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VeChain Price Analysis 2022 | VET Potential

Image by sanjay k j from Pixabay 

Supply Chains have been strained since the start of the pandemic and the recent conflict between Russia and Ukraine could bring them to the brink of breaking point. Against this backdrop, supply chain solutions have become more important than ever. And when it comes to cryptocurrency, the top supply chain crypto project is none other than vchain. Today I'm going to briefly explain what VeChain is, bring you up to speed on some of the projects most important updates, and see whether VET and Vitho are about to go vertical.I need to give you a disclaimer before I talk about VeChain. I am not a financial advisor , I'm just an educator and this blog post is written with the sole purpose of providing you factual information. Please contact a financial advisor if your portfolio has been killed. If you're new here, you might be feeling a little bit lost right  My name is "MrCrypt "and I am your crypto geek here at the cryptolibrarynow . I pass on the knowledge of cryptocurrencies, exchanges, DeFi, protocols, NFT'S and market analysis are just a few of the topics I tackle on the daily basis. Now enough with the intro. Let's get it on , Let's unpack "What's Up" with VeChain....

What is VeChain?

If you're not very familiar with VeChain, here's a quick rundown. Vechain was founded in 2015 by electrical engineer at Sunny Lu. Vechain was created by Vechain Tech, a software company based in China. Vchain's development is coordinated by the VeChain Foundation, a nonprofit based in Singapore. Vchain raised $20 million in a 2017 ICO and its main net went live in the summer of 2018. Vechain's blockchain is called Vechain Thor, and it's actually a modified fork of Ethereum's blockchain that's been optimized for supply chain solutions. In contrast to Ethereum Vechain doesn't use proof of work or proof of stake. Instead, it uses a consensus algorithm called proof of authority, whose creation is credited to Ethereum cofounder and Polkadot founder Gavin Wood. Rather than computing power or stake, proof of authority chooses which network participant produces a block based on reputation. Now, Vechain currently has 101 authority nodes which process all transactions on its blockchain, and any perspective authority nodes must apply with and be approved by the VeChain Foundation. In addition, authority nodes must take a minimum of 25 million vet, which is used for staking and governance. Vet has a maximum supply of 86.7 billion, all of which has technically vested. In exchange for staking, vet, and processing transactions, authority nodes earn vtho, which is used to pay for transaction fees on Ve- chain. Vtho has no maximum supply. Its inflation schedule is periodically adjusted by the VeChain Foundation with the consent of stakeholders, and 70% of any vtho used to pay for transaction fees is burned. To ensure that Vechain isn't too centralized, most of the voting power for any changes to Vechain are held by economic nodes and X nodes which do not process transactions but can also earn vtho for staking vet. Now this somewhat centralized setup allows Vechain to process around 10,000 transactions per second, which is not too shabby at all. I will quickly note that this impressive statistic doesn't apply to smart contract transactions, since Vchain leverages the Ethereum virtual machine, whose TPS is capped at around 300. Vechain currently has around 70 decentralized applications which can be accessed via the VeChain Sync desktop wallet. To ensure that the Vechain Thor blockchain doesn't get too bloated, all decentralized applications and tokens are approved by vet holders and the VeChain Foundation. Minimal bloat is important because vechain has more of an institutional orientation where performance is paramount. Whereas retail users interact with Vechain via Vechain sync, institutional users interact with Vechain via the Vechain tool chain. Vechain has secured multiple institutional partnerships, mostly with Chinese subsidiaries of multinational corporations, including retail giant Wal-Mart, pharmaceutical giant Bayer, BIG4 accounting firm Pricewaterhouse-Coopers and, of course, the Chinese government.

VeChain Update1 -:

Last April, the VeChain Foundation launched a $1,000,000 grant program to encourage the adoption of Vchain's enterprise NFTS, or EFTS for short. In June, Vechain partnered with a Chinese hospital to track the process of Invitro Fertilizations . In July, Vechain partnered with the Republic of San Marino for a similarly spooky purpose, and that was for a block chain based pandemic health passport using Vechain's enft's. Interestingly, Sunny Lu explained in a presentation that Vechain's pandemic health passports actually offer way more privacy than the ones being pushed by European governments. Which he claims are violating European data protection laws and are using the pandemic as their justification for doing so. In August, Vchain released a tool to help Chinese companies track their carbon emissions in accordance with China's goal to become carbon neutral by 2060. In September, the Chinese arm of Price-water-house Coopers revealed a tool called Air Trace, which uses vechain Thor to track air quality in Chinese cities. A report released in September also found that Vechain Thor is one of the most eco friendly cryptocurrency blockchains on the market, though it didn't show how vchain stacks up against other cryptos. In November, the Vechain Foundation accelerated the project's pivot to sustainable development by hiring a former CTO of Big four accounting firm Deloitte to head its new division that's focused on achieving the United Nations Sustainable Development Goals. Vechain also completed its highly anticipated proof of Authority 2.0 upgrade, and it consisted of three major components. First, it introduced verifiable randomness as part of the process to select which authority node produces a block. Secondly, it modified the block producing process to make it next to impossible for Vchain Thor to fork. And thirdly, it's speed up block finality on Vechain Thor, which apparently increased its transactions per second, though I couldn't find an updated TPS figure.

