As of Friday morning, May 21, VeChain (CCC:VET-USD) cryptocurrency had fallen to 13.28 cents per token. This is way off of its recent highs at 27.8 cents in mid-April. However, this altcoin has a good chance of doing very well the rest of the year.
At the end of December 2020, it was at 1.9 cents. That means it is up 598% since then and more than 3,000% in the last year from 0.42 cents a year ago. This is an amazing performance, and I suspect it foreshadows a good future for the crypto.
VeChain’s Standout Features
VeChain’s focus as a blockchain platform and related cryptocurrency is on corporate supply chains and logistics. Its main purpose, according to its whitepaper, is to improve the management of supply chains and related business processes. For example, a number of large enterprises now use VeChain for inventory tracking purposes.
The addressable market for VeChain’s area of focus could turn out to be quite large. A study from 2020 concluded that $300 billion worth of food could be tracked and traced on the blockchain by 2027. Walmart (NYSE:WMT) has partnered with IBM (NYSE:IBM) and created the Food Trust Blockchain with nine other food companies to track food supplies.
A Norwegian classification company called DNV has partnered with VeChain. It provides tracking services for 13,175 vessels and mobile offshore units.
Existing VeChain partnerships and large businesses that use VeChain are tracked on a site called Vechaininsider.com. This lists five strategic partnerships, including DNV, PriceWaterhouseCoopers and several Chinese companies.
Recently, Decrypt.co wrote about an LA-based vaping company called PuffBar that used VeChain to track counterfeits. In order to tell whether a vape is a knock-off, users take a picture of the UPC code and product. The crypto site can then tell if it is a knock-off after it’s uploaded.
VeChain has a proof-of-authority protocol system. This is an offshoot of the proof-of-stake system. As a result of its dual token supply structure, the total supply of tokens is slightly inflationary as a result. VeChain is here to stay. Look for the token to do very well this year as its blockchain popularity rises.
The VeChain Dividend
Another perk of VeChain is that it pays a dividend. An “offshoot coin” called THOR, or VeThor (CCC:VTHO-USD) is paid to every holder of VET tokens. The market price for VTHO was just below 1.15 cents as of May 20.
Based on the best article I have found so far on the VET dividend, each VET owner has the right to receive 0.000432 VTHO tokens daily per VET token.
Therefore, the VTHO tokens are worth 4.958 cents per 10,000 VET tokens daily, or $18.10 annually (i.e., $0.04958 x 365). As 10,000 VET tokens are worth $1,256, the dividend yield is about 1.44% annually (i.e., $18.10 / $1,256). Again, this dividend gets paid out to VET token owners daily in VTHO tokens.
VET-USD’s History
Sunny Lu created VeChain in 2015, and he remains the CEO of the VeChain Foundation, based in Singapore. Prior to this, he co-founded the Chinese internet firm Qtum, another digital crypto asset. He was previously the CIO and COO of Louis Vuitton China. VeChain has over 90 employees, mostly software developers.
In late 2019, the VeChain Foundation’s wallet was hacked, and 1.1 billion VET tokens were stolen, which at the time were worth $6.53 million. The stolen tokens were tracked by the foundation using a software program from cybersecurity firm Hacken. It also had exchanges blacklist the addresses associated with the hacker who stole the VeChain tokens.
VeChain has a maximum total supply cap limit of 86.712 billion VET tokens. CoinMarketCap reports that 64.3156 billion VET tokens are circulating, which means that 25.8% of the supply is available to be validated.
VeChain does not use mining. It uses a “proof of authority” consensus system to validate transactions. This is where a group of “masternodes” validate all transactions. They are selected by the VeChain Foundation and the VeChain community after Know Your Customer (KYC) processes.
What to Do With VeChain Tokens
As more companies begin to use the VeChain blockchain to monitor their supply and inventory channels, the VET tokens will become prolifically more popular.
Look for VeChain to regain its former heights sometime in the next year. As a result, this crypto looks like a good buy at this point with its price well off its highs.
On the date of publication, Mark R. Hake did not hold a long or short position in any crypto or security in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.
