VeChain (VET) Cryptocurrency: Comprehensive Overview
Core Technology and Blockchain Architecture
VeChain is a Layer-1 blockchain purpose-built for real-world use cases. Its architecture includes features such as multi-party gas payment (MPP), adjustable gas fees, batched transactions, and deterministic finality to support data integrity. VeChain combines traditional business systems with blockchain technology using several core components. Notably, smart chips, RFID tags, and IoT sensors collect real-time data from physical products and processes.
Unlike typical blockchains that use account-based models, VeChainThor employs an object-oriented model that treats every data point as a "digital asset." This architectural approach makes it particularly suited for supply chain applications where individual items require unique digital representations.
Primary Use Cases and Real-World Applications
VeChain's primary use case is supply chain management. It enables end-to-end visibility, tracking, and verification of products and their associated data. This system is mainly used in the luxury goods sector, which suffers greatly from counterfeiting, by guaranteeing the authenticity of products.
In the agri-food sector, for example, use of the VeChain network ensures that the cold chain is respected throughout the transportation of goods. The Consumer Confidence Index — designed for perishable or extremely delicate products such as food and wine — analyzes a product's logistics, production, sourcing, and consumption. This analysis gives consumers access to important product information such as moisture and toxicity levels, temperature, product weight, harvesting procedures, and product freshness.
In partnership with BMW, VeChain is working on the VerifyCar project, which aims to improve the transparency of used car data. Additionally, VeChain has expanded its reach into other sectors like healthcare, agriculture, and luxury goods, demonstrating its versatility and applicability across diverse industries.
Founding Team, Key Developers, and Project History
VeChain was founded in 2015 by Sunny Lu, former CIO of Louis Vuitton China, and Jay Zhang, former executive at PwC. Before he established VeChain, he co-founded the Chinese Internet start-up which developed Qtum, a very important digital asset in the crypto space.
The team behind VeChain consists of over 90+ employees, most of them being developers. Chief Technology Officer, Gu Jianliang, has over 18 years of experience in areas such as mobile devices and the IoT field, and has created over a 100 patents in several technological fields. Kevin Feng serves as the Chief Operations Officer of the VeChain Foundation. Feng has been actively involved in many technology projects in his 12 years working for VeChain's partner, PWC, as a consultant and assurance advisor.
VeChain began in 2015 as a private consortium chain, working with a host of enterprises to explore applications of blockchain. VeChain would begin their transition to public blockchain in 2017 with the ERC-20 token VEN, before launching a mainnet of their own in 2018 using the ticker VET. In 2017, the project launched an initial coin offering (ICO) that raised approximately $20 million through the sale of VEN tokens, VeChain's original ERC-20 token. These funds were used to build out VeChain's proprietary Layer-1 blockchain, VeChainThor, which launched in 2018.
Tokenomics: Supply, Distribution, and Mechanics
Token Supply and Distribution
VET has a maximum fixed supply of 86,712,634,466 tokens. The total supply of VET is fixed, meaning no new tokens will ever be created. This fixed supply model offers several benefits: Scarcity: Creates a deflationary aspect to the token economics. Predictability: Allows for more accurate long-term economic modeling.
VeChain has a fixed total supply of 86,712,634,466 VETs. This supply was predefined during the Initial Coin Offering (ICO) in 2017. VETs were distributed among ICO participants, the VeChain Foundation, partner companies and the development team.
Dual-Token Economic Model
The platform uses two tokens, VET and VTHO, to manage and create value based on its VeChainThor public blockchain. VET generates VTHO and acts as the store of value and value transfer medium, while VTHO is used to pay for GAS costs, separating the need to expend VET when writing data.
Each VET generates VTHO at a rate of .000432 VTHO per day. VeChain's dual-token model provides a stable business environment where fluctuations in the prices of digital assets won't dramatically effect the cost of using the network, making it the ideal public blockchain for enterprise use.
Inflation and Deflation Mechanics
In the current token model, VTHO is generated uniformly by VET at a rate of 0.000432 per day, regardless of contribution to the network. Exchange wallets, for example, hold large portions of VET, and generate a significant share of VTHO without utilizing it or distributing it to users.
At launch, VTHO inflation will be cut 72.2%. Based on staking projections, the annual value inflation of VeChainThor including VET/VTHO will start from 0.6%, reaching 2.9% if total VET stake reaches to 60 Billion VET (70% of total supply). 100% of VTHO transaction base fees will be burned, which, in combination with lower inflation, accelerates the transition to a deflationary model for VTHO. This mechanic builds on the original tokenomic thesis of VeChainThor, helping develop long-term value for the protocol as a proxy of adoption and transaction volumes.
Consensus Mechanism and Network Security Model
VeChainThor currently operates under a Proof-of-Authority consensus with 101 KYC-verified Authority Masternodes. PoA is a Byzantine Fault Tolerant probabilistic consensus mechanism, based on HotStuff, which relies on Authority Masternodes (AM) associated with verified identities.
To be an Authority Masternode (AM), the individual or entity voluntarily discloses who they are, identity and reputation by extension, to the VeChain Foundation in exchange for the right to validate and produce blocks. Their identity, reputation and financial investment is placed at stake and this acts as an incentive for the AMs to behave correctly and keep the network secure.
