VeChainThor is a multi-purpose public blockchain platform with an emphasis on enterprise use. The primary focus is the integration of blockchain technology for supply chain management and identifying counterfeit products. The team has adopted a BaaS or Blockchain as a Service model turning them into a public blockchain ecosystem that can be customized for specific business use cases by leveraging smart contracts to exchange value and verify data. The team remains focused on an IoT supply chain management software that utilizes a blockchain to record, store, and transfer ownership of digitalized objects. A two-token economic model allows the ecosystem to thrive while promoting and facilitating applications built on top of the blockchain. The native token VET acts as both a store of value and the currency for smart payments. The VTHO token is the “gas” of the ecosystem and is used to pay for fees associated with using and building applications on the blockchain. VeChain aims to use the immutability of blockchain technology to disrupt the $15.5 trillion global logistics market. VeChainThor is on a promising path towards global enterprise usage, highlighted by their exceptionally strong partnerships such as DNV GL, D.I.G, and PwC.
The VeChain project was founded in 2015 by CEO Sunny Lu . VeChain was a part of the PwC incubator program providing access to the firm’s massive network. DNV GL is one of the main strategic partners of VeChain and plans on assisting them in developing blockchain applications to increase the transparency and efficiency across supply chains . DNV GL is an international accredited registrar and classification society. They oversee and manage various classifications that are industry standards across numerous sectors providing them with an extensive list of potential clients. VeChain Foundation was created as a non-profit operating out of Singapore in 2017 . The VeChainThor team has experience in various industries with different experiences and backgrounds. The composition of the team provides them with a versatile balance of business, technology, operations, and support knowledge that is critical to success. Some of the remarkable team members include CEO Sunny Lu who was the previous Information Officer for Louis Vuitton China, Scott Brisbin as the General Counsel whose client list includes Disney and MGM, and COO Kevin Feng who has a 12-year history in the cybersecurity and privacy sector and initiated the inclusion of blockchain services at PwC China . In total, the team has around 90 employees.
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UTILITY AND INCENTIVES
The VeChainThor Blockchain has evolved into a platform and ecosystem with smart contract applications. VeVID is the most disruptive of these applications. With VeVID, each product is given a unique ID or VID and embedded with a proprietary VeChain smart chip which can be integrated into NFC chips, RFID trackers, or QRCodes . These sensors make up what are called the TouchingPoints of the ecosystem. The TouchingPoints allow digitization of products and provides a feed of data containing environmental, inertial, and location information. VeChain uses a blockchain to facilitate the connection between these sensors to create an Internet of Things and uses smart contracts to enable trustless and collaborative activities amongst multiple parties. The synthesis of blockchain technology and TouchingPoints allows them to record, track and validate log history of devices, enable digital identification of products, enable smart activities between users and machines and ensure the authenticity of items. VeVID uses a secure method of attaching the SHA256 Hash algorithm to each VeVID . Each VID as a subsequent public and private key assigned to it. The private key is needed for authorization and access to the object associated with the corresponding public key, thus providing security, privacy, and enabling privileged interactions on a public blockchain. A consumer can search for a VID on the VeChainThor blockchain and receive information about the corresponding object. VID has multiple use cases including but not limited to confirming the authenticity of luxury goods or foods, displaying the maintenance history of a piece of machinery, or providing certificate of origin.
The VeChainThor Blockchain has several applications and public services which provide utility in general logistics, value transfer, and business operations. Some of the existing applications are VeAudit, a basic auditing service for the VeChainThor Blockchain network, and VeBaaS, a BaaS platform that allows business owners to select or create their own blockchains . To ensure that the VeChainThor blockchain applications can be used the team has decided to adopt a two-token economic model. The two tokens are VeChain Token (VET) and VeThor Token (VTHO). VET acts as a store of value and smart payment currency used to run business activities on the VeChainThor blockchain. VET can be acquired on exchanges or purchased from a dedicated pool if the end-user is a strategic partner. VTHO functions as the gas of the ecosystem, which means it is used as a fee to interact with the blockchain when executing smart contracts or transferring tokens. This two-token model allows VET to appreciate in value without increasing operating risks for businesses by ensuring that the costs to use smart contract applications are consistent. The VeChain Foundation can manipulate VTHO production to guarantee costs will be stable, controllable, and predictable which promotes the usage of applications running on the platform. VET can be staked to earn VTHO and can be purchased from exchanges. VTHO has 4 different reward types that are dependent on the amount of VET that is being held and what type of node is being ran. Each node has different benefits, functions, and requirements. For example, economic nodes do not validate transactions, but provide stability to the ecosystem and greater rewards.
