Project Review: VeChain


VeChain (VET) | Coin Review |


VeChain’s primary purpose is to provide a blockchain-based platform which helps to improve the way the supply chain process is managed. VeChain aims to build supply chain blockchain technology for the real world by providing a comprehensive governance structure, a robust economic model as well as advanced Internet of Things integration. The platform offers retailers and consumers the possibility of determining the quality and authenticity of goods. At first glance, VeChain looks like it is just as a supply chain project, similar to WaltonChain, Wabi or Ambrosus but since their mainnet launch, people realize that VeChain is actually also a Blockchain platform.  In February 2018, VeChain rebranded to VeChain Thor. The rebrand moved the company beyond the supply chain into more general enterprise dapp solutions. The company was founded in 2015, with its ICO launched in August 2017. I feel Vechain is a project that every crypto investor should understand and be aware of, even if they choose not to invest in it.

What problem does VeChain solve?

Counterfeit goods harm the prestige of a brand, reduce company profits and influence consumer purchases. In fact,  the total value of fake products globally is expected to reach $1.8 trillion by 2020 according to the 2018 Global Brand Counterfeiting Report. VeChain enables brands to monitor and manage their products along the whole supply chain, by placing Radio-frequency identification (RFID) labels, QR Codes or  NFC chipsets on them. In the case of RFID technology, these Labels feature the entire history of a product, stored on a secure public ledger, that can be viewed by buyers whenever they want. Vechain has partnered with Jiangsu Printed Electronics who was founded by China’s “Father of Global Flexible Electronics”—professor Zhang XiaChang to help with their development of the hardware.

The global supply chains of companies include many different stakeholders, operating in different parts of the world. Instead of stringing together a confusing mix of tracking software between stakeholders, companies can instead plug into the VeChain blockchain. This process doesn’t just improve safety but will ultimately lead to an improvement in brand reputation and customer experience. Beyond counterfeit protection, VeChain also enhances the efficiency of logistics systems through its simplified product tracking and by seamlessly connecting different parts of the supply chain. Global logistics is a complex topic and often includes several separate systems that vary across businesses. Because of this, tracking products in the supply chain can be a huge pain. This problem is solved though VeChains blockchain technology. VeChain leadership has helped introduce this idea to many industries including tobacco and alcohol, frozen goods, automotive, luxury retail goods, pharmaceuticals, cold storage and more.

Product and Vision

The following statement from Vechain summarises their vision and function very well:

“VeChain’s ambition is to develop a decentralized business ecosystem, which enables the flow of information securely and privately, building trust and transparency across borders and companies. VeChain leverages Blockchain to solve the problem of counterfeits and product traceability across supply chains and logistics namely in: Luxury Goods, Wines, Agriculture, Automobile, Transportation, Pharmaceuticals, Logistics and Audit Services.”

In this review, we will take a look at different aspects of the Vechain Platform.

Governance Model

The distribution of VET tokens not only determines consensus but drives the VeChain governance model as well. The stakeholders have the power to vote and elect the governing body of the VeChain Foundation, known as the Board of Steering Committee.  This committee makes decisions on the technology, operations, and even public relations among other aspects. However, not all token holders have voting authority. Voting rights are dependent on two aspects: the number of tokens you hold and your role in the system:

  • Strength Nodes – 10 day maturity period (minimum 1,000,000 VET)

  • Thunder Nodes – 20 day maturity period (minimum 5,000,000 VET)

  • Mjolnir Masternodes – 30 day maturity period (minimum 15,000,000 VET)

  • Thrudheim (Authority) Masternodes – 12/21/17 maturity start date (minimum 25,000,000 VET)

This Proof of Authority consensus mechanism is slightly different from the more popular PoS and PoW. To run a node, each node user has to go through a KYC, and what they stake is not just their tokens but their reputation. The advantage of POA is that it doesn’t use a lot of computational power like POW and it doesn’t need communication between masternodes to reach consensus because of the reputation at stake. This will weaken the decentralization of this blockchain, but it allows for higher scalability and enterprise-grade speed.

Economic/payment model

Vechains technology is aimed at corporations, which means, the payment model has to be suitable for corporate needs and standards. As an enterprise, you want stable fees, but cryptocurrencies price has too much volatility. Vechain solves this problem by utilizing a multi-layer payment model. This feature helps enterprises to manage the payment of multiple Dapps efficiently from one master account and also helps them to work better with business partners who do not want to deal with crypto assets.

Overall Tech and Use Cases

One of the first ways Vechains tech has been applied involves DNV GL winery clients that paste IDs on the bottle to use the VeChain DApp “My Story.” Wine buyers can then eventually see where the grapes were sourced and how they were harvested. Use Cases can be expanded to many different kinds of industries, as the list of partnerships, Vechain has been able to acquire, proves. VeChain Thor has two layers: an IoT-based token layer that tracks digital assets on the blockchain, and a smart-contract layer to track ownership and build dApps to use the data.

