Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject
The idea of foraying into a crypto because it costs a fraction of a dollar is tempting. Alas, it’s not always a smart decision. Then again, the way the market is doing, it’s doubtful that most financial decisions will be smart. In any case, it’s worth looking at VeChain. Why? Well, just in case. Also, over the past few days, there’s some optimism going around as well. Especially on the back of Bitcoin and other major cryptos recovering on the price charts.
In this article, we will analyze what drives the price of VET and what factors affect the altcoin’s price.
About the platform
In 2015, Sunny Lu, the Chief Information Officer of Louis Vuitton China, founded VeChain. It was founded with an aim to disrupt conventional business models and revolutionize the way companies around the world manage their supply chains.
The company boasts partnerships with luxury brands like Louis Vuitton, BMW, big-four auditing firm PriceWaterhouseCoopers (PwC) and Walmart. Most recently, VeChain entered a multi-year deal with the UFC. The deal is valued at $100 million.
VeChain works on a consensus protocol that is different from the traditional proof-of-work and proof-of-stake protocols. VeChain uses a proof-of-authority consensus model. This protocol requires relatively low computational power and is more about integrity and quality. This consensus model is rather centralized, when compared to traditional ones.
VeChain is a blockchain platform that seeks to disrupt the logistics industry by reimagining how businesses around the world manage their supply chain. The relatively nascent firm has become an industry leading name by focusing on collaborations with established companies around the world.
VeChain has announced a slew of partnerships since the beginning of 2022, tapping into various sectors, demonstrating the power of blockchain and the crucial role it will play in the future. The firm behind VET, a token that is ranked 33 on CoinMarketCap, has diversified its clientele by collaborating with names from retail, luxury, fintech and even entertainment industries.
Most recently, VeChain announced a partnership with UCO Network, a public blockchain protocol that operates in the Biofuel space. This partnership will introduce VeChain to ESG issues, furthering its sustainability narrative. Other notable ventures include a technical partnership between Amazon Web Services (AWS) and VeCarbon, a subsidiary of the VeChain Foundation.
Although VeChain is based out of Singapore, a significant portion of its team and connections are based in China. Almost half of VeChain’s partners are Chinese companies. Such is the customer concentration in China that more than half of the demand for VTHO is coming from a single customer – Walmart China. This so-called Chinese label may not be in their best interest, however, given the Chinese government’s crackdown on cryptocurrencies and frequent trade wars with the west. These factors cast a shadow on the project’s overall sustainability.
Following its rebranding as VeChain Thor and the subsequent launch of its own mainnet in 2018, VeChain pivoted to retail-facing products like decentralized applications (dApps) and e-NFTs. This move may not have been in their best interest. Data from DappRadar shows negligible activity on VeChain dApps, despite the company waiving off gas fees for dApps. These ventures could serve as a distraction, especially amid increased competition from industry giants like IBM and SAP who have started offering enterprise-facing blockchain products.
In fact, data from VeChain Stats revealed a troubling decline in its mainnet activity.
Although there has been a visible spike in activity since the beginning of August, one cannot ignore the difference compared to…
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