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VeChain (VET) Everything you need to know about this cryptocurrency

VeChain (VET) Everything you need to know about this cryptocurrency

VeChain is a blockchain with a considerable focus on enterprise solutions. VeChainThor is the public blockchain behind these solutions. Solving real-world problems in various industries is one of the biggest focus areas of VeChain and its ecosystem. There are two primary coins in this blockchain. VET is the native coin with numerous use-cases like governance. VTHO is the gas token that handles the gas fees in transactions on VeChain.

Launched in 2015, VeChain is a company that develops and distributes business-focused blockchain solutions. The company started operation in East Asia and, especially in China. Currently, many organizations and government offices collaborate with this company in China and other Asian countries.

What is VeChain (VET)?

VeChain was introduced in 2015 in the BaaS company, BitSE. It has a decentralized nature for business use-cases that uses blockchain as the underlying technology. The public blockchain of VeChain is called VeChainThor, and VET is the native token in this blockchain. Various businesses of various sizes can benefit from this blockchain-based solution.

The solutions on this blockchain are completely focused on real-world use-cases. The whitepaper claims that many of the solutions on VeChain are tested and used by many businesses around the world.

VeChainThor is here to solve many challenges we have seen in previous smart contract-based blockchains. Because of the focus on enterprise solutions, VeChain should offer reliable, transparent, and scalable solutions.

The blockchain uses some of the building blocks of Ethereum like the account model, the EVM, the modified Patricia tree, and the RLP encoding method but improves on them to provide more efficient tools.

As mentioned above, all of the features are developed and improved with real-world use-cases in mind. This blockchain focuses on creating a distributed business ecosystem with companies from various industries around the world.

VeChain offers numerous features and tools for businesses and developers. Meta-transaction features are among the top solutions on this blockchain. These features are planned and developed to make dApp development more user-friendly for businesses.

Some of these meta-transaction features are multi-party payment, multi-task transaction, controllable transaction lifecycle, transaction dependency.

How Does VeChain Work?

Businesses can use numerous tools and features on VeChain to build their decentralized applications. Business dApps can be created for managing many things, from supply chain management and anti-counterfeiting to carbon credits. This blockchain ecosystem provides a blockchain-as-a-service (BAaaS) product that lets developers create their apps on VeChain.

One of the most interesting features of VeChainThor is that single transactions can manage multiple tasks on it. One of the results is that dApps’ users don’t necessarily need to hold crypto for managing the work.

Proof of Authority

Proof of Authority or PoA is the underlying protocol behind the VeChainThor blockchain. Authority Masternode Operators maintain the protocol behind this blockchain. These operators have aligned interests in the development of the VeChain ecosystem. Some selected groups can apply to be an Authority Madsternode (AM) on the blockchain.

The community chooses new AMs from candidates in five categories: Enterprise users, blockchain development teams, business, and technical development partners, community contributors, academic research partners. Candidates should fill a form, and the VeChain Foundation will finally choose new AMs from the applicants.

This protocol addresses many challenges and worries that enterprises have when contributing to the blockchain. It needs low computation power for achieving network security and consensus. Besides, the protocol is controlled via the built-in smart contract.

Governance

VeChain has a balance between centralized and decentralized governance to prove the maximum efficiency and transparency. There is a Steering Committee in this blockchain that manages the decision makings for the improvement and upgrades in the network. The committee is chosen by the community via votes that are managed by VET cryptocurrency.

The voting system on this blockchain is role-based. This mechanism reduces the uncertainty in the development of the network. The on-chain governance mechanism is categorized into three phases: proposals, votings, and executions.

Economic Model

As mentioned above, VeChain has two native tokens: VET and VTHO. The two-token system creates a unique tokenomics for this blockchain ecosystem. One of the most important results of this model is that the cost of using blockchain will be separated from the market speculations.

As mentioned in the official documents of VeChain, “Due to the correlation with the blockchain resource utilization, the cost is more predictable with the monitoring of the VTHO supply and demand.”

VET and VTHO The Tokens of VeChain

VeChain blockchain aims to solve the issues of businesses in using blockchain. Cryptocurrency volatility has always been a big burden in the path of businesses to adopt blockchain. They need more certainty in the economic model of their underlying technology to be able to use it more efficiently. The bi-token system in VeChain is designed to tackle these problems.

The two main tokens in the VeChain blockchain are designed to manage numerous use cases. VET is the value transfer token that enables users to transfer value in the VeChainThor ecosystem. It’s called the smart money of the ecosystem.

VTHO is used for managing the costs of the VeChainThor blockchain. This cryptocurrency will be consumed or destroyed after on-chain operations are performed. Holding VET will result in VTHO generation for the holder at a constant speed. As a result of all of these considerations, the cost of using VeChainThor is detached from the VET price.

The speed of generating VTHO in this blockchain is calculated by a formula like this: 5×10^-8 per VET per block (10s). The blockchain destroys 70% of the VTHO paid in each transaction. The remaining pad VTHO will be distributed between Authority Masternode Operators. The protocol adjusts variables like gas price and velocity to maintain the equilibrium of VTHO demand and supply.

Is VET a Good Investment?

VET is the primary value transfer token in VeChain. Its price can change according to the expansion of the ecosystem, new partnerships, new use-cases, and many more things. The cryptocurrency has shown good capabilities in the 2021 bull run. The tokenomics model of the VeChainThor blockchain is attractive enough for new buyers coming to the market of this token.

One of the most promising facts about VET and its underlying blockchain is its strong ties with the Chinese governments and strength in the market in that region. China is one of the biggest cryptocurrency markets in the world, and VeChain has a good presence there. Besides, VeChain Foundation and other entities in the ecosystem try their best to expand partnerships with companies in that region.

Numerous use-cases for this blockchain in the real world result in more attention from companies. Food safety, anti-counterfeiting, supply chain management, health records management, tracking carbon emissions, and data management are some of the big use-cases for the enterprise-focused blockchain. All of them result in more companies and enterprise users for this ecosystem that can increase the price of VET further.

About VeChain Foundation

Founded in Singapore, VeChain Foundation is the entity behind the development, governance, and improvements on the blockchain. Building the underlying technology features, infrastructures, and services are some of the tasks that this foundation handles.

A steering committee is responsible for the longevity, growth, and stability of this foundation. Renato Grottala, George Kang, and Daniel Kelman are some of the members of this committee.

Besides, there is an advisory board next to these members, including C-Level managers from various industries. The advisory board includes members from fintech, blockchain, and network industries.

Conclusion

VeChain is among the top blockchains that focus on solving real-world problems. Companies and organizations need more reliable tools to manage their data or benefit from other use-cases of decentralized technologies.

They always had worried about reliability, transparency, volatility, and many more things and couldn’t implement the blockchain technology easily. Now, VeChainThor and its numerous tools can help them enjoy this technology.

Some of the unique features like PoA protocol, two-token economic models, and the hybrid governance system are good enough to attract more enterprises to the VeChain ecosystem.

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