- Backed by a team comprising of people hailing from technology and management sectors.
- It relies on a dual token system.
- The project merges Blockchain tech with IoT.
- The advanced PoA consensus is in progress.
- The project has grabbed some major partnerships from various sectors.
- The PoA consensus mechanism is less resource-hungry.
- VET is supported by major crypto exchanges.
- The VeChainThor mobile wallet is available for free.
- VET price has not surged much.
- The project faces competition from players outside the crypto sector.
With so many altcoins launching almost every fortnight, users and investors find it daunting to zero in on the right coin. You will find the new generation crypto coins are made with specific purposes and they are often developed with the aim to address shortcomings of previous generation tokens. One such example is VeChain. It is a Blockchain project with a focus on supply chain management. Since the main net launch and unveiling of the native Vet token, the project has been garnering a lot of attention. It is being promoted as of the players for the top spot in the future. However, you have to analyze various factors before picking them over other options.
The basics and history of VeChain
VeChain was conceived back in 2015 with a keen focus on Blockchain technology-more so on supply chain management in the logistics sector. It was designed to serve the needs of the enterprise-level clientele. The logistics sector deals with the menace of asymmetric information management as the collected data is not communicated and shared optimally at varying levels. There are issues like delayed data transmission and lack of transparency. VeChain steps in here and offers businesses the means to handle a huge amount of data properly through Blockchain tech. VeChain utilizes various technologies to meet its goals that will streamline the supply chain segment. It integrates two emerging technologies- namely DLT and IoT.
The driving force behind this project is the VeChain Foundation, which is based in Singapore. The VeChain CEO is Sunny Lu and he is among the founding members of the project. The other core team members are Jianliang Gu, Kevin Feng, and Jay Zhang.
Post the main net launch in 2018, the project has received the support of several partners. This includes some high-profile partnerships that have made headlines. Examples include the incubation program of Price Waterhouse Coopers, two projects with automobile giants like BMW and Renault and a deal with Penfolds, and an Australian winemaker.
These partnerships have worked in favor of the project but the impact on the price of the VET coin has not been that good. Its price has been on the lower side and a hack taking place in 2019 end caused major embarrassment for the team. In it tokens worth $6.5 million were siphoned off. However, the VeChain project has not come to a halt as such. The proponents of this project think new partnerships will pave way for increased adoption and that will make coin price surge.
The PoA consensus model and VeVote platform
VeChain relies on the PoA consensus model. In it, the nodes have to be authorized. After authorization, the nodes join a pool of similar authorized nodes. There is nothing like the rivalry between the nodes. This also helps evade resource wastage. The PoA system leads to efficient bandwidth usage. This leads to network scalability and faster transactions eventually.
While the prevalent PoA consensus model ensures network efficiency, there are some drawbacks that need attention. In it, a node may try to manipulate the entire system. The PoA offers the probabilistic assurance of transaction security. This leaves space for network partitioning. So, the VeChain Foundation is building the next generation of the consensus model. It is being called PoA 2.0. This is meant to make the network more secure and stable.
The benefits of PoA 2.0 are:
- Absolute finality of transactions and blocks.
- Reduction of network disruption risk.
- Faster transaction confirmation.
VeChain has augmented its governance model so that it can cater to the requirements of large enterprises and regulators without losing on scalability. The VeVote platform has been made to augment governance transparency. It is a cutting-edge decentralized, immutable and transparent voting platform.
The Sync 2 wallet
A lot of the newer generation crypto projects support the creation of Dapps and they also feature native wallets. In the case of VeChain, you get the Sync 2 Wallet. It helps reduce the technical hurdles involved in using Blockchain dApps. The Sync 2 digital wallet liberates you from sticking to specific hardware, OS, and browser. It streamlines the experience of using Dapps. Sync 2 is made to support mainstream web browsers like Chrome, Safari, and Firefox. This will pave the way for large–scale Dapp’s adoption. It can be used like typical web apps and so the flexibility is amazing.
The strategic partnerships
The strong focus of the VeChain project on the supply chain model has enabled it to grab strategic partnerships with established businesses and MNCs. Handling new partners is done without issues as VeChain sticks to a unique Blockchain-as-a-Service model. The clients also get complete infrastructure support. The projects that deserve special mention include the likes of LVMH, BYD, and DNV GL. VeChain has also been working with hospitals for tracking infection risk management post the COVID-19 pandemic. While these partnerships are augmenting the growth of the network, it still has a long way to go before it can catch up with segment giants like Ethereum.
The dual token economic model
While most crypto projects have native tokens, VeChain Blockchain relies on a twin token economic model. This helps evade transaction cost escalation with token value price surges. The VET token is used for governance, staking. Then there is the VTHO token. It is used for paying network transaction charges. VTHO tokens may be created from holding VETs and you can buy these from exchanges too. Through a dual token model, network fees are segregated from VET token price volatility. This makes the network better suited for enterprise users. When you hold VET in wallets, it will create VTHO later. So, you can literally make transactions on its network free.
There are 3 kinds of nodes in the VeChain network- Authority Node, Economic Node, and X-Economic Node. Each type requires an amount of VET. Vet tokens are supported on the top crypto exchanges.
While in the crypto sector, the VeChain network faces little completion, it faces threat from some players in the traditional technology sector. IBM has tied up with Maersk- a shipping giant to develop a shipping management Blockchain platform. IBM has also joined hands with Walmart and Unilever to explore new areas with a Blockchain-powered supply chain system. SAP is also getting into the Blockchain logistics space. Finally, BMW is launching its own Blockchain supply chain solution. These are all large-sized companies with the power to disrupt the sector they get in.
In the crypto-sector, VeChain faces some competition from Waltonchain and IOTA. However, these two projects are yet to grow to be major challenges.
Summing it up
The VeChain project shows the evolution and maturity of the crypto sector. It proves cryptocurrencies are more than just an alternate type of digital currency. The project focuses mostly on Internet of Things solutions and supply chain management. The project has some high-level partnerships with MNCs and these should work in its favor. It is catering to clients from segments like healthcare, logistics, automobile, etc. There are many areas where it gets things done right. These include the dual token system and an enhanced PoA consensus.
There are a few drawbacks to the project. The price of the VET coin has not surged much, since its inception. The December 2019 hacking did make headlines. While the project has few challengers in the crypto sector, it does face steep competition from some big players in traditional technology domains. However, it is too early to write it off and the PoA 2.0 launch may catapult it into the big league.