VeChain is a blockchain platform designed to improve supply chain management processes. It has its own cryptocurrency, VET, which is used to pay for transactions on the platform. This article will discuss what VeChain is, how VET works, and how you can get started with VeChain and VET.
- VeChain is a blockchain platform that provides B2B solutions for supply chain management, anti-counterfeiting, and automation of other business processes.
- The project uses two cryptocurrencies: the native coin VeChain (VET) and VeThor (VTHO), which is required to pay transaction fees.
- Founded in 2015, VeChain is one of the pioneers in the development and implementation of blockchain solutions for authenticity tracking and retail sales, and currently has offices in China, the EU, the US, Japan and Singapore;
- The company has long-term partnerships with major international corporations: BMW, BYD, Wallmart and others, as well as with government agencies in China and other countries.
Who created and financed VeChain?
Startup VeChain was founded in 2015 in Singapore by former top manager of Louis Vuitton China Sunny Lu and Jen Zhang, who worked at Deloitte and PricewaterhouseCoopers.
In 2017, the non-profit organization Vechain Foundation was registered, which took over the development and support of the blockchain platform, as well as attracting partners and developing the VeChain ecosystem.
At the VET native coin token sale that took place the same year, VeChain managed to raise $22 million. Several large partnerships already concluded at that time, including with the German automaker BMW, helped attract the attention of investors.
During the spring of 2018, VeChain raised investments from PricewaterhouseCoopers (PwC), DNV GL, Haitao Capital, BlockVC and IOSG Ventures in three corporate rounds.
Initially, the VeChain prototype worked on the Ethereum network, but in the summer of 2018, the developers launched the VeChainThor mainnet. Over the following years, the project opened subsidiaries in China, the European Union, the USA, and Japan. In February 2022, the VeChain Foundation Headquarters in San Marino was opened, highlighting the importance of the European market for the company.
Why are there two cryptocurrencies in VeChain and what are their functions?
In 2017, the creators of VeChain issued 1 billion native tokens called VEN on the Ethereum network. 9% of them were sold at a closed token sale for early investors, and another 41% were allocated for an open ICO, which raised $20 million. After the launch of the VeChainThor blockchain, VEN was exchanged for native VET coins at a rate of 1:100.
Now the VeChainThor blockchain uses two native cryptocurrencies – VeChain Token (VET) and VeThor Token (VTHO).
The total supply of VET is about 86.7 billion tokens, of which almost 70% was distributed to early investors and token sale participants, and the remaining 30% was used to develop the VeChain ecosystem and reward developers.
The VeChain coin has four basic functions:
- means of calculation: VET is used for transfers in the VeChainThor blockchain;
- pledge — this cryptocurrency is needed to launch any VeChain node;
- staking – while in the node wallet, VET generates a VTHO token. For every 10,000 VET on node addresses 4.32 VTHO are produced per day;
- control – nodes get the opportunity to participate in network management in accordance with the number of VETs held. All 101 trusted masternodes share 40% of the total votes.
The VeThor Token (VTHO) is used to pay transfer fees on the VeChainThor network. 70% of all paid VTHO fees are burned and the remaining 30% become rewards for trusted masternodes.
VeChain Token (VET) is in the TOP-50 crypto assets in terms of capitalization. Both cryptocurrencies are traded on all major cryptocurrency exchanges.
What is the VeChainThor blockchain?
All VeChain solutions run on the VeСhainThor blockchain, built on the original Proof-of-Authority consensus mechanism. This is a modified Proof-of-Stake algorithm, in which block generation and transaction approval are assigned to network nodes (nodes).
In VeСhainThor, the master nodes (Authority Masternodes) cannot be anonymous: before contributing to the stability and security and efficiency of the blockchain, each candidate passes the VeChain Foundation verification for compliance with technical requirements and an identification procedure. The VeChain blockchain is supported by 101 such nodes, each of which requires a stake of 250 million VET.
There are three types of economic nodes and four types of X nodes in VeChainThor. They do not validate transactions, do not generate blocks, and do not need high-performance hardware, but they ensure the stability of the ecosystem and produce VTHO (the second ecosystem asset).
The requirements for the minimum stake (from 600 thousand to 15 million VET), the “maturation” of rewards in the form of VTHO (from 10 to 90 days), as well as related bonuses depend on the type of node.
The number of nodes itself is limited: as of August 2022, there were 1665 economic nodes and 2430 X nodes. Node ownership is validated by the relevant NFTs traded on a special marketplace.
New blocks in the VeChainThor blockchain are generated every 10 seconds. According to the developers, with such parameters, the network performance reaches 10,000 transactions per second. However, VeChain Foundation can flexibly adjust block generation time and network performance depending on current needs.
