VeChain (VET)

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What is VeChain (VET)?

VeChain (VET) or VeChain Thor is a blockchain platform designed to streamline commercial logistics and improve supply chain management through the use of distributed ledger technology (DLT). 

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The project’s primary goal is to establish a transparent and efficient network for tracking and authenticating products throughout their life cycle. It uses blockchain technology to ensure data immutability and security in supply chain activities.

Techopedia Explains

Founded in 2015 by Sunny Lu, a former Chief Information Officer (CIO) at Louis Vuitton China, the platform initially operated under the name VeChain before rebranding as VeChain Thor in 2018. 

The VeChain Thor platform now operates as a two-coin system: 

  • VeChain coin (VET), which serves as the primary utility coin for value transfer.
  • VeThor Energy (VTHO) is used for gas fees and computational services.

One standout feature of VeChain is its unique integration of Internet of Things (IoT) devices. This fusion empowers VeChain to effectively track products throughout the supply chain, ensuring transparency and authenticity. 

This capability makes VeChain vital in supply chain management, where order tracking holds significant importance.

Beyond its roots in the supply chain, VeChain extends its influence into diverse sectors, including:

  • Healthcare
  • Automobile
  • Carbon emissions tracking

This versatility has propelled the project into the spotlight within the realm of enterprise blockchain solutions, fostering noteworthy partnerships with entities such as DNV, PwC, and Walmart China.

These collaborations showcase the platform’s versatility and real-world applications. Furthermore, the blockchain platform boasts a unique consensus mechanism, proof of authority (PoA), which drives high throughput and energy efficiency. 

The VET Coin

The VET coin serves as the primary utility asset of the VeChain blockchain. The digital asset is designed for both storing value and facilitating transfers. As of December 14, 2023, the crypto asset boasts a total supply of 85.9 billion coins, with over 72.7 billion currently in circulation.

The VET coin encompasses a range of practical use cases, including:

  • Governance: VET coin holders can engage in network decision-making by voting on proposed changes to network structures and codebase upgrades. This inclusive approach empowers community members to contribute to the expansion and refinement of the VeChain ecosystem.
  • Staking: Crypto staking allows VET holders to lock their assets for a designated period, contributing to the enhancement of network security. In return for their participation, users receive new VET coins as interest. 
  • VTHO Creation: VET plays a crucial role in the creation of the platform’s secondary coin, VeThor (VTHO). This coin acts as the ‘energy’ or ‘gas’ fueling transactions and smart contract executions on the VeChainThor blockchain.
  • Transaction and Service Fee: The digital asset serves as the preferred medium for payment and remittances within the VeChain network. Coin holders utilize this asset to execute transactions, transfer value, and participate in various activities across the VeChainThor blockchain.

How Does VeChain Work?

The VeChainThor platform operates on a PoA consensus algorithm, where the security of transactions is upheld by a network of 101 Authority Masternode operators.

These operators are responsible for executing smart contract operations while strictly adhering to governance rules. To maintain network integrity, users, guided by the steering committee, undergo Know Your Customer (KYC) checks and actively contribute to the network’s expansion.

The implementation of a two-coin system mitigates market speculation risks, instilling confidence among businesses in managing their operating costs effectively.

A key offering of the VeChainThor platform is the VeChain ToolChain, its flagship product. This tool enables businesses of all sizes to collaboratively develop new services and products. The ToolChain delivers the following features:

Platform-as-a-Service (PaaS)

The platform-as-a-service (PaaS) incorporates a Low-Code Deployment framework, enabling individuals to effortlessly create and design templates.

With robust tools at their disposal, users can seamlessly build their blockchain applications. This tool proves invaluable for customizing data visualization forms and integrating existing business applications through a high-quality, developer-friendly application programming interface (API) and software development kit (SDK).

Software-as-a-Service (SaaS)

The Software-as-a-Service (SaaS) incorporates three utility-driven integrations:

  1. Food Safety Track & Trace: Tailored for the food and beverage industry, this feature provides deployable traceability functions such as product provenance and quality certificates.
  2. Sustainability Track & Trace: This integration deploys traceability applications, enabling businesses to record their sustainable footprint throughout the supply chain. This includes using recycled materials, green production processing, eco-friendly packaging and logistics, product carbon footprint, etc. 
  3. General Supply Chain Track & Trace: This functionality addresses general traceability needs and offers standard templates to enhance production processes, marketing strategies, and brand building.