There is a pool 150 million VET that the VeChain Foundation has set aside to constantly stake and reward to nodes. This pool is decreased by 25 million beginning January 1st, 2019. VeChain set aside 50 million VET in the X Node Reward Pool to encourage early adopters of VET to run Economic X nodes to stabilize the economy. Once an X node status has been lost it cannot be retrieved, therefore the number of X Nodes can only decrease. VeChain Authority Nodes or Thrudheim Nodes are the ones responsible for validating all transactions. These nodes also have the highest requirements but largest staking rewards. Authority Nodes are limited to 101 nodes. Each node is selected and assessed by the VeChain Foundation, requires full KYC, a formal application, dedicated hardware for the Node, and 250 million VET at a minimum . Authority nodes produce the highest amount of VTHO and have increased voting authority. Smart contract owners, authority nodes, and individuals who hold considerable VET have voting authority as shown below .
Voting authority is used to elect individuals to the VeChain Foundations. It is made up of a board steering committee, advisory board, and several specialized committees . However important decisions such as changing the consensus algorithm would be put to a vote by all the above network participants and not be decided solely by the Foundation.
Currently VeChainThor ecosystem uses a Proof of Authority (PoA) consensus algorithm . Their PoA protocol has low computational power requirements, communication between Authority Nodes isn’t required to reach consensus, and the system continuity isn’t dependent on the number of Authority Nodes. The Authority Nodes also function as block producers, the PoA protocol ensures that every Authority Node has an equal opportunity to be selected as the block producer . However, as an effort to ensure security, VeChainThor utilizes a deterministic pseudo-random process in conjunction with an “active/inactive” state for Authority Nodes to determine whether an Authority Node is a legitimate option to be selected as the block producer . Since there is no mining in the traditional sense on the VeChainThor blockchain, a 51% attack on the VeChainThor blockchain would require more than 50% of the Authority Nodes to be colluding with one another, which is unlikely. The PoA protocol borrows from centralized and decentralized blockchain mechanisms to create an enterprise-grade public blockchain. Continuous development of VeChainThor Platform has led to Initial Coin Offerings now being launched on the platform, creating an incentive to purchase VET. At the same time, innovative business applications create strong incentives to use VTHO.
The VeChain Foundation offered around 873.378 million VeChain or VEN in the form of ERC-20 tokens in an Initial Coin Offering. 41% of the total supply of tokens or 410 million were sold during the public sale. 9% of the tokens were sold during a private sale. 14% or 140.8 million VEN were sold to enterprise investors. The team received 17% of the total tokens; 5% remain locked and 12% will be used for operations . 200,000 ETH was raised by August 17th, 2017 which was about $60 million at the time  . These VEN tokens were later swapped for VeChainThor Tokens (VET) at a rate of 1 VEN:100 VET when the mainnet was launched on June 30th, 2018 . Currently VeChainThor sits at a market cap of $217 million with 55.45 billion VET circulating and a total supply of 86.712 billion VET after the token swap . VeChainThor is listed on most major exchanges such as Binance and Bithumb.
VeChainThor plans on disrupting the overall global logistics industry which is projected to be worth $15.5 Trillion by 2023 . Their initial primary focuses are in the $13.3 billion supply chain market and the $1.2 Trillion counterfeit goods market  . The immutable aspect of blockchain technology makes logistics and supply chain solutions a natural application. Naturally, there are several competitors such as Waltonchain, Taelpay, Modum, and Amborus. China is responsible for nearly 80% of the world’s counterfeit goods, making it a critical geographical market for a product verification application like the one VeChainThor has developed . VeChainThor has a strong tie to the Chinese government evident by their selections as the blockchain technology partner for the government of Gui’an in China . This relationship gives them an advantage over their competitors with regards to entering and disrupting the market. VeChainThor routinely distinguishes itself from its competitors and most blockchain projects with its extensive list of high-pedigree partnerships ranging from academic institutions such as Oxford University to heralded automobile makers such as BMW .
CURRENT STatus and roadmap
VeChainThor had a very productive 2018. They successfully completed the mainnet launch and token swap. VeChainThor token smart contracts and Web-3 gear became open source on GitHub . They also pushed out various working applications and pilot programs, and the VeChainThor wallet was developed and released . As the team built their platform, others followed suit and built applications on the VeChainThor blockchain. VeChainThor has had several ICOs launch on the blockchain such as Decent.bet, OceanEx, and SafeHaven . BitOcean, an ATM cryptocurrency trading service provider licensed by the Japanese regulator FSA, operates nationwide in both Japan and China . BitOcean deciding to launch their exchange, OceanEx, on the VeChainThor Blockchain highlights the degree to which others are open to build upon the VeChainThor ecosystem. Unlike most cryptocurrency projects, VeChainThor has developed and tested real life applications of their technology. One of the first VeChain dApp collaborations was with DNV GL when they launched “My Story” using VeChain hardware tags to provide product assurance and certification of wine from 3 leading wineries in Italy . The hardware tags in the wine labels can be scanned by users to learn about the history of their wine bottles to verify legitimacy and track everything from grape to bottle . In late 2018, they launched a pilot project with H&M to track product data in the value chain of prospective products . VeChain also partnered with two of China’s leading energy companies, ENN and Shanghai Gas, to test their quality assurance applications and a liquified natural gas management solution . The project is positioning itself to become one of the most used blockchains. VeChainThor’s long-term growth opportunity is promising.