A blockchain net with two internal tokens, that was created by an ex-manager of Louis Vuitton China, funded by BMW and is now working with Walmart, PuffBar and a tea province. All that could sound pretty insane, but VeChain is real and still developing. 😳
What is VeChain?
VeChain is a blockchain platform that provides B2B solutions for supply chain management, anti-counterfeiting, and automation of other business processes. VeChain is based on a custom Proof-of-Authority consensus algorithm.
History behind the project
VeChain startup was founded in 2015 by a former top manager of Louis Vuitton China Sunny Lu and Jen Zhang, who worked at Deloitte and PricewaterhouseCoopers. 🇨🇳
In 2017, the non-profit Vechain Foundation was registered. They took over the development and support of the VeChain blockchain platform and ecosystem, as well as started attracting partners like BMW, which started supporting the project after the VET native token sale. 🚗
To understand how the custom consensus algorithm works and what are its advantages over other blockchains we shall firstly make the tokenomics clear. 💧
Why two tokens?
Before the VeChain Foundation took over the marketing and development a billion of VEN native tokens, based on Ethereum were introduced with 9% sold on a private tokensale for early investors and 41% dedicated to an open ICO with the rest 50% being used as royalties or held for governance. After the VeChainThor mainnet, which is now used for all the on-chain operations, execution was introduced that same year, VEN tokens were swapped into VET tokens. 🔄
Right now the blockchain uses VET and VTHO tokens. VTHO is produced by staking VET in a ratio of 4,32 VTHO for 10000 VET daily and used for commission payment in the VeChainThor net. 🥅 Around 86,7B VET tokens exist with 70% dedicated for public and private sales and 30% being used as developer and team rewards. VET is in the list of top-50 crypto assets by market cap. What else is VET used for?
- VET is used for transactions inside the VeChainThor blockchain.
- VET is used as a deposit for launching a node inside VeChainThor.
- Once again VET can be staked to earn VTHO.
- VET can be held to achieve the masternode status.
How does the consensus algorithm work and what is a masternode?
Proof-of-Authority is a modified version of PoS, where nodes generate and approve transactions. Master nodes that lead all the other nodes are not anonymous and go through a strict list of inspections and requirements. 🧐 Only 101 such nodes are working in the net.
Regular nodes are divided into two categories: Economical nodes and the so-called X-nodes. X-nodes don’t create or inspect blocks and don’t require high-efficiency gear - their job is to provide the nets stability and to create VTHO. There are 1665 economical nodes and 2430 X-nodes in total. A node can only be possessed by an individual after purchasing a specialised NFT. 🖼
What about the speed?
A new block can be generated every 10 seconds, which is equal to 10.000 TPS according to developers. However, VeChain Foundation can adjust the generation time to the nets needs. 🔧
But what is the purpose?
VeChain are currently the pioneers of logistics focused blockchain technology development and implementation. 🥇
The way VeChain works is simple, yet very effective. Every object is labelled with a unique Vechain ID identifier, which is afterwards made into a VeChainThor blockchain record. A corresponding physical mark is placed on the object itself (An NFC chip, an RFID mark or a QR-code) and the distributor gets the ability of tracking by receiving a unique API of that mark. 🔍
Companies can choose from three application options
- A fully custom VeChainThor based application, that company fully develops itself.
- A low-code application that can be constructed with pre-made program blocks.
- A work-ready application that is fully maintained by VeChain.
VeChain have already made multiple successful projects like the VerifyCar for BMW - an app that tracks all the cars indicators and uses blockchain for easier interaction with the service. Other cases are Walmart China and Bright Food engaging VeChain for quality control, Shuangjiang province tracking delivery chains via VeChain or PuffBar using VeChain for counterfeiting.👮♂️
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 partnered with DNV GL to launch the VeTrust app. It included 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. 🙌
We really think that the project might be one of the most important engines of progress for blockchain right now. It is so rare to find a truly inspiring blockchain use idea that is already making success nowadays, but VeChain proves us wrong. 😎
Stay tuned 📻