What is VeChain (VET)?
VeChain is one of the first blockchains to focus on solving logistic issues found among companies, and more particularly their supply chains. The technology enables any supply chain to, for example, use QR codes, RFID chips, and other sensors, to give unique identities to products or components of a product. The product sensor is scanned at every step through the manufacturing and transportation process – from supplier to user – so that any issue or request can be handled instantly and precisely, with the ability to easily trace and locate where and when the issue took place.
This is seen as particularly useful when working to prevent fraud in the luxury goods sector, and of course with the validation of ingredients in consumable goods, and especially with ‘time and fault sensitive’ services like car insurance.
Founded in 2015 by Sunny Lu, who’s previous positions included being Louis Vuitton China’s CIO, VeChain has been building a robust network and system around their token $VET.
The VET Token
VET is at the heart of a very promising ecosystem, and is combining CeFi and DeFi in a very SwissBorgy way by attempting to bring together the best of both worlds.
The governance system surrounding the VET token can be considered relatively complex, with voting power distributed in a unique fashion. Holders of more than one million VET are provided more voting power than those with less. These VET millionaires collectively share 20% of the voting power if they have not provided KYC for their holdings – if there are 20 people who each have ≥1 million VET they each get 1% of the total voting power – and alternatively 30% if they have done KYC. The rest of the votes are distributed amongst the community.
In addition, the system relies on 101 Master Nodes, all operators of which have passed KYC and are tasked with validating transaction blocks, among other things. These Master Nodes were, and are, chosen to be run by unrelated parties such as academics, business partners and community members.
The VTHO Token
VTHO is the centralised token used by VeChain to incentivise participation in their ecosystem, execute Smart Contracts, and help market fluctuation from being too impactful on $VET.
Partners and ambitions
VeChain already has big names using its system, with the list growing longer as time progresses. We notice leading brands like LVMH, BMW, H&M and UFC to name a few.
Beyond their multiple partners and the utilities they have attached to their system, VeChain is planning to branch out into other blockchain-related endeavours like hosting, DaPPs, ICO’s and contributing to the ongoing effort of creating compatibility with any internet-connected device, effectively participating with the Internet of Things or IoT.
All in all
VeChain is a complex ecosystem made easy for companies to implement which solves real-life issues. It’s hoping to continue to grow significantly, working towards this objective at great speed, by partnering with powerful brands and providing them with an interoperable solution. This vision requires cutting edge expertise and experience, making it undoubtedly not cost prohibitive for any one brand or participant to do alone.
Building a solid base is surely a great way to secure enough returns for the features they are hoping to invest in, and having survived two market cycles already, it’s fair to say that they know what they are doing and are here for the long run.