VeChain X Node Token Lockup

On March 6th VeChain launched the X Node Program, a special class of nodes endowed with distinct benefits aiming to reward the early supporters of the VeChain platform. To qualify, token holders must have 6K VET or greater in a trackable wallet by March 20th in order to obtain X Node status.

Key X Node benefits:

  • Significantly more VeThor production than standard nodes
  • Early start of node maturity periods
  • Exclusive participation in VeChain Ecosystem ICO whitelists
  • Official designations to build and represent the community

X Nodes will never be issued again.

The X Node Program has already caused a dramatic reduction in the supply of VET tokens. This sharp reduction in the number of tokens available for sale will create steady upward pressure on price. The next time VET sees a spike in demand we can expect prices to move very quickly.

Reward Pool Lockup

The VeChain Foundation has locked up 50 Million VET to be used as an additional reward pool to generate VeThor for X Node holders.

This reward pool is 5.7% of the total VET supply. Those tokens will never be sold in the marketplace and have essentially been burned.

X Node Lockup

Since the announcement VET tokens have been pouring out of the exchanges and into wallets at a pace of about 2 million tokens per day.

So far, 5498 total wallets qualify for X Node status.

196 Million tokens (41% of circulating supply) have already been locked up in X Node wallets.

Basic Token Economics

Token price reflects the equilibrium between supply and demand. In our case, the significant reduction in supply means we can expect prices to rise as buyers and sellers find a new equilibrium.

I believe the slight rise in price of VET over the past week is only a reflection of the minor uptick in demand as people complete their nodes. True price discovery of the token’s new supply/demand dynamics requires volume and this has not happened yet.

At some point in the near future there will be an event that triggers a spike in demand (exchange listing, partnership etc.). When the volume kicks up buyers will find out very quickly that almost half the sellers aren’t selling and the price will move up very, very fast.

Specific thoughts on price (next 2 weeks)

If demand remains constant, I would expect prices to creep up as the sell side of the order books thin out. With nearly half the tokens locked up a 200–250% increase seems likely. This translates to a price in range of $7.92 to $9.90.

If demand increases, I would expect a 250–500% increase as buyers struggle to find sellers. This translates to a price in the range of $9.90 to $19.80.

Additionally, the increased price reactivity created by the reduced supply could easily trigger a FOMO event with much greater increases. This seems very likely as we approach mainnet launch.