The economic model is one of the key factors that will determine the success of any coin. A balance should be found between costs and benefits for all stakeholders.
On this page, we will give you a complete overview of everything we know so far about the VeChain economy and its two-token Node system.
Table of Contents
- 1 A two-coin system
- 2 Nodes
- 2.1 Authority nodes
- 2.2 Economic nodes
- 2.3 Economic Nodes
- 2.4 The Node token system
- 3 VTHO generation
- 4 VTHO rewards overview
A two-coin system
The VeChain economy consists of two coins. This was done to prevent the fees for using the blockchain from being directly affected by the price of the VET token. This way enterprises can be guaranteed a stable transaction fee, something that is currently not possible in for example other projects like Ethereum.
VeChain token (VET)
Use case: Store of value and smart payment currency.
How to get: You can currently buy it from the open market, we recommend buying VET on Oceanex.pro. Strategic partners can buy from a dedicated pool.
Thor power (VTHO)
Use case: Needed to interact with the blockchain for certain operations, like executing smart contracts and transferring tokens. If you want to write data to the blockchain, you have to pay for this using VTHO
How to get: You will generate Thor when owning VET. Currently, 1 VET generates 0.000432 VTHO per day. You can also buy on the open market, we recommend buying VTHO on Oceanex.pro.
How to keep the transaction fees stable:
- The VeChain Foundation can increase or decrease the amount of VTHO that is needed to transfer data to the blockchain.
- The VeChain Foundation can increase the amount of VTHO is generated by VTHO.
This two coin system gives users of the ecosystem multiple options:
- Enterprises wanting to use the blockchain can buy the VTHO they need to put data on the blockchain from the open market.
- They can however also decide to buy VET. Using this VET they can then generate VTHO which they can use to pay for their blockchain operations.
- Users can buy VET and sell the VTHO they generate on the open market, allowing for an extra income source.
With the adoption of the VeChain blockchain, the demand for VTHO will rise. Because of this, the demand for VET will also rise.
When a certain amount of VeChain is placed inside a traceable wallet, you can apply that wallet to become a Node. There are various types of nodes, which all have different benefits, functions, and requirements.
The nodes can be divided into two types:
The authority (also called Thrudheim) Nodes are used to validate all blockchain transactions. Authority nodes have the highest requirements, but also gives you access to the biggest benefits.
- There will only be 101 Authority Nodes
- Authority nodes are selected and rated by the VeChain foundation and require a full KYC and application procedure.
- Need dedicated hardware for blockchain validation.
- A minimum of 25.000.000 VET is required to be able to apply
- Receives the highest VTHO production rate and voting rights.
The economic nodes are not validating blockchain transaction, but offer stability to the ecosystem and provide benefits compared to non-Node VeChain owners.
- A minimum of 600.000 VET is required to gain access to the smallest Node.
- No hardware is required, just place your VET into a traceable wallet (no exchange, we suggest using the VeChainThor mobile wallet).
There has been a lot of discussion in the VeChain community whether the identity of the 101 Authority Nodes should be publicly known.
The Foundation has stated that they aim to reveal as much of the Authority Nodes as possible. However, this is a delicate matter. Single individuals having an Authority Node can become a target once their identity gets publicly know. Enterprises that are currently owning an Authority Node can also prefer to stay anonymous (for now) because they are not ready to publicly announce that they are using blockchain technology or to stay ahead of competitors.
Currently, multiple companies (for example DNV GL and PwC) have come forward announcing that they are holding an Authority Node.
To get an economic node, a certain amount of VET has to be placed in your VeChain Thor mobile wallet. When you meet the minimum amount of VET you can join the Node program by going to the Rewards tab in the mobile wallet.
Normal economic nodes
- 15.000.000 VET
- 30 day maturity period
- 5.000.000 million VET
- 20 day maturity period
- 1.000.000 VET
- 10 day maturity period
Important notes about economic nodes:
- You can upgrade and downgrade between Nodes.
X economic nodes
The Economic X nodes program was launched to provide additional rewards for the most dedicated VeChain supporters.
Mjolnir X Node
- 15.600.000 VET needed
- 90 day maturity period when upgrading from a Thunder X Node
- If your wallet drops below 15.600.000 VET at any time, you will lose your X status forever.
Thunder X Node
- 5.600.000 VET needed
- 60 day maturity period when upgrading from a Strength X Node
- If your wallet drops below 5.600.000 VET at any time, you will lose your X status forever.
Strength X Node
- 1.600.000 VET needed
- 30 day maturity period when upgrading from a VeThor X Node
- If your wallet drops below 1.600.000 VET at any time, you will lose your X status forever.
VeThor X Node
- 600.000 VET needed
- No maturity period
- If your wallet drops below 600.000 VET at any time, you will lose your X status forever.
Important notes about x nodes:
- You can’t downgrade from one X Node to the other, you will lose X status. You can however upgrade.
- As an X node holder, you will get additional benefits such as VeChain Ico’s whitelist access.
The Node token system
Each Node is represented by a unique Token on the blockchain. This way you can transfer the Node to a different wallet, or even sell it to another user.
You can read more about the Node token system here.
There currently are four various ways to generate VTHO with your VeChain. These four ways (called reward types) combined will determine your total VTHO generation rate.
Reward type 1
Requirements: Own VeChain, it does not matter how much you have. No need to stake them into a node.
VTHO generation rate: Each VET generates 0.000432 VTHO per day. This is the basic generation rate, which can be increased in the future but can never decrease.
- Some exchanges (like Binance and OceanEx) payout VeThor if you hold VeChain in your exchange wallet. Most exchanges pay out the VTHO generated weekly or monthly.
- In the mobile VeChainThor wallet you will generate VTHO with every block generated on the chain (every ~10 seconds).
Reward type 2
Requirements: An authority node
Thor Power generation rate: 30% of all VTHO consumed by blockchain transactions will be rewarded to the 101 owners of a Thrudheim Masternode.
- The other 70% of Thor Power consumed will be burned.
Reward type 3
Requirements: An authority node or economic node (excluding the smallest VeThor X node)
Thor Power generation rate: The VeChain foundation has set up a special pool called the Foundation Reward Pool that has 150 billion VET in it. The Thor Power generated by this pool will be divided amongst those eligible for reward type 3.
- The foundation pool will decrease by 25 billion VET every 6 months, until further notice.
Reward type 4
Requirements: An authority node or X economic node.
Thor Power generation rate: The VeChain foundation has set up a special pool called the Foundation X Reward Pool that has 50 million VET in it. The Thor Power generated by this pool will be divided amongst those eligible for reward type 4.
- The foundation x pool will remain at 50 billion VET, until further notice.
VTHO rewards overview
All data provided in the tables below has been calculated using the using the VTHO rewards pay-out that has taken place on 15-10-2018.
Please note that we have seen rewards fluctuate by as much as 5% from day to day, so use these numbers as an indicator.
Do you have any questions? Feel free to ask them in the comments below!