Blockchain-as-a-Service (BaaS)

In Blockchain-as-a-service (BaaS), VeChain offers a versatile API for standardized smart contract services. This facilitates secure information exchange between computer systems over the internet, aligning with VeChain’s mission to promote blockchain adoption across diverse industries through accessible and user-friendly solutions.

NFC Solution

VeChain’s Near Field Communication (NFC) provides a one-stop solution for the supply chain through transparent and tamper-proof blockchain features. This solution is also enhanced with Radio Frequency Identification (RFID) chip anti-counterfeit encryption technology to ensure optimal security.

History of VeChain

VeChain was officially founded in 2015. However, its transition to a public blockchain and the launch of its mainnet occurred in 2018.

Here’s a breakdown of key events since its debut:

Year  Event
2015 VeChain was founded by Sunny Lu.
2017 The platform announced its intention to transition to a public blockchain.
2018 VeChain launched its mainnet with the ticker VET, transitioning from the ERC-20 coin VEN.

Cyprus collaborated with the VeChain Foundation to drive FinTech and blockchain development. 

2019 VeChain announced the first cross-continental logistics and trades solution based on a public blockchain for the food & beverage industry.

The platform launched a Blockchain-as-a-Service (BaaS) tool for businesses.

2020 VeChain introduced blockchain-based sustainability solutions to power eco-friendly ventures.

VeChain joined the China Animal Health and Food Safety Alliance (CAFA) to provide blockchain technology for enterprise members.

2021 VeChain continues to see adoption and partnerships, contributing to its growth.
2022 The platform enhanced its ecosystem, and VeChain ToolChain became a flagship key offering for businesses.

VeeChain signs a $100M sponsorship deal with Ultimate Fight Champion (UFC) sport. 

2023 VeChain announced the launch of VeWorld, a fully decentralized crypto wallet.

Electi Consulting and Vechain collaborated to deploy Ethereum tools to expedite Web3 adoption. 

VeChain and SingularityNet combined blockchain and AI to drive sustainability and build enterprise-grade tools.

VeChain unveiled Virtual Node to enhance resilience.

Key Features of VeChain

VeChain distinguishes itself in the blockchain landscape through several key features:

Two-coin System

VeChain employs a distinctive two-coin system. VET, serving as the primary coin, facilitates value transfers, smart contracts, and various functions.

Meanwhile, VTHO, the secondary coin, functions as the energy or gas necessary for transaction execution and smart contract operations.

PoA Consensus Algorithm

VeChain uses a PoA consensus algorithm to improve transaction security. The network relies on 101 Authority Masternode operators, fostering decentralization while maintaining efficiency.

Sustainability

VeChain’s commitment to sustainability is evident in its energy-efficient blockchain operations. According to the platform website, energy consumption is remarkably low, amounting to only 0.04% of other blockchains.

When compared to Bitcoin, VeChain’s energy consumption is notably lower. The blockchain reportedly utilizes an amount of energy equivalent to mining 2.4% of a single Bitcoin or processing 4.3 transactions on the blockchain.

Governance Rule

Transactions on the VeChainThor network adhere to governance rules overseen by a steering committee. Users, including businesses and developers, must complete KYC verification to participate in network growth.

Tokenomics and Burning Mechanism

According to VeChain’s tokenomics, 70% of transaction fees are burned to decrease the circulating supply, and the rest is allocated to master node operators. This ensures a sustainable reward structure for node owners on the VeChainThor network.

Some Top Projects on the VeChain Ecosystem

Within the diverse VeChain ecosystem, there are several notable utility-driven projects that cater to different industries and offer unique functionalities.

OceanEX

OceanEX stands out as a burgeoning cryptocurrency exchange within the large VeChain ecosystem. Founded on the VeChainThor blockchain, this platform facilitates the simplified trading of digital assets, notably coins built on the VeChain network.

OceanEX prioritizes security, efficiency, and an exceptional user experience, providing a robust environment for investors to trade and manage their diverse digital asset portfolios.

Safe Haven

Safe Haven is another utility-driven project within the VeChainThor blockchain, focusing on digital inheritance solutions.