VeChain Update2 -:

Anyways, as a cherry on top, the first decentralized exchange deployed on Vechain in November, and it currently has around $20 million in total value locked. That's not much, but remember that Vechain's focus isn't Defi. In December, Vechain partnered with the Government of Inner Mongolia to track and trace agricultural products. In January this year, Vchain launched the VUSD stable coin in conjunction with a regulated fintech startup based in the United States called stably. Now if that didn't give it away, the VUSD is a centralized stable coin like circles usdc or paxos's USDP. Meaning every VUSD in circulation is backed by U.S. dollars sitting in a bank associated with stability. Grayscale also revealed that it was considering creating trusts for 25 cryptocurrencies, including VET. This suggests that there may be strong institutional demand for VET in the United States. In February, the Vechain Foundation set up a new headquarters in the Republic of San Marino and will work with the government there to achieve its mission of making San Marino the first carbon neutral country in conjunction with the UN's Sustainable Development Goals. More about that later. Shortly afterwards, Vchain revealed an upcoming platform called V Carbon, which will make it possible to track both individual and institutional carbon emissions, and will eventually allow for carbon emissions and trading. As far as I understand, V carbon has yet to be released. In March, the minting portal for Vechain V USD stable Coin was opened to the public, making it possible for anyone to mint or redeem the USD with actual USD. According to Vechain stats, about 5,000,000 VUSD have been minted so far, which is not bad for one month. This might have to do with all the minting incentives offered by the VeChain Foundation. Billionaire venture capitalist Tim Draper also partnered with Vechain to launch the Vchain web three accelerator program in association with Draper University, Tim's educational enterprise. Fun fact, Tim is actually one of the richest crypto holders out there, and he owes much of his early success to investing aggressively in the Chinese stock market when it was first getting off the ground.

VET Price Analysis -:

Anyhow, as amazing as all Vechains developments, updates, announcements, and partnerships have been, vet has been having a hard time as far as price goes. This is for a few reasons. For starters, BTC is still recovering from its November crash and as an altcoin vet is highly correlated to BTC. For what it's worth, vet is in roughly the same territory as most other alt coins for the time being. While it's certainly nice to see that vet is in a long term uptrend, it looks like vet has been setting lower highs since the crypto crash last May. This might have to do with the fact that the May crash was caused by China's crackdown on crypto mining and China's clampdown on the industry has only accelerated since then. This is bad news for Vechain because China is where the project has secured most of its partnerships, and it's also where the software company behind Vechain is based. The good news is that Vechain seems to be expanding its presence outside of China, the VeChain Foundation's new European headquarters and the V USD stable coin supports this idea. The bad news is that vechain's adoption doesn't exactly translate to increased demand for that, because it's only used for staking and governance. Of these two fundamental demand drivers, staking is probably the most dominant and the bad news there is that the minimum stake to become an economic node or X node that earns a meaningful amount of vtho isn't all that affordable for the average person. The good news is that vet staking can be done through select third party wallets and exchanges. But the bad news there is that vet staking rewards through third party wallets and exchanges are low, with Exodus only offering around 1% per year. Still better than a bank, though that hardly says much. This leaves speculation as the only other demand driver for VET, and I suspect most of this speculation comes from vet's, low price tag, and the belief that there's big money to be made if it reaches a dollar. The issue with this angle is that that has very limited exchange support in the United States and this means it doesn't get nearly as much exposure as other low price tag cryptos. As I've mentioned many times before, it's not the price tag that matters, but the market cap and the good news there is that vet has a medium size market cap. The bad news is that vets actual market cap is probably much larger since vets entire supply technically finished vesting in the summer of 2019, the good news is that the VeChain Foundation team and select investors haven't sold nearly as much as you'd think. But that might be because vet's price isn't that far off from its ICO price. Unfortunately, there's bad news there too. That's because vets circulating supply has increased by almost 2 billion over the last year, which is still big bucks if you do the maths and assume that additional supply was sold, and vchain's aggressive expansion suggests it was. the good news is that coin gecko suggests that vet's supply hasn't increased at all over the last year but i have a feeling that any vechain node operating in china were forced to sell their vet because of the government's crackdown on the industry.

