What is VeChain (VET)?

Are you ready to meet a blockchain project that opens the doors of Web3 to the corporate world? In this article, we will talk about VeChain. If you think that blockchain technology is limited to cryptocurrency trading, VeChain may surprise you. Because the answer to the question of “What is VeChain?” is full of very real and practical solutions ranging from preventing counterfeiting to increasing food safety. If questions such as “What does VeChain do?” or “What is VET coin?” are on your mind, you are in the right place. For those who want to get to know this project that brings the corporate world together with Web3, you can find everything you are looking for in this guide.

Definition and Origin of VeChain

VeChain is different from other blockchains you may have seen so far. Because it is an enterprise blockchain platform generally designed for businesses to improve their processes with blockchain technology. Focusing primarily on tracking luxury products and supply chains, VeChain evolved into a general service platform over time, paving the way for Web3-based enterprise applications. The platform brings together technologies such as smart contracts, IoT (internet of things) devices, and artificial intelligence to provide data transparency and blockchain traceability. Thus, companies in different sectors can track products and data reliably on blockchain. The emergence of VeChain is based on the needs that Sunny Lu observed in the corporate world. So who is Sunny Lu? Before founding VeChain, she was an IT leader who served as CIO at the Chinese branch of luxury brand Louis Vuitton. While working in the luxury fashion sector, Lu gained experience in combating counterfeit products and supply chain solutions. In the product tracking project called “Track and Trace” that she carried out within Louis Vuitton, she developed a system to track the entire process of products from production to customer. This experience also showed Lu the usability of blockchain technology in this field. In 2015, Sunny Lu and her team launched the VeChain project, which is the answer to the question of when VeChain was founded. The project initially started its operations under the roof of BitSE, a blockchain innovation company based in China. Afterwards, it made it its mission to offer blockchain solutions to the corporate world. Initially, VeChain, which started working on the Ethereum network like many altcoins, started pilot applications by issuing its first tokens (VEN) in 2016. The real big step on the VeChain blockchain came in 2018. This year, VeChain launched its own main network, VeChainThor, and separated from Ethereum. Thus, the platform gained full control over scalability and customization. The VeChainThor network uses the Proof of Authority, or PoA, consensus mechanism. With its 101 authority masternodes, it offers a suitable infrastructure for corporate use thanks to its high transaction capacity and low energy consumption. In short, when the definition and emergence of VeChain are examined, it is seen that its foundations were laid in 2015 in line with Sunny Lu's corporate vision. In 2018, it launched its own blockchain and switched to a dual token model. We will examine the dual token model and other features of the network in a moment.

VeChain History: Major Milestones

There are many major milestones in VeChain's development process. Founded in 2015, this altcoin and blockchain project has taken critical steps in its 10-year history. Here is the history of VeChain:

2015: The establishment process began

VeChain was founded in 2015 under the leadership of Sunny Lu. The project was initially an initiative of the Shanghai-based BitSE company and focused on corporate applications from day one. During this period, the team began researching the areas of use of blockchain in the business world and developing pilot projects.

2017: Strategic partnerships emerged

Shortly after its establishment, VeChain made its name known by establishing major corporate partnerships. In 2017, it partnered with PricewaterhouseCoopers (PwC), one of the world's leading auditing and consulting companies. PwC joined the project to offer VeChain's blockchain-based solutions to its own customer network. Again during this period, Norway-based auditing and certification body DNV GL gave the green light to blockchain technology and joined VeChain as a strategic partner and investor.

2018: VeChainThor and dual token system implemented

We can say that 2018 was one of the most critical turning points for VeChain. Because in July 2018, VeChain officially launched its own mainnet called VeChainThor and converted VEN tokens on Ethereum to VET coins, the platform's native cryptocurrency. With this network transition, the question of what VET and VTHO tokens are came to the fore. Because the project introduced the dual token model.

