- VeChain has two token systems and each token has different functions on the blockchain.
- Major companies in the sector have partnered with VeChain for its unique blockchain technology.
It is a blockchain platform designed to enhance supply chain management and processes of businesses. Its aim is to bring distributed ledger technology into the mainstream of complex supply chains.
The platform contains two tokens: VeChain (VTH) and VeChainThor Energy (VTHO). The former token is used to transfer value across the VeChain network and the latter is used as energy or “gas,” to power smart contract transactions.
VeChain established two token systems for effective governance and to have a predictable economic model for decentralised application developers.
Understanding VeChain
VeChain’s motto is to build a trust free and distributed business ecosystem platform that will perform transparent information flow, efficient collaboration and high-speed value transfer.
Supply Chain data is currently compartmentalised in silos among multiple stakeholders. VeChain is trying to solve the problem of asymmetric information and empowering the owner, and allowing ownership of data. VeChain claims that it provides a 360-degree view of information and processes linked to business, such as transportation, storage, and supply, for authorised stakeholders and higher market transparency.
Examples of VeChain
The platform can be used for tracking quality, storage temperature, transportation medium and last mile delivery of a medicine pack or an alcohol bottle right from its beginning in manufacturing to its end utilisation, end customer.
For executing such tasks, VeChain uses smart chips, radio frequency identification (RFID) tokens and sensors that broadcast information on the blockchain to authorised stakeholders who have access to it.
The use of sensors ensures that all the parameters related to the product are constantly monitored and if there is any problem, it is reported back to the relevant stakeholders. It informs the manufacturer and customer that if any drug packet is stored outside the prescribed temperature range, it provides manufacturing unit feedback on service improvement and quality control.
Origin of VeChain
VeChain was founded by Sunny Lu in 2015. He was the chief information officer at Louis Vuitton China. VeChain was started as a subsidy of Bitse, it is one of the biggest blockchain companies in China and has a substantial customer base among the established companies.
Initially, the VEN token used to function on the Ethereum blockchain. But in 2018, it rebranded itself and transitioned to its own blockchain. As a part of the rebrand, the VEN blockchain transformed itself into the VeChainThor (VET) blockchain.
VeChain has over the years, partnered with various companies in order to achieve its target of actionable data and transparency. It has collaborated with PwC, Viseo, Microsoft and Renault.
Governance Protocol
VeChain uses a proof-of-authority consensus protocol. There are 101 validators who confirm transactions on the VeChain blockchain. To become an authority master node, one has to disclose their identity, it is an essential pre-requisite, anonymous nodes are not allowed on the platform.
VeChain claims that it consumes less energy as it does not require a minimum number of validators to reach consensus. The other type of master node is an economic master node. These are used as checks on power and do not produce block or ledger records.
Conclusion
VeChain’s blockchain technology and unique token systems have positioned it as a game-changer for supply chain businesses. Its aim is to enhance supply chain management, provide transparent information flow, and empower stakeholders by allowing ownership of data.
Through its partnerships and innovative use of smart chips and sensors, VeChain offers real-world applications, such as tracking product quality and ensuring compliance throughout the supply chain. The platform’s proof-of-authority consensus protocol and efficient governance add to its appeal for businesses seeking actionable data and higher market transparency.
