VeChain Due Diligence: Part 1: White Paper
As requested, we have analyzed the white paper located in the Reddit All-in-One thread and extracted information regarding VeChain. The White Paper, or Non-White Paper as the VeChain team calls it, was published in 2017 and provides an overview of the VeChain development plan. It gives a synopsis of VeChain’s concept background, technical structure, applications, governance model, funding information, and list of team members. Below is a summary of highlights.
VeChain’s vision is “to build a trust free and distributed ecosystem” based on the self-circulating and expanding Blockchain technology. This ecosystem will be transparent with a large portion of its profits coming from true value. It will reduce trust issues between the various parties and each participant will be fairly rewarded. All aspects of business, including commercial and economic activities, will be supported. Its value will be found in the scalable closed loop process and high speed transactions. Participants in the VeChain distributed ecosystem:
Application service providers
Smart contract service providers
VeChain network node providers
The VeChain developers consider the VeChain Token(VET) to be the ‘blood’ of the ecosystem. The VET circulates throughout the system, interacting with each of the participants. To ensure adequate circulation, VeChain plans to sell at least 70% of the total tokens to the community. Investors must use Ethereum to purchase VET. The VeChain foundation uses VET from each smart contract to pay for the GAS needed to maintain the contract. Anywhere from 75% to 99% of income is awarded to the node provider and the rest is used by the VeChain Foundation to help pay for operations and technical development.
Since its beginning in 2015, VeChain has worked to build a blockchain technology that improved on those already in existence. It has gone through a series of improvement stages:
1. The combination of SideChain technology with Bitcoin network (UTXO) and Colorcoin improved the speed of transaction times opening up a more scalable model.
2. Improvements were made to the smart contract of Ethernet and Ethereum Fork. Its DBGP and DMBSP protocols make VeChain 3 times more efficient than Ethereum.
3. Data embedding and read performance was increased to 300TX/s.
4. VeChain created a joint development with CHAOS data management model, IoT technology, and Blockchain technology
The VeChain technology structure is mainly divided into the blockchain layer and the business layer. The focus of the blockchain layer is to improve and fork the Ethereum codebase. It covers Dynamic Block Generation Protocol (DBGP), Dynamic Block Security Protocol (DMBSP), and Data Set Embedding Protocol (DGIP). Several improvements to the blockchain layer currently in development:
1. BLACP- a blockchain data storing classification system that will differentiate between time and value.
2. PBCP-will read, distribute and implant data within the same blockchain category.
3. DCCP-will sync data within different categories of a blockchain.
The purpose of the business layer is to perform the secondary operations of the smart contracts. It includes User Developed Applications (UDAS), HDMS, DCASS, CNS and DGS. It also provides a hashtag storage service with CHAOS.
IDs for VeChain are generated using a sha256 function which is then written into an NFC, QR Code or RFID tag. All types of data are accepted. Data is verified by comparing hashes provided. VeChain uses the Hashed Storage Service to provide secured storage of digital files, pictures, and text data.
VeChain has various teams that manage the technical aspects of the blockchain. The IoT Technology Team analyzes developments in the Internet of Things and coordinates the development of technology within the blockchain. The Testing Team acts as the quality management team by testing software for accuracy, integration and performance. The Technology Team coordinates the teams in research, development, testing, deployment, and maintenance.
VeChain is being developed to work with any industry. Industries in which it can currently be applied:
The VeChain Foundation was established in July 2017 to act as the non-profit sponsor entity. The Foundation is composed of steering committees which support the development, governance, and transparency of VeChain. It also acts as an advocate and promoter of the technology. The governing committees are the Strategic Steering Committee, Technical Audit Committee, Remuneration and Nomination Committee, Public Relation Committee, and Supervisory Committee. The Financial Management Team manages the digital and financial aspects of the Foundation. This team reports directly to the Strategic Steering Committee. The General Secretary is responsible for overseeing and guiding the various committees.
The Foundation is funded from two sources: ICO startup funds and regular operating income.
The initial one billion VeChain Tokens were distributed with the following ratios:
41% for crowdsale
9% to private investors
23% to enterprise investors
5% to co-founders and the development team
12% held in reserve for continuous operation and development
10% for business case development
VeChain receives digital assets and funds through every day operations including GAS purchases, licensing, and patent transfers. Between 5%-10% of these funds will be used to invest in blockchain technology, startups, angel investments, and emerging technology. The remaining funds will be allocated as follows:
Sunny Lu-CEO and Project Leader
Lu graduated from Shanghai Jiao Tong University with a major in Electronics and Communication Engineering. He previously served as the CIO of LV China.
Richard Fu, Partner & VP; PR and Marketing Director
Fu has specialized in PR and marketing for over 20 years working for firms such as Shangri-la Group and LVHM.
Chin Qian, Channel & Sales Director
Qian worked for HP from 2004-2016. He joined the VeChain team in 2017.
Jay Zhang, Finance Director
Zhang previously served as a senior manager for PwC and Deloitte. He joined VeChain in 2015 as the leader of Blockchain governance framework design.
Scott Brisbin，General Counsel
Brisbin is an American attorney with clients ranging from Rolling Stones to Disney and MGM. He joined VeChain in 2016 to help with patent maintenance, legal security and organizational structure.
Other team members include: Jerome Grilleres, Business Development; Jianliang Gu, Technical Director; Peter Zhou, R&D Director & Scientist; Bin Qian，Blockchain Director; Tony Li, Application Development Manager; Sherry Li, Product Manager; Jack Wu, Project Manager; Harvey Shang, DA Facilitator; Lingbo Li, Risk Controller; and Cissy Chen, HR&Admin Manager.
The White Paper found on the Reddit All-in-One Thread concerning VeChain provides a detailed overview of the company’s development plan. It includes a breakdown of VeChain’s concept background, technical structure, applications, governance model, funding information, and list of team members.