The VeChain Foundation announced the successful upgrade of the VeChainThor blockchain to 'Proof of Authority 2.0' (PoA2.0) occurred on the 17th of November at 8:10 GMT (block height 13815000). PoA2.0 is a protocol-level upgrade that introduces finality as well as additional security mechanisms, to VeChainThor. It combines the strengths of Nakamoto and Byzantine Fault Tolerance (BFT) architectures while eliminating their individual weaknesses to solve scalability or data finality problems in the blockchain industry.
High throughput and scalability: Capable of processing more transactions per second than traditional Proof-of-Work systems. Energy efficiency: No mining means minimal power consumption. Enhanced security and finality: Every block is validated by authorized, identity-verified nodes.
Key Partnerships and Ecosystem Integrations
Partnerships with leading companies such as Walmart China, BMW, H&M, and DNV GL have facilitated the integration of VeChain's solutions into their operations. These collaborations have resulted in tangible use cases, including product authentication, quality assurance, and supply chain optimization.
LVMH Moët Hennessy Louis Vuitton, also known as LVMH, is a French multinational luxury goods conglomerate. Some of the famous brands are Dom Pérignon, Dior, Givenchy, Louis Vuitton, Marc Jacobs and TAG Heuer. Vechain is currently working with multiple LVMH brands to integrate blockchain and IOT technology into their projects. One example of this is Givenchy bags equipped with Vechain chips so users can verify if the handbags are genuine or fake.
In 2023, VeChain and Boston Consulting Group established a partnership under a similar premise, but with the goal of delivering a blockchain ecosystem that could solve sustainability challenges and demonstrate real-world adoption of decentralized applications. The platform builds on VeChain's track record of real-world adoption to help deliver blockchain applications that target a broad array of sustainability-focused scenarios, from waste reduction to diet, EV charging, and exercise, as described by the UN's 17 Sustainable Development Goals.
Through this integration, assets will become transferrable between VeChain and over 40 leading blockchains, including Bitcoin, Ethereum, Solana, BNB Chain, Polkadot, and many more. EVM upgrades and JSON RPC implementation, part of the Renaissance roadmap, are well complemented by the Wanchain integration, significantly expanding opportunities for VeChain's ecosystem. This powerful combination creates seamless interoperability between VeChain and the broader blockchain world, enabling frictionless asset transfers and cross-chain growth and development.
UFC, the world's leading mixed martial arts organization, is proud to announce a strategic upgrade to its global marketing partnership with VeChain, a leading enterprise-grade blockchain, as the pair join forces to advance the VeBetter ecosystem – a blockchain application platform running on the VeChainThor blockchain. VeChain's VeBetter ecosystem uses decentralized applications (dApps) to incentivize sustainable actions, rewarding users with B3TR tokens for their activities. By recording, or 'tokenizing' sustainable actions on blockchain, VeChain helps create economic value that would have otherwise gone unrealized and lays technological foundations for a more circular economy.
Competitive Advantages and Unique Value Proposition
VeChain represents a unique approach to blockchain technology, positioning itself as an enterprise-focused platform that bridges the gap between traditional business operations and decentralised innovation. Unlike cryptocurrencies designed primarily for financial transactions, VeChain operates with a dual-token model specifically engineered to solve real-world business challenges, particularly in supply chain transparency and process improvement.
Unlike Ethereum, VeChain prioritizes enterprise adoption. It offers predictable transaction costs, faster finality, and built-in governance mechanisms. It's designed for stability rather than open-ended experimentation.
VeChain is also popular for its unique fee delegation protocol feature. This Blockchain supply chain software uses smart contracts and the gas accounts of the user in order to manage the gas usage required to handle the network. This feature enables a company to use the services and tools on Vechain and simply pay for the data they use.
Enterprise Scalability: High throughput, low latency design. Predictable Fees: Controlled via VTHO generation. Traceability & Transparency: Real-time tracking across the supply chain. Regulatory Alignment: Validator KYC ensures compliance. Eco-Friendly: PoA model consumes minimal energy compared to PoW systems.
Current Development Activity and Roadmap Highlights
As of June 2025, the VeChain Foundation is approaching the second phase of its new technical roadmap, known as the VeChain Renaissance. This phase includes transitioning its consensus mechanism, introducing a new staking model, modifying its two-token economic structure, and adopting JSON RPC to improve interoperability. The Foundation is also adapting to regulatory developments, having established MiCAR compliance in early 2025 to support token use across the European Union.
As part of its 'VeChain Renaissance' roadmap, the network is moving to a Weighted Delegated Proof-of-Stake model in December 2025.
The new VTHO distribution model sees network rewards go to groups who actively support the VeChain ecosystem: Validators: The Validators of VeChain are responsible for block production, securing the network, validating transactions, and upgrading the protocol. Validators will earn rewards for successfully mining blocks. X-Nodes and Economic Nodes: X/Economic Nodes are the backbone of governance and economic stability on VeChainThor, earning VTHO for being active ecosystem participants. Builders: Developers will benefit from a new VTHO-based fund, providing benefits such as fee delegation (gas-free transactions) to support app development, user growth, and more.
Validator Delegation: PoA3.0 introduces the ability for X/Economic Nodes to delegate collateral to one of the 101 Validator Nodes. In doing so, X/Economic Nodes can play an active role in block production, network decentralization and VeChainThor's economic security, earning additional incentives for doing so.
VeChain's adoption strategy focuses on VeBetter, a user-oriented platform developed with Boston Consulting Group. VeBetter enables token-based activity tracking and rewards.
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