Blockchain technology is widely recognized for its immutability, transparency, and immense potential to change our world. However, the costs associated with operating blockchain apps pose challenges for institutional adopters, limiting the tech's ability to become mainstream.
To tackle these challenges, projects like VeChain and the Foundation behind the VeChainThor blockchain want to solve this issue by building enterprise-facing tools to overcome adoption hurdles.
In this article, we explain what VeChain is all about, explore its unique features, how it works (VET), and explore parts of the VeChainThor ecosystem.
What is VechainThor?
VeChainThor is the name of VeChain’s layer-1 smart contract platform, built to help enterprise developers build custom smart contracts, services, and DApps, with real-world applications ranging from logistics, supply chain management, sustainability, healthcare, and more. VeChain and other industries can use blockchain to improve data management practices and daily operational processes and create more engaging business models for consumers.
As an alternative to Ethereum, Solana, and other popular L1 chains, VeChain is uniquely positioned, having focused on the development of real-world adoption and enterprise solutions as its competitive advantage.
What problem does VeChain solve?
VeChain identified limitations in Ethereum that make it unsuitable for large-scale commercial decentralized applications (DApps). For example, Ethereum lacks a robust governance framework for swift and transparent protocol adjustments to address emerging issues or breakthroughs.
In addition, Ethereum lacks an appropriate economic model, preventing businesses from managing DApp costs effectively, especially given the volatility of Ether (ETH) prices.
What are VeChain’s core features?
VeChainThor addresses these challenges through distinctive features:
- Meta-transaction features: Transaction Lifecycle Control allows users to control when a transaction is executed or abandoned, even during high-capacity blockchain operations. Delegating transaction fees enables users to interact with decentralized applications (dApps) and make payments without holding or managing crypto.
- Proof-of-Authority (PoA) consensus 2.0: PoA 2.0 is designed to ensure data integrity while providing high throughput and scalability capabilities to meet the dynamic needs of businesses. PoA 2.0, launched in 2022, introduced finality and combined the strengths of the Nakamoto and Byzantine Fault Tolerance (BFT) architectures while eliminating their flaws.
- On-chain governance mechanism: Facilitates transparent decision-making and quick protocol changes based on the community's consensus, driven by the various kinds of nodes in the ecosystem.
- Unique Two-Token System: The two-token model — consisting of VET (VeChain Token) and VTHO (VeThor Token) — shields transaction fees from the direct impact of volatility, addressing a common challenge in single-token economic models. This approach contributes to a more stable and sustainable economic ecosystem for VeChain users and stakeholders.
How does VeChain work?
VeChain is a prominent Proof of Authority (PoA) consensus protocol. In the PoA framework, identity plays a pivotal role as a stake in validating transactions and creating new blocks. Validators secure their positions based on their identity, creating an incentive structure where maintaining the transaction process is directly linked to preserving their reputation.
In this model, block producers are not anonymous as they must undergo KYC, sharply contrasting with consensus mechanisms like Proof of Work (PoW). PoA is a desirable attribute from a regulatory and enterprise perspective, offering a means to eject bad actors and a path of recourse if any attempts at network manipulation arise.
This helps VeChain offer enterprise actors greater security and peace of mind. PoA is also very energy efficient, eliminating the need for a minimum number of validators to achieve consensus. The result is swift transaction speed, low cost, and high scalability compared to other consensus mechanisms.
Governance
VeChain's governance structure involves a Steering Committee elected by the community stakeholders. This committee makes strategic decisions and supervises VeChain improvement proposals (VIPs). This system reduces uncertainty in organizational and technical development thanks to role-based voting.
Once voting events are enacted, VeChain’s node network, composed of thousands of Economic and X-Nodes, votes on initiatives to determine their outcome. Once a decision has been reached, the outcome must be enacted, ensuring the ultimate decision lies in the hands of the token stakeholders.
Vechain Token (VET) and VeChainThor Energy (VTHO)
VeChain's dual-token system consists of two key elements: VeChain Token (VET) and VeChainThor Energy (VTHO).
- VET is the primary value carrier, facilitating investments, generating the gas token, and stakeholder voting within the ecosystem with a fixed total supply.
- VTHO is the energy or "gas," empowering transactions and smart contracts on the VeChainThor blockchain.
The unique feature of this system lies in the generation of VTHO through the holding of VET. This approach strategically uncouples the blockchain usage cost from VET's market price, ensuring stable transaction costs.
Vechain Token VET price
VeChain's price history has followed the general crypto market. Since its launch on the VeChainThor blockchain in 2018, VET initially held around the $0.005 mark until early 2021. However, starting in January 2021, the price surged, hitting an all-time high of $0.2782 in both April 2021. Currently, VET trades at $0.02932, and the fixed supply of VET stands at 85,985,041,177 VET with a market cap of $2,520,135,004.
What is VeChain ToolChain all about?
VeChain ToolChain is an enterprise SaaS product built on the VeChainThor blockchain, providing solutions from product lifecycle management to carbon credit solutions and environmental sustainability reporting.
Offered as platform-as-a-service (PaaS), software-as-a-service (SaaS), and blockchain-as-a-service (BaaS), VeChain ToolChain empowers businesses to integrate blockchain technology effortlessly into their daily operations. Its goal is to generate value for stakeholders, enhance transparency, and offer valuable insights into product life cycles.
For example, the low-code deployment PaaS allows users to design process templates and leverage built-in tools, streamlining how blockchain apps are created. Additionally, SaaS caters to industries that require deployable traceability features like quality certificates.
Through BaaS, VeChain introduces a restful API for standardized smart contract services, facilitating secure information exchange between computer systems over the internet. The VeChain ToolChain is essentially a comprehensive approach to applying blockchain technology across diverse industries.
Does the VeChain protocol support NFTS?
VeChain has been using NFT technology for commercial applications since 2018 alongside the global certification body, DNV. VeChain also has a thriving non-fungible token (NFT) community. The blockchain hosts decentralized NFT marketplaces — VeSea, World of V, and BlackVeMarket — designed to create and trade VIP-181 tokens.
The VIP-181 Standard helps provide fundamental functionality for tokens within smart contracts on the VeChain blockchain.
VeChain recently published a Web3-As-A-Service platform, VORJ, that greatly simplified the deployment of digital assets such as NFTs to the VeChainThor blockchain. You can find that here: https://www.vorj.io
VechainThor Protocol in Tangem Wallet
VeChain is coming to Tangem Wallet as part of our Winter Blockchain Marathon. Tangem users can securely receive, send, store, and swap their VET, VTHO coins, and other tokens built on the VeChainThor blockchain network.
The Tangem Wallet is a solid cold storage choice for a few reasons. First, it offers top-notch security with an EAL6+ CC-certified chip that protects against all attacks. Then, the convenience of a physical card you can carry anywhere and use with any NFC-enabled smartphone.