Most projects have a whitepaper around 30 or 50 pages long, VeChain’s whitepaper is 114 pages long. So there’s so much to cover, especially on the technical side of the project, it would go beyond the scope of this review.


Sunny Lu leads the team as CEO. For the majority of Lu’s career, he’s led IT and Information System projects for several luxury brands. Most impressively, he was the Chief Information Officer (CIO) for Louis Vuitton China.  Their CFO is Jay Zhang who previously worked at PWC and Deloitte as a senior manager for over 14 years,

Their COO is Kevin Fang, who has over 12 years of experience of consulting and assurance services in cybersecurity, privacy, and emerging technology at PwC. He is also driving the development of blockchain services of PwC in the China/ Hong Kong region. The core team consists of 14 people. One thing I like about them is, if you read their whitepaper and look at the way they do things, they seem to have a lot of foresight, and they don’t rush to please the crowd.

Tokenomics: What is the VET/VTHO Token?

As we have discussed before, VeChain Thor’s economic model was designed to create more predictable and stable environments for retailers. Aside from VET, there will also be another crypto called VeChain Thor Token (VTHO). For holding VET, even if you aren’t running a node, VeChain rewards you with THOR.  This structure is similar to NEO’s GAS and is used to run smart contracts and applications built on VeChainThor. This means that companies which rely on VeChain to track their supply chains and reinforce logistical flows have a real incentive to run their own node.

Growth potential and Roadmap

In June 2018, the VeChain team reached a crucial milestone in launching the platform’s mainnet. With the launch, the network moved off of the Ethereum blockchain onto its own blockchain and, the team began swapping VEN for VET. Next steps for the company is to expand the ecosystem with more dapps and strategic enterprise partnerships. The make or break of any blockchain project is their partnerships, especially for enterprise blockchain solutions. Talking about partnerships, VeChain has done a great job so far, when it comes to attracting big industry players as partners and clients. The most notable being PwC, DNV GL, BMW, and Kuehne & Nagel. VeChain is part of the PwC incubator program, DNV GL provides services to oil & gas, power, maritime, and renewable companies. On top of that, the Chinese government has chosen VeChain to be the blockchain technology partner of the government of Gui’an.

Supply chain tracking and the hardware and software that is involved is an exciting area at the moment, many other projects, e.g. WaltonChain, Ambrosus, Wabi, etc. all produce their own hardware and blockchain technology. At the moment, I don’t think there is a clear leader yet, but Vechain has definitely put itself in a great position to succeed, mainly through their partnerships and early use cases. Furthermore, I think that the platforms at the end of the day that will stand out are not the generic ones that can build all sort of unrelated Dapps, it is the platforms that have a niche market, and then all the Dapps that are built on it are relevant to each other, and they combine to be an ecosystem. Vechain is doing a great job here.

Vechain has an impressive track record of hitting milestones on time,  not the least of which was the mainnet release of Thor. In the fourth quarter of 2018, Vechain released cross-chain and side-chain integration, which will help position the VeChainThor blockchain in the same interoperability league as more mature blockchain platforms.


VeChain is one of the most established blockchain companies in the industry. Not only do they have clients using a functional product, but they also have a team with extensive experience who are very careful and intentional about the way they proceed, in the industry they’re targeting. The long term potential is very promising, with a platform that will host Dapps for enterprises and aims to build an Ecosystem.

On the downside, the biggest concern I have with Vechain is the fact that the space they’re working in is pretty crowded in regards of competitors. Ambrosus, Waltonchain, Devery and Wabi are all working on various parts of Supply Chain infrastructure. It might seem that Vechain is ahead of the curve, but competition in this space will always be though. Although VeChain has some impressive partnerships. Adoption is crucial for long term growth, the success of their products is highly dependent on their ability to attract big customers. As with all Chinese blockchain companies, regulatory risk is always present, although I’m convinced, that Vechain is in a fairly good position because of their partnership with the Chinese government. Experience has taught VeChain’s supporters to continually be reading between the lines for signs of unannounced partnerships. But beyond the hype and speculation, VeChain is clearly a project with powerful supporters. Investors should be well aware of the fact that there are a lot of rumors about potential partnerships, not all of them will turn out to be true.

Furthermore, the consensus mechanism is prone to centralization, which isn’t necessarily a bad thing in the case of Vechain, but it has to be mentioned at this point.

In summary, blockchain is excellent in providing transparency and establishing trust along the supply chain. With these pieces in place, along with an extensive list of corporate partners, VeChain Thor could become a big winner in the blockchain sector.

VET scored 57 out of 76 Points in our evaluation program.

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