VeChain is an exciting blockchain project which focuses on solving supply chain problems. Unlike other crypto coins rushing to solve layer 1 and layer 2 problems,
VeChain takes a detour and goes into uncharted territory, and that makes a great case for the use of blockchain technology.
However, is VeChain web 3.0?
Is Vechain Web 3.0?
Yes. VeChain is not fully web 3.0. But before we go any further, let’s find out one thing:
What is Web 3.0?
Unlike previous iterations of the internet, Web 3.0 presents a new opportunity for users to read, write and own their data over the internet.
Instead of using the currently available free tech platforms which force you to give up your data and privacy, Web 3.0 allows you (and all users) to participate in the governance of the network and protocol.
With Web3, you’re not just a customer or a product. You can become a participant and shareholder.
By owning shares (also called tokens or cryptocurrencies) of the network, you own part of the network. If you hold enough of these shares, you have a vote on the direction of the network.
There are three key elements of Web 3.0. These are:
- Artificial Intelligence and Machine Learning
- Connectivity and Ubiquity
So how does VeChain fit in as a Web3 protocol?
Not fully Decentralized
VeChain relies on a Proof of Authority consensus mechanism to produce blocks and secure its network.
The founders of VeChain wanted to find the ideal balance between centralization and decentralization.
VET is a half-decentralized platform that supports both Web 2.0 and 3.0.
Although partially decentralized, VeChain offers an open platform for willing participants and a steering committee that vets all the information.
VET reduces information liability in businesses. That also means a user can’t fully own their data.
Need for Permission and Verification
VET has an on-chain governance system with a Steering Committee. The users elect this committee to help make and execute decisions within the network.
To maintain transparency and security of the network, the steering committee has to vet every suggestion and decision. For this reason, VeChain tracks large amounts of data within its network.
VET can be useful in many other places despite failing the decentralization and permissionless test. The dual token aspect in VET allows it to work in other areas besides DApps (Decentralized Applications).
Is Vechain Built On Ethereum?
Initially, Yes. The VeChain token grew first on Ethereum before transitioning to its own blockchain and rebranding in 2018. Known originally as the VEN blockchain, it has changed to VeChainThor (VET).
Is Vechain Decentralized?
Yes, it is, but only partially.
The reason for this is that VeChain has two tokens that work differently.
The VET token lets participants vote on any protocol changes while VTHOR handles transactions.
Decentralization allows the transfer of supervision and decision-making from a single powerhouse to an open distribution network or the internet. For example, today, many people can send, receive and store money or crypto without third-party interference.
What Are Web 3.0 Companies?
A Web 3.0 company is any company that builds a network or protocol using the three key principles of Web 3.0 design. By this definition, any company with the following characteristics is Web 3.0:
- A decentralized protocol
- A permissionless and trustless network
- A ubiquitous network
A majority of cryptocurrencies in the market today are 3.0, except for VeChain, a hybrid.
Also read: Is the New York Times Web 3.0?
Is VeChain Supply Limited?
Yes. VeChain has a limited supply.
According to Coinmarketcap, VeChain has a circulating supply of 64,315,576,989 VET coins and a max. supply of 86,712,634,466 VET coins.
Does Vechain Follow Bitcoin?
Compared to other coins like Ethereum and Litecoin, there’s little, if any, correlation between Bitcoin and VeChain.
According to Coinpredictor, the correlation between VeChain and Bitcoin has a value that ranges between 0.37 and 0.41. Ethereum has a correlation of 0.68, and litecoin correlates at 0.83.
We first need to understand the correlation values Coinpredictor uses to understand these figures.
Correlation ranges from -1 to 1, and a 0 correlation means there’s no correlation at all between the coins. -1 is the strongest negative correlation, and 1 is the strongest positive correlation.
With a correlation value of 0.37, VeChain is not affected by any sudden changes to the price of Bitcoin.
Is Vechain Inflationary?
VeChain has both inflationary and deflationary properties.
VeChainThor network uses VET, which has a limited supply. Holding VET generates the VTHO token. VTHO itself has a controlled inflation rate. However, VTHO burns during transactions, causing deflation within the network.
Also read: Is Ethereum Inflationary?
Is Vechain Better Than Cardano?
VeChain and Cardano do not serve the same purpose, making it hard to prefer VeChain over Cardano.
Cardano is a direct Ethereum competitor. It aims to outdo Ethereum in hosting decentralized apps while offering a faster, cheaper, and more secure network. That way, Cardano can help more businesses, governments, and people benefit from blockchain technology.
VeChain, on the other hand, makes it easier for businesses to manage inventory, track shipments to the manufacturer, and master logistics.
VeChain’s goal is to master the supply chain, making it one of the best use cases of blockchain technology.
Whether VeChain or Cardano is better entirely depends on the solution you’re looking for.
Is Staking Vechain Worth It?
Staking VeChain is only worth it if you believe in the VeChain project, which appears promising in our opinion. You can stake your VET directly from your wallet, and that will bring you a return of about 1.34% per year.
Running a master node is more profitable, and you can make a return of up to 2.27% per year staking VET.
It’s also worth noting that by staking VET, you lock your coins in a smart contract, and you cannot withdraw or use them until your smart contract expires.
VeChain is an excellent example of using blockchain technology to solve real-world problems. Although it’s not fully Web 3.0, it operates in a space with few, if any, competitors and does well for itself.