VET token was introduced as the basic unit of value transfers and governance on the network. VTHO token, on the other hand, started to be used to pay transaction fees (gas fees) on the network. VET holders started to automatically generate VTHO by holding the tokens in their hands. In 2018, VeChain also established the Singapore-based non-profit VeChain Foundation to strengthen its corporate governance structure. The VeChain Foundation began managing the project’s development, marketing, and global partnerships through an elected Executive Committee.

2018-2019: Corporate partnerships expanded

With the launch of the VeChainThor mainnet, VeChain continued to establish major partnerships in many sectors. In the automotive sector, a joint pilot project was conducted with German automotive giant BMW. A digital “vehicle maintenance book” was created that transferred vehicle maintenance records to the blockchain in an immutable manner. This aimed to prevent problems such as odometer fraud, which is common in the used car market.

In the retail and food sector, Walmart’s subsidiary in China developed a blockchain platform that provides supply chain tracking of fresh food products with technical support from PwC. The Walmart China Blockchain Traceability platform, announced in 2019, began tracking food products such as meat, rice, and seafood from the farm to the store shelf by working on VeChain Thor. This platform allowed consumers to verify the source of products.

VeChain began to show itself in areas outside the supply chain in 2019. In the luxury consumer sector, an application was developed in collaboration with LVMH (Louis Vuitton Moët Hennessy), one of the world's largest luxury fashion groups, to verify the authenticity of premium products. In a joint project with wine producer Penfolds, the entire story of the wine from the vineyard to the customer was recorded on the blockchain thanks to the NFC chips placed in each bottle exported to China. This project was implemented with the "My Story" application developed by DNV GL and using the VeChain infrastructure.

In the public and sustainability field, VeChain signed a Memorandum of Understanding with the Republic of San Marino in Europe in 2019 and started the Low Carbon Ecosystem initiative, which will contribute to the country's carbon reduction strategy. This ecosystem, which was implemented in collaboration with DNV, offered a VeChainThor-based model that gives carbon credits to individuals and businesses for their environmentally friendly behavior.

2020 and beyond: VeChain developments accelerate

In the 2020s, VeChain began to be used in areas such as health and sports. For example, in 2020, an application called MyCare was used in partnership with DNV at the Mediterranean Hospital in the Greek Cypriot Administration of Southern Cyprus to record hygiene and infection risk management data on the VeChain blockchain during the COVID-19 outbreak. In 2021, VeChain signed a multi-year sponsorship agreement with the mixed martial arts organization UFC and became the official blockchain partner of the UFC. Thanks to this, the VeChain brand reached millions of viewers and new experiences such as NFT-based digital collectibles were developed for UFC fans.

In 2022 and 2023, VeChain continued to develop its technical infrastructure. With the PoA 2.0 consensus update, it both increased security and integrated the finality feature in transactions, providing the efficiency required for enterprise use. Also in 2022, VeChain partnered with Amazon Web Services (AWS) to scale its carbon emission management platform called VeCarbon.

By 2024, the number of VeChain partnerships increased even more. The VeChain Foundation began collaborating with the United Nations on sustainable development projects to grow the ecosystem and became a global network by opening offices in Europe. In short, from its establishment until 2025, VeChain became a pioneer of enterprise applications in the blockchain world.

Why is VeChain Valuable?

The most important element that sets VeChain apart and valuable from similar cryptocurrency projects seems to be the solutions it brings to real-world problems and the collaborations it establishes with giant brands in parallel. Thanks to both its technological approach and partnerships, VeChain has become a platform that offers real-world use cases. Apart from this, the listing and use of the VET token on many exchanges is also a critical element. Let's take a look at all the factors that make VeChain valuable.

Real-world use cases, solutions it offers, and huge partnerships

VeChain is not just a theoretical blockchain infrastructure. Because it has proven itself with real-world use cases. Today, when we look at VeChain's use cases, the network comes up with many solutions.

