VeChain (VET): supply chains on blockchain
VeChain provides tools for managing logistical steps, supply chains, quality control, and monitoring the stock in warehouses.
The project started in 2015, with the leading network launched in 2018. Since then, the platform has advanced a lot and attracted a lot of partners who saw it as an opportunity to increase the efficiency and transparency of their business.
Technical features
VeChain develops systems that track goods, including luxury goods. Tracking takes place from the moment of production to purchase by the end customer, allowing the authenticity of goods to be confirmed at any time. Vichain also provides tools to improve the security of digital solutions and track various production parameters, for example, carbon emissions.
The basic principles of the blockchain platform:
- The Proof-of-Authority (PoA) consensus model requires nodes to be authorized before they can participate in transaction confirmation. Once a node becomes authorized, it joins a pool of other official nodes, and all of them have the same chance to generate new blocks and receive rewards.
- With all the advantages of PoA, this consensus method implies that it is impossible to prohibit a node from manipulating the system once it becomes authorized to generate a new block. To combat this, the blockchain monitors nodes' misconduct and subsequently takes action against them.
- VeChain Foundation launched the next generation of this mechanism, PoA 2.0, in November 2021. The new version has improved stability and security and expanded the range of business use cases.
- The update has also played a role in improving the scalability of the VeChain network and speeding up and validating transactions. Byzantine Fault Tolerance (BFT), one of the best features of proof-of-work (PoW) consensus mechanisms, has been added.
The number of VeChain partners is already measured in the dozens and growing. To name just a few: Walmart China, Australian wine producer Penfold's, NTT Docomo, and many new previously unknown startups. The company operates on a Blockchain-as-a-Service model, making connecting new customers seamless.
VET token
The VET cryptocurrency is used to transfer value through the VeChain network. It is a popular and actively traded coin ranked 39th by market capitalization as of the end of 2023. The currency has practical applications in the VeChain ecosystem.
The project uses a two-token economic model. The VET token is suitable for blockchain management and trading operations. Still, it also plays an important role in supporting the network with Proof-of-Stake (or rather, its variation Proof of Authority) and generating other tokens — VTHO.
VTHO tokens pay for network transactions (like gas in Ethereum). VTHO can also be purchased on exchanges or generated in a wallet by simply storing VET. Using such a dual system separates network fees from the potential volatility of the VET token. This increases stability and makes the blockchain more suitable for businesses.
Finally, VET is also used to run and maintain steaking nodes on the network.
Conclusion
VeChain has evolved since its ICO into a strong, robust ecosystem used by many corporate partners and customers to solve complex technical and logistical challenges. VeChain is also working with academic partners to further develop the technology side.
The platform makes it possible to create decentralized applications with extensive functionality: multitasking transactions, managed transaction lifecycle, and so on. This demand ensures, although not rapid, stable growth of the cryptocurrency exchange rate.
