Inspired by the Talk of Sunny Lu — CEO and Founder of VeChain at Draper University
By Jean-Loïck Michaux
Sunny Lu, Draper University, Spring 2019
The Spring 2019 cohort was pleasantly surprised when renowned entrepreneur Sunny Lu, @sunshinelu24 walked in the doors of Draper University during our 5-week blockchain pre-accelerator in Silicon Valley. Sunny taught us that VeChain Foundation is the blockchain with the highest amount of real world use cases in the market; they are ahead of other infrastructure protocols like Ethereum, EOS, Holo Chain, Tron, NEO, Qtum, or even Walton Chain. Today, VeChain (VET) is ranked 25 on CoinMarketCap with $378MM of market capitalisation. In September 2018, VET reached $1 billion valuation — in crypto jargon we call it a “crypto-unicorn”. But what is Sunny’s magic sauce behind VET’s success? In this article, I write about VeChain’s governance model and list four real business cases currently working on top of Ve Chain’s blockchain.
VeChain’s governance mechanism is better suited for mass adoption because it is a public permission blockchain which ensures a better equilibrium between decentralization and security. VeChain doesn’t believe in 100% decentralization. Sunny said: “For mass adoption, we need better governance between centralization and decentralization. You want the community to vote for big decisions like voting if the CEO should stay in or out. But the execution should be centralized with a committee of about 7 people. The governance should have room to upgrade the economic and consensus model. Bitcoin has the same governance for 10 years. The more people using the network, the higher you pay in transaction fees because of BTC’s higher price. VeChain fractured their token-economics to avoid that. Fees are being paid in VTHO while VET is the governance token.” On top of that, it will allow the use of meta transactions: Do not worry about crypto, you can pay in fiat money and it will translate in crypto-currency in real time.
VeChain is the blockchain that has the biggest amount of real world business use cases. They focus on real entreprises. The management and vision is clear around that. According to Mr. Lu: “Blockchain adoption has to be driven by enterprises, it has to provide business friendly features… We need more people who think from a business owner point-of-view, blockchain is just a tool. If it’s not generating value for business. Why should we use it? With VeChain, companies can build their own consensus mechanism. It allows businesses and startups to have their own blockchain modules”. During the presentation, Sunny highlighted several examples and use cases VeChain is currently being used for and here is a handful of them:
BMW is one of VeChain customers. VeChain is part of the BMW Startup Garage program which is helping the prestigious car brand to stay on top of the latest trend in technology innovation to be applied in their vehicles. They are on NDA and nothing more can be revealed at this stage. My personal guess will be around creating a network of smart cars that can communicate with each other in an autonomous matter and pay each other with a BMW tokens? Who knows? Let’s see…
H&M: Customers can scan a barcode with the VeChain iOS or Android mobile app in the H&M store and see where the clothes were produced before to make their purchasing decision. How cool? You can make sure that the clothes you are buying aren’t produced by child slavery or human trafficking. Of course at the condition that the data inserted is verified.
Deloitte: Selling blockchain as-a-service to corporations and startups. Deloitte is using VeChain to sell BAAS solutions to all kinds of businesses.
Last but not least, VeChain is building an infrastructure to reward people to decarbonize the planet with crypto-currencies. Their goal is even to apply the same methods to rewards people to solve the sustainable development goals from the United Nations. A personal passion of mine.
In conclusion, according to Sunny Lu, blockchain will change the world just like the internet did. It will grow in a similar pattern. We should be at about 3 or 4% of total market size to what it will be. In 2018, the Japanese government issued 17 crypto exchanges licenses while the SEC is still trying to find their way in. According to Sunny: “For mass adoption, my mom will have to be able to use a blockchain wallet just like she is able to use AliPay or WeChat. We can learn a lot from them for mass adoption.” Indeed, that is VeChain’s goal, to create business value and allow this great technology to unleash all the potential it promised the world until now.