VeChain Financial Executive Report Vol. 7



  • We are excited to present the seventh VeChain Foundation Financial Executive Report. This financial report covers Feb 2019 through Apr 2019. In this period, VeChain Summit 2019, the First Global Developer Conference of VeChain, was held in San Francisco. Themed as “Creating Valuable Transactions”, VeChain Summit 2019 enabled the attendees to form a deeper understanding of how blockchain empowers the real economy and displayed what VeChain has achieved together with its partners from across the industries.

    As always, we sincerely welcome the community to hold us to the commitment of transparency, the rigorous monitoring, and usage of funds, and the development process of all aspects within the VeChain Foundation.

    The report structure is as follows:

    1. VET Supply Overview
    2. VeChain Foundation Expenditure (use of proceeds)
    3. Notes
      i) Enterprise Investor Pool
      ii) Co-Founders, Development Team
      iii) The Operation, Technological Research and Development
      iv) Business Development
      v) Compliance & Legal
      vi) Ecosystem Development

    1. VET Supply Overview

    To continuously improve the financial reports and accurately reflect the VET distribution, we decided to breakdown the VET Circulating Supply and Soft-lockups. In the previous financial reports, the soft-lockup was contained in the Circulating Supply, however, this portion was not moved to the market during the reporting period. The soft-lockup categories are as follows:

    • Authority Masternode collateral — each Authority Masternode keeps at least 25 million VETs

    • X Nodes staking — each X node keeps a minimum amount of VET based on four different tiers

    • Economic Nodes staking — each economic node keeps a minimum amount of VET based on three different tiers

    • Team Lockup — According to the whitepaper 5% of the total VET supply is allocated to co-founders and development team, and this pool is released quarterly over a two year period. However, the executive team as well as part of the team members have been voluntarily locking their allocated tokens to show the commitment to VeChain’s long term success.

    Note: The VET total supply on the VeChainThor Blockchain is 86,712,634,466.

    2. VeChain Foundation Expenditure (use of proceeds)

    We summarized below the USD value of the expenditure in fiat or BTC/ETH for the reporting period. For the spending in BTC or ETH, the USD value was booked based on the rate when the transaction occurred. In many situations, our service providers and partners prefer to receive VET as direct payment or investment compared to using fiat or BTC/ETH. Therefore, the total expenditure for operation, technological and business development comprises a combination of direct VET payment and use of proceeds (fiat, BTC/ETH) depending on the associated parties’ preference.

    The expenditure of this period increased as we held the first VeChain Summit on April 18 at San Francisco and officially released ToolChain.

    3. Notes

    i) Enterprise Investor Pool

    As the crypto market rebounded at this period, quite a few venture capitals initiated contact with us. We continued evaluating the offerings on hand and are looking for institutional partners who could bring fundamental change, or value, to the long term development of the ecosystem. While most of our business partners acquire VETs on the open market, 50 million VET were purchased from this pool by our strategic institutional partners who are looking at holding the VET for their long term purposes.

    ii) Co-Founders, Development Team

    In this period, the Foundation distributed 510 million VET as seventh quarterly rewards to the team. During this reporting period, 3 full-time employees joined us in VeResearch, project management and product team. As we are getting closer to the one year anniversary of the VeChainThor mainnet launch, under the leadership of Flora Wang, our Chief Human Resources Officer, we have been continuously optimizing the performance review and incentive program to support the long term success of the project.
    Same as previous periods, the executive team will continue locking up 100% of their rewards gained in this period. In addition, part of the team members opted to lock up their allocated token to show the commitment to VeChain’s long term success. In total, out of the portion allocated to the team in this quarter, about 373 million VET was locked up voluntarily after being released from the Foundation reserve.

    iii) The Operation, Technological Research and Development

    During this period and especially in the VeChain Summit, several products were announced to the public, highlighting our achievements and development.

    • At the first VeChain Summit, themed as “Creating Valuable Transactions”, we unveiled multiple one-stop enterprise-level blockchain solutions such as VeChain ToolChain, HSM Based Key Escrow Turnkey Solution, and VeKey Based Threshold Signature Turnkey Solution. The launch of these solutions will further VeChain’s effort to facilitate the digital transformation of the real economy.

    • We also announced VeChainWorld which includes an application hub, developer information center, and developer forum. With the launch of VeChainWorld, users and developers will have a one-stop source to find applications and useful information relating to VeChain, and even communicate with other ecosystem builders.

    • The VeChainThor Wallet v1.4 was released during this period. We have added the VeChain Application Browser so that users can access VeChain Applications on the go, as most people prefer to access applications on their smartphones than desktops.