VTHO Price Analysis -:

It's a similar story for VeChains vtho which seems to be in less of a long term uptrend and has likewise been setting lower highs over the last year. As I mentioned earlier, VTHO is used to pay for transaction fees on Vechain and 70% of transaction fees on Vechain are burnt . Vechain stats suggest Vechain is seeing about half as many daily transactions as it was a year ago. The charts page on Vechain stats was actually down during my research so I couldn't get the full picture, but I did manage to find another website called SeeVChain which gives a detailed history and breakdown of Vtho burns over the last year. Click here to visit that site  if you're interested. As you can see, Vtho burns have been on a steady decline and this means the transactions on Vechain Thor have been on the decline, though there do seem to be some early signs of a recovery. The bad news is that more than half of the demand for Vechain Thor seems to be coming from Walmart China and this demand isn't all that high either. It's only about a few hundread dollars per day. The worst news is Vito's circulating supply has increased by almost 30% over the last year and it's reasonable to assume that most of this supply was sold since its how Vechain nodes make their money. To make matters even worse, the change in vitho circulating supply is the same on both coin market cap and coin gecko. This could mean that Coingecko's account of Vechains tokenomics is more accurate than coin market caps, and that means Vet supply has in fact increased by around 2 billion. There is a silver lining to Vitho's current state, however, and that's that it has a relatively small market cap. Not only that, but Vito has a very low price tag too, which makes it catnip for many speculative retail investors. As a matter of fact, Vitho has the second lowest price tag of any crypto listed on Binance US, which is the only. US exchange that currently supports it and VET. The crypto with the lowest price tag on Binance US is none other than Shiba Inu. But I have a feeling that lots of retail investors got bitten by that dog during the last run. That means it's quite possible that vitho will start to pump 4 purely speculative reasons when the retail hype returns. But be warned. That there will probably be a lot of selling from Vechain nodes.

VeChain Roadmap -:

Anyhow, whether vet and Vtho can reverse their downward trends ultimately depends on Vechain's upcoming milestones. Although Vechain doesn't have an official road map, upcoming milestones can be found in interviews by and presentations with the Vechain team, primarily Vechain founder Sunny Lu. In a Reddit AMA last April, sunny specified that Vechain is looking to secure more institutional partnerships in Western countries, and so far, this seems to be going according to plan. In a video celebrating Vchain's third anniversary last June, Vchain's developer said that they're working to address transaction history storage issues on Vechain Thor. It's important to point out that this is a problem being faced by just about every cryptocurrency out there, particularly those with a high TPS like Vechain, this means. It's quite possible that Vechain will soon be adopting 80 centralized storage solution. This is something that Solana did, for example, when it decided to store its blockchain on aavey . In the same video, another Vchain developer said that they're working on cross chain solutions, though he didn't specify which chains they're looking to bridge to, nor when these bridges will be complete. In various interviews in the second-half of last year, Sunny made it clear that Vechain had officially shifted its focus from supply chain management to sustainable development, specifically the Sustainable Development goals of the Chinese government and the United Nations. In a recent interview with another crypto YouTuber called Thinking Crypto, Sunny specified the three things that vchain is looking to accomplish in the short to medium term as part of its new niche. The first order of business is to build a strong team in Europe so that vchain's environmental experiments can be exported to other countries if they're successful in San Marino. The second initiative is ongoing, and that's VCHAIN'S grants program, which Sony hopes will attract developers who are interested in making Vchain's new vision a reality. The third aim is upcoming, and that's the series of vchain accelerator programs hosted by Draper University in the United States.

VeChain Concerns -:

This brings me to my concerns about Vchain, and I do have a few. I'll start by saying that most of my concerns relate to the extreme pressure Vechain is probably experiencing because of China's crackdown on crypto. As I said in my previous video about the Project, Vechain has been dealt with the difficult task of balancing the wants and needs of international institutions. Western investors and the Chinese government. Vechain clearly has a close relationship with the latter, and this means it's probably going to be hard for the project to receive adoption in Western countries, especially since some of them are starting to accuse China of being complicit in Russia's invasion of Ukraine and are even threatening sanctions. From where I'm standing, it looks like Vechain's pivot to sustainable development is the project's way of walking this increasingly fine line. Western governments are desperate to decarbonise in accordance with the United Nations Sustainable Development Goals, and the Chinese government has grand plans of its own in that regard. My concern there is that vechain is using A1 size fits all approach when it comes to its track and trace tactics. Put simply, what Sunny suggested in his recent interviews is that vchain wants to create a kind of carbon credit score for both individuals and institutions. This system will not only reward individuals and institutions that act in accordance with the UN Sustainable Development Goals, but they'll also punish them if they do anything that's not in accordance with these goals. Sunny specified that this would involve quote digitizing every behavior and quote submitting reports to authorities and of course, the government will decide what is incentivized and what isn't. Sunny even shared an illustration of what this will look like in one of his aforementioned presentations, and this is exactly what's being rolled out in San Marino as I speak. Now, to be fair, this might not be something vchain is itself pushing for, because the international organizations behind these utopian initiatives have explicitly stated this dystopian system is what they want, and the San Marino government is certainly on the same page there. In any case, it's clear that this isn't a system that the average person is going to embrace voluntarily, and that means vchain could see a whole new kind of adoption hurdle arise if the project goes down this path. For what it's worth, Vechain has proven that it's willing and able to pivot when adoption starts to decline, Vechain has so far been very successful in its shift in focus and I foresee additional avenues being opened up by VCHAIN'S grants and especially Draper Universities Accelerator program with a bit of luck, new use cases. Will be created that drive enough demand for VET and vetho to climb to new all time highs. And if you think Vechain sustainable development plans are scary, then you probably haven't heard of ESG.

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