VeChain was founded by Sunny Lu, the former CIO of Louis Vuitton in China.
Its initial goal was to establish product traceability using Blockchain technology.
Today, the company hopes to take a new step by being the first to put dedicated business applications on a public Blockchain.
And it was Saturday at midnight that the first block VeChain was undermined, hoping to convince companies to adopt the code related to a cryptocurrency negotiated on a public market.
For the initiators of the project, VeChain tries to overcome the problems related to public Blockchain such as Bitcoin or Ethereum. But she also wants to supplant solutions like Hyperledger for business platforms.
Sunny Lu explains:
“Right now, if we look at all existing public blockchains, there is a common business model that comes from bitcoin and tries to motivate more people to join the network. The cost of using public blockchains is directly related to the evaluation of the blockchain token. “
He adds :
“It generates somehow a typical paradox that is, the more the token has utility, the more the use cases are numerous, the higher the valuation of the token is high. It also means a higher cost to use the blockchain, which means that no one will use it anymore, if the cost is too high. “
That’s why VeChain has created a dual token system.
In this system VET works as a stock value, while VeThor represents the cost of using the Blockchain.
It should be noted that VeChain is not the only one to use this double token system: Neo and Ontology have also developed twin chips.
But the particularity of VeChain is that it focuses on software that must reduce the cost and development time.
“All public blockchains running in full decentralization mode are like naked blockchains for most businesses, because it’s just open source for basic codes, and if you want to build an application, you have to do everything by yourself – even from nothing. “That’s what Lu still explains.
Large companies follow VeChain
But VeChain is not content with projects. It already has the support of large companies. Thus, it has several important partnerships with BMW and Renault, as well as with the global insurance company DNV GL.
The latter even assumes a technical role in the development of the project.
In particular the PoA system, “proof of authority”, which offers companies a
“Balance between decentralization and centralization” according to Lu.
Other companies like EOS and Tron have also experimented with new governance models. In these new templates, users are members of the community and can use their tokens to elect delegates who validate the blocks.
Thus, the decentralized part is that the owners of tokens can vote according to the number of VET they own. Among these owners, a company like DNV GL can also run nodes by meeting certain criteria.
“Each node will have specifications not only about the hardware, but also about the security level and process, managing your nodes and your contribution to the VeChain community,” explained Lu.
All voters use their “voting authority” to influence Blockchain decisions and elect committee leaders. This is the centralized part, that is, the governing body of the VeChain Foundation.
“These seven committee seats, we will execute all decisions from the voting process, including even, who will be next in the steering committee. By doing this, you maintain the advertising or transparency of a decentralized part while maintaining the effectiveness of a centralized part. Explained Lu.
Is the centralized part of VeChain technology a problem for companies?
It is true that some have criticized these PoAne DPoS systems. But, unlike individuals, companies do not seem frightened by these problems of centralization.
For example, the Vice President of Digital Transformation at DNV GL, Renato Grottola, explained that the VeChain governance model represents: “An optimal balance between centralization and decentralization, reducing the uncertainty of future developments. “
For some, this allows companies to stop worrying about basic protocols that are ready for use and to focus more on the products to be developed.
This is what Grottola adds: “VeChain was conceived as a platform; it combines blockchain technology with IoT and AI, providing the opportunity to develop supply chain solutions at the product / asset and enterprise levels. “
A smooth launch for VeThor chips
Despite Saturday’s launch of VeThor tokens, the Blockchain will not be fully operational. To do this, VeChain has yet to move his chips from the Ethereum chain to his main network. This stage will take place in July.
But this process of transferring large sums of virtual currencies is not without risks.
Lu already announced: “people will try to attack.”
This is why VeChain has used several cybersecurity companies to test their code.
Similarly, a dedicated team will monitor the entire launch to address the issues.
This is a smooth launch and the protagonists are optimistic. Grottola added: “This is a normal practice in business, [but] not so common for crypto startups. This type of structured approach has been one of the key criteria for choosing the VeChain initiative from other competing platforms. “
He is not alone in being confident. The vice president of business development for the gaming platform, Decent Bet, also plans to use VeChain technology. In this regard he said: “We are realistic. We know that the next “perfect” product launch will be the first “perfect” product launch. There are always bugs to fix here and there. “
At the time of writing, July 1, VEChain has a market capitalization of $ 1.444 billion and traded at $ 2.62.