    • VIP191 — designated gas payer, a critical technical improvement to the multi-party payment protocol was introduced to further enhance the dApp user onboarding experience.

    iv) Business Development

    On April 18, the first VeChain Summit was successfully held in San Francisco. In attendance of the VeChain summit were business service providers representing clients which amounted to over 100,000 globally, covering the vast majority of Fortune 2000 companies. The conference boasted over 350 developers and scholars, over 50 business decision makers, government officials, and investors from all over the world.

    VeChain team also managed to sign a few renowned partnerships which will lead to more enterprise blockchain applications on the mainnet.

    During this period, Deloitte Blockchain EMEA Blockchain Lab opted to migrate DNV GL’s blockchain solution, which secures the certificate issuance process for business assurance, from Ethereum to VeChainThor blockchain.

    Announced partnerships and collaborations (Feb 2019 — Apr 2019 )

    • Reebonz Holding Limited (Feb 28)

    • Haier (Apr 1)

    • Norway in a Box (Apr 😎

    Highlights from the community and marketing events (Feb 2019 — Apr 2019)

    • Sunny Lu delivered a speech of “Next Decade — Blockchain Development” at “Who’s the prophet” hosted by ChainDD (Feb 7)

    • Sunny Lu attended the “Emerging Tech Exchange at the AT&T Pro-Am” hosted by PwC, and shared observations and opinions on the integration of business and blockchain technology (Feb 😎

    • Mystory™, DNV GL and VeChain cooperation project, was featured in a news segment on Rai-Radiotelevisione Italiana channel 1 (Feb 19)

    • General Manager of SE Asia & Australasia, Sarah Nabaa attended “Japan-Singapore Partnership Programme for the 21st Century”, and delivered a speech of “Next Decade — Driven by Business Value” (Feb 22)

    • Sunny Lu and Renato Grottola, member of VeChain Foundation Steering Committee and senior vice president of DNV GL were interviewed by Le Fonti, a live streaming television on the growth of Blockchain technology and its impact on business (Mar 6)

    • VeChain US country manager, Jason Rockwood attended the sixth MIT Bitcoin Expo, and was interviewed by CryptoLiveLeak on VeChain’s IoT solutions, the very first VeChain summit and business cases (Mar 10)

    • Sunny Lu attended OceanEx’s meetup at Amsterdam, Netherlands, and shared his opinion on blockchain technology (Mar 13)

    • Kevin Feng attended the blockchain & fund matchmaking hosted by Fenbushi Capital, and delivered a speech of “Blockchain Applications Enable the Real Economy” (Mar 14)

    • Kevin Feng attended the Innovation Hub Salon adopting the theme “Blockchain Today” hosted by ThirdBridge, and delivered a speech of “The present status and trend of public blockchain” (Mar 15)

    • Sunny Lu attended the opening ceremony of DNV GL artificial intelligence research center in Shanghai, and delivered a speech on the cooperation in blockchain ecosystem and business application between DNV GL and VeChain (Mar 18)

    • VeChain US country manager, Jason Rockwood was interviewed by Go CrptoWise on community’s value to VeChain (Mar 25)

    • VeChain was awarded as the most influential public blockchain in 2018 jointly issued by Mars Finance, Consensus Lab and VBLOCK (Mar 28)

    • Sunny Lu attended SUM 03 summitt, and share his opinion on blockchain development, how blockchain will affect the world and our daily life (Apr 6)

    • Sunny Lu attended the 68th meeting of the United Nations Economic Commission for Europe and shared his opinion on how blockchain’s role in the city sustainable development (Apr 10)

    • The very first VeChain summit held at Ford Mason (Apr 18)

    • General Manager of SE Asia & Australasia, Sarah Nabaa attended “ACCA Smart Finance Series” jointly hosted by ACCA, PwC, Insead EMI, and introduced the MyStory™, DNV GL and VeChain cooperation project (Apr 23)

    • VerifyCar, BMW and VeChain cooperation project, was featured in a news segment on Cointelegraph (Apr 30)

    v) Compliance & Legal

    During the launch of the VeChain ToolChain, we engaged legal, cybersecurity and privacy experts to perform risk assessments, to make sure that the solution is ready for commercial usage, up to industry standards and also able to address concerns from business clients and users. As usual, before releasing the VeChainThor wallet v1.4 update, we engaged SlowMist to audit the security of the added functions.

    vi) Ecosystem Development

    During this period we had our first successful VeChain Application Development Challenge. The development challenge aids our desire to enable developers and startups in the ecosystem to create valuable transactions. 22 applications built on the VeChainThor blockchain were submitted for the challenge in the categories of business, social media, entertainment, utilities, and finance, and finally 9 applications were picked as the winners of the challenge. For details please refer to Winners of the First VeChain Application Development Challenge.


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