About VeChain (VET)

VeChain Frequently Asked Questions (FAQ)

What is the primary purpose of VeChain (VET) in the blockchain industry?


The primary purpose of VeChain (VET) in the blockchain industry is to improve supply chain management and business processes through its blockchain-as-a-service platform. It aims to increase transparency, traceability, and efficiency by utilizing distributed ledger technology to authenticate and verify the history of products across the supply chain.




How did VeChain transition from a private consortium chain to a public blockchain?


VeChain transitioned from a private consortium chain to a public blockchain with the launch of its own platform, VeChainThor, in 2018. This move introduced the native VET token, expanded its governance model to include more stakeholders, and opened up the ecosystem to a broader community to increase transparency, security, and scalability.




What are the key industries that VeChain targets with its technology?


VeChain targets several key industries with its blockchain technology, including supply chain management, luxury goods, automotive, retail, pharmaceuticals, logistics, and agriculture. The technology is designed to provide enhanced transparency, traceability, and efficiency for these industries.




Can you explain the dual-token system used by VeChain and its purpose?


VeChain operates with a dual-token system consisting of the VeChain Token (VET) and the VeThor Token (VTHO). VET is the primary token used for value transfer and market speculation, while VTHO represents the underlying cost of using the VeChainThor blockchain and is used to pay for transaction fees and smart contract executions. This dual-token approach separates the cost of using the blockchain from market speculation, stabilizes transaction costs, and ensures that holding VET grants users access to resources on the VeChainThor network.




How does VeChain aim to maintain stable network costs for transactions?


VeChain maintains stable network costs for transactions through the use of a dual-token system consisting of VET and VTHO. VET generates VTHO over time, which is used to pay for transaction costs. By controlling the generation rate of VTHO and having the ability to adjust transaction costs in terms of VTHO, the VeChain Foundation aims to provide a predictable and stable fee system for users.




Who are the co-founders of VeChain and what are their backgrounds?


The co-founders of VeChain are Sunny Lu and Jay Zhang. Sunny Lu has a background in IT and cybersecurity, and was previously the CIO of Louis Vuitton China. Jay Zhang, on the other hand, has a strong experience in finance and risk management, having worked for several international companies before co-founding VeChain.




What makes VeChain's approach to supply chain management unique compared to traditional systems?


VeChain’s approach to supply chain management is unique due to its use of blockchain technology, which ensures greater transparency, security, and traceability. It leverages smart contracts and IoT devices to automate processes and provide real-time, tamper-proof data directly on the blockchain. This enhances the authenticity and quality assurance of products by providing all stakeholders with a unified and immutable record from the point of origin to the end consumer.




How does the VeChain ID system work within the supply chain?


The VeChain ID system, or VeChain Identity (VID), works by assigning a unique identity to products and assets within the supply chain. This identity is then digitized as a VeChain Thor blockchain record. Using smart chips or RFID tags, each product can be tracked throughout its entire lifecycle, ensuring data integrity and authenticity. This allows for transparent interaction and information flow among various stakeholders like manufacturers, supply chain partners, and consumers.




What is the maximum supply of VET tokens, and how many are currently in circulation?


The maximum supply of VeChain (VET) tokens is set at 86,712,634,466 VET.




What consensus mechanism does VeChain use, and why is it considered environmentally friendly?


VeChain uses Proof of Authority (PoA) as its consensus mechanism. PoA is considered environmentally friendly because it does not require the computationally intensive process of mining used in mechanisms like Proof of Work (PoW). Instead, transactions and blocks are validated by approved accounts, known as 'Authority Masternodes', which demand significantly less energy and reduce the overall carbon footprint of the network.




How is the VeChainThor blockchain optimized for business applications?


The VeChainThor blockchain is optimized for business applications through its innovative use of proof-of-authority consensus, which ensures high-speed and low-cost transactions. It also features multi-task transaction capabilities, allowing for batch processing of smart contracts, and integrates with IoT devices for real-world data capture. Additionally, VeChain's governance model is designed for enterprise needs, offering a balance between centralization for efficiency and decentralization for security.




What are the key components of the VeChain ecosystem?


The key components of the VeChain ecosystem include VeChainThor Blockchain, VeChain Token (VET) for value transfer, VeThor Token (VTHO) for smart contract execution, smart contracts, a decentralized governance model, Proof of Authority (PoA) consensus mechanism, Internet of Things (IoT) integration, and a range of decentralized applications (DApps) and services tailored for various industries such as logistics, luxury goods, and agriculture.




How does the VeChain ToolChain benefit enterprise adoption of blockchain technology?


The VeChain ToolChain provides a suite of pre-built applications and turnkey solutions that lower the barrier to entry for enterprises looking to adopt blockchain technology. It streamlines development, allowing for quick integration with existing systems, offers customizable templates tailored to various industries, and provides a secure, scalable platform that facilitates supply chain management, anti-counterfeiting, and product lifecycle management. This comprehensive package enhances business processes, increases transparency and builds trust without the need for deep blockchain expertise.




What is the role of VTHO in the VeChain ecosystem, and how is it generated?


In the VeChain ecosystem, VTHO (VeThor Token) plays the role of a gas token, used to pay for transactions and smart contract operations. VTHO is generated automatically by holding VET (VeChain Tokens), with the generation rate determined by the blockchain protocol. VET holders receive VTHO as a form of reward, incentivizing participation and investment in the network.




What governance model does VeChain employ to secure its network and manage upgrades?


VeChain employs a Proof of Authority (PoA) governance model to secure its network and manage upgrades. This model relies on Authority Masternodes, which are vetted and approved by the VeChain Foundation. The PoA model allows for efficient consensus without sacrificing security, ensuring that only authenticated accounts, known as Authority Masternodes, can validate and produce blocks. This centralized yet broadly supported governance approach aids in streamlining decision-making processes for network upgrades and changes.