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- VeChain (VET) has introduced a dual token system to address a multi-year problem facing the blockchain industry.
- This approach consists of VET and VTHO to store value and keep costs predictable on the blockchain.
The blockchain ecosystem has over the years been confronted by the issue of persistent unpredictability of transaction costs. This appears quite interesting as the public, open blockchains rely on an economic system to govern the behaviour and distribution of tokens within the network.
To effectively address this challenge, VeChain (VET) has introduced a Unique Two-Token System consisting of VET (VeChain Token) and VTHO (VeThor Token). While VET serves as a value-transfer medium (utility token), VTHO exists as the representation of the underlying cost of using the VechainThor blockchain resources (transaction/gas token.)
Our dual-token model on VeChainThor ensures stable transaction costs, even in volatile markets!$VET stores your value while $VTHO fuels transactions, keeping costs predictable.
Perfect for those who prioritize reliability. Learn more: https://t.co/uISgvo65px pic.twitter.com/b0EdDtQza9
— vechain (@vechainofficial) May 18, 2024
Referring to a 2019 article on this subject, the role of VET was limited to the generation of a secondary token (VTHO), storing, and transferring value. However, VTHO operates as the energy or gas token of the blockchain. Enterprises and developers who use the blockchain are also mandated to upload data and create smart contracts using VTHO.
More on the Dual Token System
In a blog post, VeChain explained that the objective of using the dual token model is to prevent transaction fees from being directly exposed to price volatility. Interestingly, this is mostly common in periods of market bull run where the cost of transaction rises in response to the general price increase. In most cases, the increase in fees triggered by network congestion makes the single-token blockchain model even more expensive and inconvenient to use.
When crypto markets are in a bull run, token prices inflate and as a consequence, the cost of transacting on the network also increases. This, however, is only the case when the native token is used to pay for transacting on the network. The objective of the dual-token model is to prevent transaction fees from being directly exposed to price volatility. It is imperative for enterprises and individual users alike, to be able to predict the future costs of using the network, VTHO helps vechain to provide predictability.
VeChain (VET) Core Features and Price Analysis
With this transformative approach, VeChain now has four core flagship features which include Meta-transaction features, Proof-of-Authority (PoA) consensus 2.0, an On-chain governance mechanism, and the Unique Two-Token System. In addition to these, VeChain has also introduced a ToolChain built on the VeChainThor blockchain to provide solutions from product lifecycle management to carbon credit solutions and environmental sustainability reporting. For now, it is offered as platform-as-a-service (PaaS), software-as-a-service (SaaS), and blockchain-as-a-service (BaaS).
With these initiatives, analyst Crypto Yaper believes that the VET price could be in line for a bullish reversal to $0.5. Confirming this prediction is World Of Charts, which claims the asset is bouncing from a real solid support level often labelled as Accumulation Zone Area. According to this analyst, VeChain could surge by 400-500% within the next few weeks.
At press time, VET was trading at $0.034 after declining by 2% in the last 24 hours, 17% in the last 30 days, 23% in the last 90 days, and 6% from year to date.