By leveraging the unique features of VeChain, Safe Haven addresses the crucial issue of securely transferring digital assets and sensitive information to designated beneficiaries in unforeseen circumstances. 

This innovative platform ensures the secure transfer of wealth, passwords, and other digital assets, contributing to a more reliable and forward-looking approach to digital inheritance.

MustangChain

MustangChain is a pioneering project within the VeChain ecosystem that specifically targets the equine (also known as Horse) industry. By harnessing the capabilities of VeChainThor, MustangChain introduces a comprehensive equine management platform. 

This platform is built to transparently and securely record important data points throughout a horse’s lifecycle. This includes essential information on breeding, health, ownership, and competition records. 

The utilization of VeChainThor enhances trust and traceability in the equine sector, marking a significant advancement in the application of blockchain technology to industry-specific use cases.

The Bottom Line

VeChain stands out as an innovative platform offering solutions in logistics, supply chain management, health, automobile, and carbon emissions tracking.

Renowned companies and brands, including Walmart China, PwC, and the UFC, have collaborated with VeChain, leveraging their technology for secure and transparent tracking of goods and services.

As the technology continues to scale, VeChain’s utility-driven integrations hold the potential to provide even more distinctive solutions to various global industries.

References

  1. VEN To VET: The VeChain Thor Rebranding And What The Future Holds (Investinblockchain)
  2. Far More Than Walmart China — How VeChain Leads Blockchain Adoption in the Food Industry Around the Globe (Medium)
  3. VeChain Price Today (Coinmarketcap)
  4. VeThor (VTHO) – Vechain Docs (Vechain)
  5. VeChain ToolChain™ (Vechain)
  6. Low-code Deployment PaaS (Vechain)
  7. Food Safety Track & Trace SaaS (Vechain)
  8. VeChain Successfully Launches Its Public Blockchain — VeChainThor (Medium)
  9. Cyprus to Collaborate with VeChain Foundation and CREAM for Fintech, Blockchain Development in Cyprus (Medium)
  10. VeChain, Together with ASI Group and DNV GL, Announced the First Cross-continental Logistics And Trades Solution Based on Public Blockchain for Food & Beverage Industry On The 2nd CIIE (Medium)
  11. VeChain Launches Revolutionary One-stop BaaS Platform — VeChain ToolChain, Now Anyone Around The World Can Implement Blockchain Technology (Medium)
  12. VeChain Introduces New Blockchain-enabled Sustainability Solution To Power “Green Business” For Enterprises (Medium)
  13. VeChain Joins China Animal Health And Food Safety Alliance (CAFA) As Council Member To Provide Blockchain Technology For Enterprise Members (Medium)
  14. A complete list of Vechain partnerships (Vechaininsider)
  15. UFC and VeChain Announce Historic Global Marketing Partnership – VeChain Becomes First Official Layer 1 Blockchain Partner of UFC — VeChain to Receive Unprecedented Integration into UFC Assets (Medium)
  16. Announcing the Launch of VeChain’s New Official Fully Decentralised Crypto Wallet — VeWorld! (Medium)
  17. Vechain Dev Tool Update — Electi Consulting and Vechain Deploy Ethereum Tools To Expedite Web3 Adoption (Medium)
  18. Vechain and SingularityNet Combine Blockchain + AI To Drive Sustainability and Build Advanced Enterprise-Grade Tools (CisionPRNewswire)
  19. Introducing Virtual Node for Enhanced Resilience (Medium)
  20. Vechain Official Website (Vechain)
  21. VeChainThor Is One Of The Most Eco-friendly Public Blockchains Worldwide, CTI Verified (Medium)
  22. Oceanex Official Website (Oceanex)
  23. Safe Haven Official Website (Safehaven)
  24. MustangChain: Blockchain powered solutions for the Equine industry (Vechaininsider)
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Jimmy Aki
Crypto & Blockchain Writer
Jimmy Aki
Crypto & Blockchain Writer

A graduate of the University of Virginia, Jimmy previously worked for BeInCrypto, Bitcoin Magazine, Decrypt, Cryptonews and other major publications. Alongside writing for Techopedia, Jimmy is also a trained economist, accountant and blockchain instructor with hands-on work experience in the financial sector.