• Supply chain and logistics: VeChain's most well-known use case is supply chain management. Projects have been carried out to increase transparency, especially in the food and retail sectors. For example, Walmart China uses the VeChainThor blockchain-based traceability platform to track food sources. In this way, consumers can easily access information such as which farm the products on store shelves came from and under what conditions they were processed.
• Automotive: VeChain also offers value to the automotive sector. As part of the pilot project carried out with German automotive manufacturer BMW, the service and maintenance records of the vehicles were engraved on the blockchain. Similarly, Renault and Microsoft have developed a system that tracks vehicle maintenance and spare parts history.
• Luxury brands: The problem of counterfeit goods is a serious problem, especially in the luxury sector, and VeChain has a solution for this. In joint projects with luxury brand groups such as LVMH, NFC/RFID chips have been placed on various products, from bags to wines. Consumers can verify the authenticity of the product and the production processes it has gone through by scanning the code or chip on the product they buy with their smartphones. For example, brands such as Givenchy or H&M use the VeChain infrastructure to make the supply chain of their products transparent and combat counterfeiting.
• Healthcare and pharmaceutical sector: VeChain has also found innovative areas of use in the healthcare sector. A project developed together with the Chinese arm of pharmaceutical giant Bayer tracked clinical trial data via blockchain. This system ensures that the data during the trial process remains unchanged. Thus, it prevents manipulation of health data.
• Environment and sustainability: VeChain also stands out with sustainability-focused projects. One answer to the question of what VeChain is useful for is carbon footprint tracking and environmental data management. The Low Carbon Ecosystem project, implemented in collaboration with DNV, monitors and helps companies reduce their carbon emissions. Within the scope of this ecosystem, users are rewarded with digital carbon credits for environmentally friendly behaviors, encouraging carbon reduction. In the energy sector, VeChain has developed a platform that monitors quality and emissions in the LNG (liquid natural gas) supply chain in China, together with companies such as ENN Energy and Shanghai Gas.

In general, VeChain offers concrete solutions for developing Web3 enterprise applications in various sectors. These wide areas of use, ranging from food safety to automotive, from fashion to health and the environment, support the platform's real-world validity. This adds real economic value to VeChain, unlike other cryptocurrency projects.

Integration with auditing companies

Another important element that increases VeChain's value is the strong corporate partnership network behind it and the reliability that this network brings. Since the day the platform was founded, its goal has been to apply blockchain technology to real business problems by establishing partnerships with large companies. Today, VeChain has a history of working with giants from different sectors such as PwC, DNV, BMW, Walmart, Microsoft, Shanghai Gas, Bayer, Louis Vuitton.

In particular, auditing and consulting company PwC plays a key role in VeChain's growth. Thanks to the strategic partnership with PwC, VeChain has gained access to PwC's large customer base in China and Southeast Asia. Similarly, the participation of a global certification company like DNV in the VeChain ecosystem has been a great gain for the platform’s corporate reputation. DNV has integrated its own auditing expertise into the applications developed on the VeChain network

Dual token model: VET & VTHO

A prominent feature of VeChain’s technical and economic design is its dual token model. This model aims to ensure the continuity of the platform and the sustainability of its use. There are two types of cryptocurrencies in the VeChain ecosystem: VeChain Token (VET) and VeThor Token (VTHO). This dual design also raises the questions of “What is VET token, what is VTO token?”

VET is the main token of the VeChainThor blockchain and represents value transfers on the network. VET, just like other cryptocurrencies, can be used for buying, selling and storing value. It also provides voting rights in the management of the network. On the other hand, VTHO can be defined as the “energy” token of the VeChain network. Because VTHO is a second token produced by holding VET on the network and used to pay transaction fees. The VTHO created is used to cover the gas (fuel) fee for transactions to be made on the network. So why did VeChain choose this dual-token mechanism? According to the project, the biggest advantage of this dual-token mechanism is the stability and predictability in transaction costs. Because in traditional single-token blockchains (like Ethereum), the same token is both a store of value and a means of paying transaction fees. Therefore, this situation makes the transaction cost volatile as a result of fluctuations in the token price. On VeChain, although the VET price changes according to market conditions, transaction fees can be kept more constant with the balance of VTHO production and consumption. This is a critical feature, especially for businesses. Companies do not want to face high and uncertain transaction fees when using blockchain applications. For this reason, VeChain's model offers sustainability for corporate users by minimizing the reflection of speculative volatility, which is common in the cryptocurrency market, on transaction costs.

