- Vechain: Why VET Smashing It & What Next?
CRYPTO PROJECT RESEARCHES
Vechain performs unique efforts in a strong competitive market and will be one of the top projects of 2021.
In late March, a container ship called Ever Green got stuck In the Suez Canal. This wouldn’t have been such a big deal if it were not for the fact that. This waterway is responsible for about 12% of all global trade.
The Six-Day blockage cost the global economy nearly 60 billion dollars and revealed to the entire world just how fragile existing supply chains are. This is a problem that supply chain cryptocurrencies are hoping to fix and the current leader in this nation is none other than VeChain.
Over the past few months, VeChain has secured numerous partnerships, which could make it a cornerstone of future supply chain solutions. This has sent the VET coin rising up the ranks along with VeChain’s VTHO utility token.
Can VeChain keep up this impressive momentum or will it get crushed by its supply chain competitors? All this and more in today’s episode of the saleswallet.
Website: https://www.vechain.com/ & https://www.vechain.org/
If VeChain is a void in your vernacular, here’s a short summary VeChain was founded in 2015 by electrical engineer Sunny Lu.
Sunny is the former chief information officer of Luis Vuitton China and has almost 20 years of experience working in supply chain infrastructure.
The VeChain ICO took place in August 2017 and brought in about 20 million dollars. The VeChain Thor blockchain went live in June 2018 and its Genesis block contained a message which read quote salute and respect Ethereum. This is because the VeChain blockchain is based on Ethereum, but has been optimized for performance like many other enterprise blockchains.
VeChain’s specialty is supply chain management, and it combines blockchain with NFC, RFID, and QR Code technologies to track luxury goods, food, pharmaceuticals, and much more. This requires a lot of throughputs which is why VeChain uses a Proof of Stake (PoS) consensus algorithm called Proof of Authority (PoA) that allows it to process up to 10,000 transactions per second.
There is a limit of 101 proof of authority nodes on the VeChain blockchain, and these are the only nodes on the network that are allowed to process transactions. All proof of authority nodes must provide KYC documentation and stake a minimum of 25 million VET.
Whether a prospective authority node makes the cut ultimately depends on the VeChain Foundation which handpicks all authority nodes. In contrast to most proof of stake blockchains, the amount of VET being staked by a proof of authority node has no influence on its likelihood of getting chosen to produce a block.
Instead of issuing new VET coins for each block, VeChain blocks mint VTHO tokens which are then given to all staking participants on the network. This includes economic nodes and X nodes that do not participate in consensus but have significant voting power via their VET.
VTHO tokens are then used to pay for all transaction fees on the VeChain, and these fees can be delegated to third parties to facilitate enterprise use cases and work around crypto custody restrictions.
With a consenting vote of VET holders, VeChain Foundation periodically adjusts VTHO tokens to ensure transaction fees on the network remain stable in dollar terms.
Because VeChain is smart contract compatible, it is possible to create decentralized applications and even new tokens on its blockchain. However, whether these DApps or tokens added to the VeChain blockchain is decided by VET holders and the VeChain Foundation.
10 tokens have made the cut so far, as well as 17 DApps according to DApp radar. VeChain DApps are accessible via the sink desktop wallet, which functions as a one-stop-shop for everything VeChain. Resource: https://www.coingecko.com/en/coins/vechain
VeChain has made significant strides in development and secured some prolific partnerships since last summer.
In August last year, VeChain announced the release of food-oriented supply chain solutions on the VeChain toolchain. It’s blockchain as a service platform.
This makes it possible for businesses in the food industry to deploy decentralized applications to track their produce and products using pre-made templates specific to their industry.
VeChain also partnered with Travala.com to make it possible to pay for vacations using VET.
In September, VeChain joined the Chinese Animal Health and Food Safety Alliance which includes the Chinese branches of McDonald’s, Starbucks, and Walmart.
VeChain has already convinced one of the members of the alliance to use the VeChain toolchain, though I wasn’t able to find any information about which company it was specifically.
In November, it was revealed the top-ranking officials in China’s Hubei Province had sat down with the VeChain team and a risk management firm to discuss tracking and tracing related to the pandemic.
In December, the South Cyprus arm of international business consulting giant Grant Thornton secured a spot as one of VeChain 101 or authority nodes. The director of Grant Thornton South Cyprus said that the company intends to help its clients use the chains blockchain technologies.
In January this year, hospitals in South Cyprus began storing vaccination records on the E-HCert App, which is powered by the VeChain blockchain.
