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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.

Concept Background

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:

Enterprise organizations
Application service providers
Smart contract service providers
VeChain network node providers
VeChain Foundation

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.

Technical Structure

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:

Governance Model

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:
Technology Development-50%
Business Development-35%
Daily Operation-5%

VeChain Leaders

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.

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VeChain Due Diligence: Part 3: Shanghai Office, Press Coverage, Hands On, and Policy

VeChain was created in 2015 to provide solutions for supply chain tracking. Through VeChain, a product can be traced from its origins through ownership. It helps to reduce fraud and counterfeiting of luxury goods, including wine. Below is a summary of the information extracted from each section.

Shanghai Office

VeChain is headquartered in Shanghai. The office is located on the fourth floor of building number 4 on Yuyuan Road. It houses the design team, development team, testing team, core technology team, project management team, HR team, IoT team, finance team, legal team, digital asset team, and PR team. The first global meetup at this office occurred on October 22, 2017.

Press Coverage

Media giant Al Jazeera talks blockchain with VeChain CEO Sunny Lu.

This article was published by Al Jazeera on February 3, 2018. Tallha Abdulrazaq reports that he met with Sunny Lu at a blockchain event in London. Lu indicated in the interview that governments are perfect candidates for blockchain usage due to the number of departments and interactions. These entities can use blockchain to ensure accuracy and make it harder for corruption to go unchecked. The Chinese government has recently teamed up with VeChain which specializes in authentication and verification technologies.

Jerome Grilleres (EU GM) talking with Cointelegraph about VeChain!

In an interview with Cointelegraph reporter, Maria Jones, VeChain EU General Manager, Jerome Grilleres describes how VeChain technology is helping the luxury industry by reducing fraud and engaging luxury customers. The process works by applying a VeChain label to the product. A consumer can scan the label with a mobile app to find out if the product is authentic. The application will also give a background of the product. The background overview can contain information on the designer, the design process, history of the product, and more. Upon purchase of the product, the retailer transfers ownership of the product through a QR code which is then stored in the blockchain. If the product is ever lost or stolen, the owner can update the blockchain information. When the product is scanned again, it will show rightful ownership. In the future, Jerome would like to see an ICO that offers loyalty coins being offered by brands instead of airline miles or loyalty points that are currently being used.

BlockShow Asia Reveals: How VeChain Will Change Luxury Market

In December 2017, VeChain showcased how its blockchain technology can be used in the luxury market. The technology can be used through the supply-chain process as well as the entire life cycle of the product. The system uses IoT technology to create a private key for a product that is used to track the product through the cycle. Consumers use an app to trace and update the history of the product.

Blockchain is shaking up O2O in China and turning cryptocurrency into Pokémon Go

Technode interviewed VeChain’s Branding Manager Kate Liu in November 2017. Liu described a beta test between VeChain and the fashion brand Babyghost. NFC-enabled chips were embedded in the products. When scanned with the mobile app, the chip would tell the ‘story’ of that product. Fifty of the limited-addition items contained a lucky serial number allowing the owner to meet the designer. Liu stated, “It engraves the uniqueness of each product and digital ownership as a connection with the consumer as owner. The brand can establish one-on-one interaction with the consumer through the product.” VeChain is currently using this technology in luxury, food, wine, and automobile brands, as well as fashion.

VeChain (VEN) Cryptocurrency Trade Recommendation

In February 2018, VeChain was recommended to investors by Cryptobriefing. This recommendation was based on several aspects of the technology and company.

1. VeChain’s focus on supply chain management has evolved into counterfeit luxury goods. This problem is worth about $461 billion per year. VeChain’s solution is to track items throughout the entire supply chain process through embedded Internet of Things (IOT) encrypted chips.

2. The VeChain team is internationally diverse and contains a number of seasoned professionals with vast experience in the area. Sunny Lu, the founder of VeChain, formerly worked with BitSe and Louis Vuitton. Many members of the management team have had top positions with Fortune 500 companies.

3. VeChain has made strategic partnerships including BabyGhost, PwC, and Kuehne & Nagel, the world’s largest freight company.

Blockchain is Revolutionizing the Business World

Sunny Lu, CEO of VeChain, was a panelist of the 2017 “VeChain Cup” in Qingdao, China in October 2017. Lu revealed use cases of the VeChain technology from companies such as Renault and Chinese wine importer, D.I.G. He showed how the technology can be used to provide a transparent supply chain process. Lu also reported that VeChain is looking to build a blockchain-based cloud platform which will make blockchain development more convenient and result in more blockchain technologies and more apps.

Rowlingstone Weekly Report

VeChain was a subsidiary of BitSe which is one of the largest blockchain companies in China. VeChain has offices in China, France, Singapore and Hong Kong. It has already deployed 111 nodes throughout China, Korea, Japan, England, and Germany. VeChain was created in 2015 to work in supply chain technology. The technology uses smart contract templates and an NFC chip, RFID tracker or QR code to track a product throughout its life cycle. It is currently being used in the liquor, retail, luxury goods, automotive, transport, agriculture, and logistics industries. VeChain has partnerships with PwC, Kuehne & Nagel, DNV GL, Microsoft, Viseo, and Renault. The VeChain team is full of experienced leaders with impressive resumes.