The VeChainThor blockchain has a virtual machine. It is developed on the basis of the Ethereum Virtual Machine (EVM) and supports the execution of smart contracts in the Solidity language. It is possible to issue custom tokens, including NFTs, and the operation of decentralized applications on the network.
How do VeChain blockchain solutions help businesses?
Vechain has become one of the pioneers in the development and implementation of blockchain solutions for logistics, tracking the authenticity of goods, retail sales and other business processes.
The principle of operation of VeChain solutions is based on the digitalization of physical objects: each monitored object is assigned a unique identifier (Vechain ID). The smart contract creates a corresponding entry in the VeChainThor blockchain. On the object itself there is a carrier (NFC chip, RFID tag or QR code) with a recorded Vechain ID, or IoT sensors that record data about the location and state of the object.
Interaction with the VeChainThor blockchain and stored data is possible through the API that Vechain provides to its partners. With it, you can track the path of items in real time: their movement through the warehouses of distributors, the date and place of their sale, and other actions.
Depending on their needs, enterprises can choose different types of blockchain products:
- the underlying platform for which you need to develop applications yourself;
- a low-code mid-level platform that can be assembled from ready-made software blocks;
- a ready-made application, fully adapted to the needs of the client and ready for implementation.
Since its inception, VeChain has worked on pilot projects with more than 200 companies around the world. Here are just a few of the more impressive examples:
- in partnership with BMW, the VerifyCar application was developed, which records car usage data (mileage, insurance and service marks) on the blockchain, which facilitates interaction with car service centers.
- In 2018 submitted the BrightCode platform built on the VeChainThor blockchain for Bright Food Corporation. With a QR code, consumers can receive verified information about the origin of food.
- Walmart China announced a joint project with VeChain in 2019 to track food authenticity and safety.
- In the same year, authorities in the Chinese province of Shuangjiang approved the use of the VeChain network to track tea supply chains;
- In early 2021, e-cigarette manufacturer PuffBar decided to use the VeChain platform to fight counterfeits.
- VeChain develops a tracking platform for agricultural products commissioned by the government of the Chinese province of Inner Mongolia. Several enterprises in the region are already using this system.
What decentralized applications are powered by VeChain?
Although VeChain was originally focused on B2B solutions, the emergence of many decentralized ecosystems has stimulated the development of decentralized finance (DeFi) based on VeChainThor, which has high performance.
According to the service VeChainStats, as of August 2022, about 30 user tokens have been issued in the VeChain ecosystem. Several dozens of DeFi applications operate in the VeChain network, including a decentralized crypto exchange VexChange, as well as the Vulcan Verse virtual world and blockchain games. VeChain also released over 30 NFT collections, many of which are clones of popular collections on Ethereum.
In May 2022, VeChain, in collaboration with asset tokenization company Stable, launched native stablecoin VeUSDfully backed by the US dollar. Collateral for VeUSD is held in a trust account managed by Prime Trust. As of August 2022, VeUSD capitalization is about $5.5 million.
How is VeChain developing?
Since its founding, VeChain has been actively working with universities around the world to create blockchain solutions for healthcare and environmental protection. Research partners include Tsinghua University, Stanford University, Massachusetts Institute of Technology, Oxford Institute of Mathematics and City University of Hong Kong.
One of the brightest examples was the use of the VeChainThor blockchain for healthcare and prevention of the spread of COVID-19.
In September 2020 VeChain in partnership with DNV GL launched VeTrust app. It includes a cleanliness and safety checklist that hotels can use when cleaning rooms and preparing food for guests. More than 200 hotels and public places have been connected to this system in China.
In addition, municipal governments in a number of Chinese provinces used VeTrust to visualize the infection risk management process in 95 residential complexes with a total population of more than 300,000 people.
At the beginning of 2022 VeChain Foundation announced on the launch of the VeCarbon platform for calculating and controlling carbon emissions. The product helps businesses achieve carbon neutrality, emissions targets and sustainable development goals. The product is used in several enterprises. It has also been tested in electric vehicles Chinese automaker BYD: Car owners could earn small rewards by selling their carbon credits.
Since August 2022, a VeChain partner in the VeCarbon project became a cloud servicewith Amazon Web Services (AWS).
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VeChain is a blockchain-based platform and VET is its native cryptocurrency. It was created with the goal of providing a secure and trustless environment for business activities. It has become a popular choice for businesses to conduct their transactions in a secure, transparent and efficient way. All in all, VeChain and VET cryptocurrency offer a platform for business owners to conduct their activities in a secure and trustless environment.
What is VeChain and VET cryptocurrency?
VeChain is a blockchain-enabled platform that is designed to enhance supply chain management processes. It is powered by the VeChain Token (VET) and Thor energy.
VET is the native cryptocurrency of the VeChain platform. It is used to power the platform’s smart contracts, facilitate payments, and reward users for their contributions to the network.