cryptocurrency was developed as a modified fork of Ethereum. Therefore, VeChain (VEN) token was initially used to function on the Ethereum blockchain. After transitioning into its own blockchain in 2018, the VeChain blockchain (VEN) was relaunched as VeChainThor (VET) blockchain.

The VeChain protocol seeks to offer use cases such as supply chain management on a blockchain for the food industry, digitizing products using unique blockchain identity, and more. According to the whitepaper, VeChain develops its own process for onboarding businesses unfamiliar with blockchain technology. Accordingly, VeChain ToolChain, a one-stop data BaaS (Blockchain-as-a-Service) platform based on the VeChainThor blockchain, assists organizations in seamlessly integrating their operations and data with blockchain. The network seeks to provide a comprehensive solution by combining the VeChainThor public blockchain, Internet of Things (IoT), industry expertise from business partners in the ecosystem, and possibly artificial intelligence. This solution notably reduces enterprises’ barriers to implementing blockchain technology and focuses on exploring new products and services. Also, multi-party payment, multi-task transaction, customizable transaction lifetime, and transaction dependence are among the meta-transaction characteristics unique to the VeChainThor blockchain’s core protocol, making the development more user-friendly for business adoption.

VeChain delivers a comprehensive system that allows multiple stakeholders in the food and beverage supply chain to capture essential data points about consumables effortlessly. The VeChain IoT sensors collect environmental data such as temperature, humidity, and acceleration, which work in tandem with the VeChain ToolChain platform to upload data to the blockchain in real time or via NFC (near field communication) interface at checkpoints. Another use case that VeChain aims to offer is digitizing products that help in identifying counterfeit products. The platform uses smart NFC tags to digitize products by establishing a link between the actual product and a unique blockchain identity. The platform seeks to provide each product its own landing page, including product information, marketing, and traceability information, and serve as a strong tool for authentication, traceability, reporting, and digital marketing.

VeChainThor aims to incorporate an improved version of the proof-of-authority consensus mechanism. This version of PoA aims to increase stability, which protects the platform from any temporary disruption. Also, the new consensus delivers a faster transaction confirmation. Instead of requiring responses from more than two-thirds of all nodes simultaneously, VeChain’s algorithm just requires the block producer and committee to react on time. In turn, this reduces the possibility of service delays or suspensions. The consensus also aims to provide different levels of security guarantee for the applications in its blockchain. As a result, businesses choose the optimum security guarantee for their needs to enhance application performance.

VeChain offers a two-token mechanism, namely, VET and VTHO. VET’s purpose is to act as a value-transfer medium allowing for quick value flow within the network. The token, VET, forms part of the higher level, where developers and application owners conduct financial and business activities. The fundamental cost of utilizing the VeChainThor blockchain is represented by VTHO, consumed or burned when certain blockchain activities are completed. Cryptocurrency burning is when a fraction of tokens are sent to a wallet with no private key, meaning the tokens are lost forever. Tokens are usually burned to reduce availability and increase market value.

History of VeChain (VET)

VeChain is a Singapore-based company founded by Sunny Lu in 2015. The VeChain Steering Committee, as the elected governing body, is at the heart of its governance system, overseeing numerous functional committees and representing the overall interests of all VeChainThor blockchain stakeholders. Renato Grottola, George Kang, and Sunny Lu are among the steering committee members. VeChain was rebranded as VeChainThor in 2018. Later in the second quarter that year, the blockchain and wallet were launched. The VeChain Foundation launched the whitepaper 2.0 in December 2019.

How Are VET Tokens Created & Staked?

Each transaction on the VeChainThor blockchain is validated by authority masternodes (AM) using the PoA mechanism. An AM is a networked server that runs nodes and maintains a full copy of the blockchain to validate and create blocks. The network rewards AMs with VTHO tokens, which reflect the VeChainThor blockchain’s transaction fees, as an incentive to manage the blockchain’s integrity, contribute to the VeChain ecosystem, and engage in platform governance. The AM that creates the block receives 30% of the VTHOs spent by transactions in each block. The remaining 70% of VTHOs are burned. On the VeChainThor blockchain, AMs do not compete to create blocks; instead, a random algorithm chooses the block producer.

The VET tokens represent the right to utilize the VeChainThor blockchain. Consequently, holding VET tokens automatically generates VTHO. In simple terms, everyone holding VET receives VTHO and can utilize the blockchain unlimitedly as long as the activities consume less VTHO than what was created. VTHO may be exchanged and traded, allowing users to get more VTHO for larger-scale tasks like hosting a blockchain application.

How Many VET Tokens Are Available?

The VeChain platform reports a total fixed supply of 86,712,634,466 VET.