Hands On

VeChain has partnered with D.I.G., a large wine importer in China, to provide a tracking technology to follow wine bottles throughout the supply chain. Labels are embedded with chips made by the VeChain Smartchip Automation Workstation and placed on the wine bottles. Consumers can scan the label with the Android or iOS app and receive an overview of the product. Buyers can verify the authenticity of the product, receive a product description, product specifications, and history. Once purchased, the buyer can scan the label to claim ownership and record it in the blockchain for future reference.


The Shanghai Office, Press Coverage, and Hands On sections of the VeChain All-in-One Thread focus on the uses of the VeChain technology as it relates to the supply chain. By using NCF chip embedded labels, consumers can track a product from creation, verifying authenticity and claiming ownership.
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VeChain Due Diligence: Part 4: Misc, VeChain Insights Fan Made, Partner Analysis

VeChain is a top cryptocurrency project developed in China in 2015 by Sunny Lu, the current CEO. The project aims to create a virtual network to digitize all things, people, and businesses. The CEO has recently announced new partnerships with BMW and DNV GL as well as new collaborations with Oxford University and new investors with Timothy Draper. Additional information on VeChain's history, market position, competitors, and partnerships will be discussed in more detail below.


VeChain, now known as VeChain Thor, is one of the top contenders in the cryptocurrency market. It is a Chinese project that was initiated in 2015 by Sunny Lu, VeChain Thor's CEO. The project aimed to create a virtual network that can digitize and interconnect all things, people, businesses, and real-world entities into an online, distributed network, allowing for "transparent information flow, efficient collaboration, and high speed value transferring.

The change from VeChain to VeChain Thor aims to push the project past supply chains and into Enterprise DApp solutions using VeChain Tokens (VET) and Thor Power (THOR). VET is a smart payment currency used by businesses to run their activities on the blockchain. Those with more VETs will have higher priority and more rights on the VeChain Thor blockchain. THOR can be used for smart contracts and running applications on the blockchain.

The VeChain project allows for the integration of Internet of Things (IOT) encrypted chips by manufacturers to their products. This improves inventory tracking, which is activated on a blackchain, or a public ledger that is digitized and decentralized of cryptocurrency transactions.


Waltonchain and Modum are among the top competitors for VeChain's blockchain technology. However, since each company focuses on specific niches of this technology, there is no direct competition between the three companies.

Ethereum, Cardano, EOS, and NEO are competing DApp platforms with rising prices. However, since the number of VeChain's parternships was exceedingly high even before the release of VeChain Thor, the rising prices do not prove to be a major threat.

Along with the number of existing partnerships, VeChain CEO Sunny Lu officially announced a new partnership with BMW on February 26, 2018. A recent partnership with DNV GL, a global provider of assurance services, has also been announced. This partnership aims to use blockchain to increase the efficiency of supply chains as well as improving the transparency of information, specifically regarding products and suppliers. VeChain is also collaborating with Oxford University for research purposes regarding technological development of the VeChain Thor platform.

VeChain has also recently received a new investor. Timothy Cook Draper, an American venture capital investor and founder of Draper Fisher Jurvetson, has announced his investment in the cryptocurrency and predicts that it will be the primary means of payment for society within the next five years. Draper has also invested in companies such as Tesla and Skype, and he has expressed great excitement about his involvement in VeChain.


Though CoinMarketCap reports that cryptocurrency prices have seen significantly negative returns in the last year, including a 44% drop for bitcoins and a 74% drop for ripple, VeChain's currency is up 28%, according to a CNBC article published on March 28, 2018. This provides an incentive for investors to stick with the VeChain currency and strengthen corporate relationships.

However, when compared to VeChain's all-time high of $9.43 in January 2018, the cryptocurrency was most recently reported as being at $2.92 as of March 21, 2018. AMBCrypto reports consistent rising and falling, with VeChain often hovering around $5.00. The currency was reported as dropping 19% in value compared to Ethereum's 23% drop during the same week. According to the report on March 3, 2018, VeChain was priced at $4.63 U.S. dollars with a market cap of $2.2 billion and a circulating supply of 475,305,592 VeChain.


VeChain can be exchanged with U.S. dollars, bitcoins, or Ethereum, depending on the exchange chosen. It can be bought, sold, or exchanged on Binance Cryptocurrency Exchange, CoinSpot Cryptocurrency Marketplace, and KuCoin Cryptocurrency Exchange.


To conclude, VeChain is a Chinese cryptocurrency developed in 2015 by Sunny Lu. The aim of the company is to create a virtual network that will allow for the digitization and interconnection of all things, people, and businesses. It can be exchanged for U.S. dollars, bitcoins, and Ethereum. VeChain's CEO has announced many recent partnerships and collaborators, including BMW, DNV GL, Oxford University, and Timothy Draper.