That same month, VeChain released the second version of its Sync Wallet terminal (Sync 2) making it possible to delegate any fees related to DApps on the VeChain blockchain.
Last month, the VeChain Foundation initiated a vote to reduce the base transaction fee paid in VTHO, which has increased by more than 20x since the start of the year due to VTHO’s impressive price action.
Just last week, salesforce is director Daniel Nortje tested VeChain’s toolchain and noted it as his favorite blockchain solution due to simplicity.
Although a concrete salesforce partnership has yet to materialize this barrage of bullish news has sent VET and VTHO on a collision course with the moon.
VET Price Analysis
VET has gone up by about 10x since the start of the year, which is impressive given its relatively large market cap. What’s even more impressive is the accompanying surge in trading volume that has supported this parabolic run.
Now to be completely honest, I can’t point to a single factor that could be fueling VET’s price action. Besides staking and governance, VET has no other demand drivers. However, it is very possible that the price action of VTHO could be motivating more economic nodes to join the network. This is because VET staking can be a solid source of passive income. Putting down the 50 million VET, you need to run a Mjolnir tier economic node would give you about $100 of passive daily income.
15 million VET works out to nearly and a half million dollars, which is a pretty penny but might be worth the price when you consider that VET has also been going up over time. In other words, you’re making passive income while hodling a coin that is increasing in value, a win-win.
This leads to a positive feedback loop where economic nodes purchased tens of millions of VET thereby pushing up the price of VET which motivates even more economic nodes to come on, board, and so on.
The best thing about VET that it has a fixed supply of 86.7% billion and all the VET allocated to private investors and the team has already been invested. About half of this supply is in circulation with the remainder being staked.
VET supply also seems to be quite equitably distributed save for a few whale wallets which are noted as belonging to exchanges such as Binance. These robust tokenomics lead me to believe that VET could make it to a dollar by the end of this bull market, but we will probably see another correction and some consolidation before then.
VTHO Price Analysis
Speaking of consolidation this seems to be exactly what the VTHO token is doing. VTHO has gone up by more than 50x since the start of the year, and this is an extremely bullish indicator for VeChain as a whole. This is because VTHO is used as gas on the VeChain blockchain.
If VTHO is pumping this means that individuals and institutions are actually using VeChain. Either that or there is a whale with very deep pockets, who are buying up all the VTHO which doesn’t seem to be the case according to the VTHO rich list.
While VTHO has a much smaller market cap than VET, I think it might have a harder time moving up the ranks after its recent pump. This is because VTHO has no maximum supply and there is a constant wall of cell pressure coming from the VeChain nodes who are earning VTHO as staking rewards and selling them for profit.
These nodes may be hodling for the time being because of VTHO’s price action, but this could change very quickly if a psychological target is met or the price starts to fall. On that note, my technical analysis tells me we might be on the verge of a brick breakout for VTHO. I can’t say for certain because what I see is a symmetrical triangle that can break to the downside or the upside. If it breaks to the upside, we could see VTHO go as high as 3 cents which would be 2x from its current price at the time of the shooting. Conversely, a break to the downside was a serious fall back to a strong zone of around the half-cent mark the previously served as resistance in February and March.
The fact that this symmetrical triangle is still pronounced on the weekly timeframe means it’s a bit of a coin flip. Normally, you’d be able to guess the direction based on the long-term trend.
Since altcoins follow Bitcoin my bet is that VTHO will break to the upside if BTC spikes or trades sideways and will probably crash if BTC fails to hold its current price.
While VeChain doesn’t have a clearly defined roadmap recent interviews with found Sunny Lu offer a few clues about what’s in the works. For starters, VeChain is looking to diversify its utility beyond supply chains and experiment with crypto-specific niches like NFTs and DeFi.
Sunny recently said that VeChains NFT interest date back to 2018 though It wasn’t until September last year that VeChain started to shout these interests from the rooftops.
Besides cashing in on the NFT crazy chain ones NFTs also become a more active part of its supply chain solutions. In terms of adoption, VeChain hopes that its blockchain will be processing at least 1 million transactions per day at the end of the year.
The VeChain blockchain has been processing an average of about 90,000 transactions per day as of late most of which are apparently coming from smart contract use including the VeChain toolchain.
The VeChain Foundation is also working on the finishing touches to the Proof of Authority 2.0 upgrade which should be going live in the next few weeks.