In addition, the dual token system has a rewarding structure for network participants. Holding VET provides the right to participate in management, as well as a passive income such as VTHO income. This encourages long-term VET ownership and contributes to the security of the network. Indeed, VeChain offers extra rewards and privileges with special node programs called X-nodes for users who hold a certain amount of VET for a long time. Community ties are also strengthened in this way.

Who is the Founder of VeChain?

Who is the founder of VeChain? Sunny Lu is the founder and visionary behind VeChain. Sunny Lu, who launched VeChain in 2015, is a name identified with the project and currently leads the growth of the ecosystem as the CEO of the VeChain Foundation. So, who is Sunny Lu and what is her background? Sunny Lu is an executive with deep experience in the technology and luxury retail sectors (3M, Bacardi). One of the most striking points in her career is that she worked as the CIO (Chief Information Officer) at Louis Vuitton China. If she had not worked in this position, there might not have been such a thing as VeChain. After all, Lu, who worked as an IT manager at a luxury brand like Louis Vuitton, combined the experience she gained here with the idea of ​​blockchain. In particular, the product tracking (track & trace) projects she carried out at Louis Vuitton shaped Lu’s career.

During this period, Lu developed a system that could track the brand's products from production to the point of sale, but saw that this tracking remained only within the company. This experience gave birth to the idea of ​​providing trust-based traceability to different companies and sectors. Sunny Lu is one of the first names to think that blockchain technology could be a solution to this need. After a meeting with Ethereum founder Vitalik Buterin in 2015, Lu discovered the power of smart contracts and clarified the idea of ​​​​offering blockchain to the business world.

Sunny Lu, who immediately started the VeChain project, created both the technical architecture of this institutional-focused blockchain platform and started to build bridges with the business world. Its mission was to build a bridge between blockchain and businesses.

The VeChain Foundation, founded by Sunny Lu, is the main organization managing the project. The Foundation, which was officially established in Singapore in 2017, is organized as a non-profit structure and is responsible for carrying out the development of the VeChain ecosystem. As the president of the Foundation, Sunny Lu both directs technical developments and manages partnerships and community relations worldwide. The Steering Committee and advisory councils established within the Foundation meet regularly under the leadership of Sunny Lu to determine the roadmap of the project.

Frequently Asked Questions (FAQ)

We have covered many details about VeChain, a prominent project in the corporate field and one that can be considered deep-rooted in the cryptocurrency arena with its 10-year history. However, if you have any questions, you can review the frequently asked questions and answers below:

• What is VeChain and what problem does it solve?: VeChain is a blockchain platform that offers transparency, data security and anti-counterfeiting solutions in corporate processes, especially supply chain traceability. It makes the journey of products from production to the end user digitally traceable.
• Who is the founder and what is its history?: Sunny Lu is the founder of VeChain. Lu, who previously worked as CIO at Louis Vuitton China, founded VeChain in 2015 based on his experience in combating counterfeiting in luxury goods. He is a technology leader with a corporate vision.
• How does VeChain work, who uses it?: VeChain works on its own blockchain, VeChainThor, and uses a Proof of Authority (PoA) consensus mechanism. Companies record information on the blockchain with sensors, QR codes or NFC tags placed on their products. Large companies such as DNV, PwC, BMW, and Walmart China actively use VeChain.
• What is the difference between VET and VTHO?: VET is VeChain’s main token; it is used in value transfer and governance transactions. VTHO, on the other hand, is automatically generated by VET holders and used to pay the fee (gas) for transactions on the network. Holding VET passively earns VTHO.
• What are the advantages of VeChain?: VeChain has many advantages. Here are a few: focus on real-world problems, strong corporate partnerships (BMW, PwC, DNV, etc.), stability in transaction costs with a dual-token model, high efficiency and low energy consumption, reliable infrastructure integrated with auditing companies.

For more on the future of supply chain and blockchain’s place in the enterprise space, check out our JR Kripto Guide series.