Without getting too technical POA 2.0 will increase fee change tps (transaction per second) and make it impossible for its blockchain to fork. This will add a critical degree of network security that usually keeps enterprise players at bay.
To top it all off Sunny hinted in a recent interview that the VeChain Foundation is in talks with Coinbase, as well as a handful of other large US exchanges to list the VET coin. However, despite what VET and VTHO’s price action would have you believe VeChain has actually been struggling behind the scenes.
VeChain Adoption Difficulties
According to founder Sunny Lu VeChain has been hit hard by the current pandemic. Now, although you would think that disruptions the pandemic is caused to supply chains would leave companies scrambling for solutions like VeChain Sunny says that the opposite is happening.
Rather than try out new technologies companies around the world are taking a more conservative approach to how they do business. Big brand names like Walmart are opting to go with legacy supply chain solutions from the likes of IBM instead of cryptocurrency blockchains.
What’s worse is that the restrictions on travel have made it harder for the VeChain team to fly around and demo products like the VeChain toolchain to prospective clients. This is obviously much harder to do from a distance, especially when many businesses are unwilling to take risks with their already dwindling revenues.
Even though VeChain has a strong presence in China, it seems to be having some issues with adoption there as well. This is because cryptocurrencies are subject to strict regulations in China, which makes it very hard for companies to comfortably hold cryptocurrencies there. This poses a huge problem for VeChain because the VTHO token is required to pay for all transactions made on its blockchain.
While there is a workaround using cryptocurrency custodians this adds yet another layer of complexity to a technology that is already hard for the average corporate CEO to digest.
All the VeChain is having a difficult time making headway in western markets because of its close ties to the Chinese government. Now, this all sounds pretty dismal but there seems to be light at the end of the tunnel for VeChain.
Institutional adoption of cryptocurrencies is growing across the globe, even in China. Look no further than the news that a Chinese tech company called Meitu added Bitcoin and Ethereum to its balance sheets.
The pandemic also seems to be coming to a close and many economists are predicting a powerful economic recovery. This newfound stability will hopefully help corporations cozy up to the idea of cryptocurrency-powered technologies such as the VeChains toolchain.
Considering how much VeChain has accomplished despite these setbacks, I think summer is going to be a seriously promising season for VET, VTHO, and the entire VeChain ecosystem.
VeChain is one of the few enterprise-oriented cryptocurrencies that I’m a fan of. It has managed to seduce both individuals and institutions to help build its dream of a truly transparent economy.
I for one am always wondering what exactly is in the food I eat or the articles of clothing that I wear. VeChain has tasked itself with making this possible and seems to be getting closer to that goal every day. This isn’t to say that VeChain hasn’t had its fair share of setbacks though. I remember the hack of a VeChains Foundation wallet in December 2019, like it was yesterday, and I still can’t shake the age-old notion that its partnerships are a bit exaggerated.
Every cryptocurrency project is guilty of this to some extent but I must admit the VeChains founder Sunny Lu has a way of taking this to the next level. Any direct questions related to things like the nature of VeChains partnerships, how many transactions are coming from its partners, and even critical things like privacy are often met with extremely vague answers from Sunny.
Now to be fair, Sunny has gotten in trouble in the past for accidentally revealing partnerships before they were made public. Moreover, VeChain has had the tough task of balancing the wants and needs of VET holders is the institutional clientele, and the Chinese government. This is no easy feat and the fact that VeChain has continued to grow even with these hurdles is seriously impressive. However, there’s no question that VeChain has yet to gain a significant foothold in the supply chain industry, and it’s not just because of competition from IBM or scrutiny from the Chinese government.
Other Enterprise cryptocurrency blockchains, like Hedera Hashgraph (HBAR), have been gaining ground in the western supply chain management market. Even though VeChain is by all accounts a superior project. It also concerns me that VeChain is starting to try its luck in crypto niches that it isn’t designed to address. NFTs and DeFi are great, but VeChains move towards these markets makes me worried that they might be getting desperate for adoption.
Luckily for VeChain, they have no shortage of believers backing them and I consider myself to be part of that group. Plus, there’s no arguing with positive price action and both VET and VTHO have had no shortage of that.
This content created by converting from Coin Bureau’s “Vechain: Why VET is SMASHING IT & What Next?” video after asking for sharing permissions. You may reach the original video via the link.
Join Coinmonks Telegram group and learn about crypto trading and investing
- Date of publication:
- Wed, 04/21/2021 - 09:12
Click on the link - it will be copied to clipboard