Transparency, Fairness, Openness
We are excited to present the fifth VeChain Foundation Financial Executive Report. This financial report covers Aug. 2018 through Oct. 2018. In this period we saw a majority of the token swap activities, as well as system initialization and optimization to support the future growth of the platform and ecosystem. We sincerely welcome the community to hold us to this transparency commitment, monitor the use of funds, and development process of all aspects within the VeChain Foundation.
VET Supply Overview
The VET total supply on the VeChainThor Blockchain is 86,712,634,466. By the end of Oct. 2018, the ratio of the circulating VET supply is 67%, which is roughly 2% larger than what was reported in the previous quarterly financial report.
- Enterprise Investors — After the launch of the VeChainThor mainnet, more business players have learned about the comprehensive solutions we provide past our core technology. This has made many investors take a keen interest in VeChain. Adhering to our original vision — building a trust-free and distributed business ecosystem platform to enable transparent information flow, efficient collaboration, and high-speed value transfers, we are looking strictly for strategic enterprise partners who bring fundamental change, or value, to the ecosystem. Comparing with the last period, in which we had settled a few major agreements, the amount acquired in this period, ~166 million VETs is reduced because the team focused the effort on the VeChainThor mainnet launch and migration. Although the overall market had been bearish in this period, VeChain still received a multiple investment offers from renowned institutions and Venture Capitals which we will carefully evaluate and explore in the coming periods.
- Co-Founders, Development Team — In this period, 530 million VETs were distributed as fifth quarterly rewards to the team. The distribution percentage increased slightly in comparison to the last period as the team continues to grow. Eight full-time team members were employed, and five joined the tech team led by our CTO Jianliang Gu. We are also excited to have Flora Wang, Chief Human Resource Officer and Mike Zhuang Chief Strategy Officer join the management team in this period. Same as the previous periods, the executive team will continue locking up 100% of their rewards gained in this period for two years, starting from the moment of distribution.
- Operation, Technological and Business development — The focus of this period was to be laser-focused on the token swap and mainnet launch. During this period we conducted the largest official community reward program ever for our one year anniversary alongside our token swap and X Node binding. We appreciate the support from the community and were pleased to see the token swap and X Node binding progress. In addition to the community reward, the development work towards the VeChainThor Blockchain, documentation and tools, community building and academic and business collaboration did not slow down. We continue to see the situations where we have been presented the option to acquire goods, services and the opportunity to fund/invest in technology with VET compared to using fiat or BTC/ETH. Though we hold VET for situations in which favor its longevity, we value the opportunity to use it as a means to judge the outside markets sentiment. The overall budget for operation, technological and business development comprises a combination of VET, BTC/ETH, and fiat based on the situations in which funds were used. Please refer to the below sections for more detailed activities in this areas.
Token swap update — As of the end of November 2018, approximately 97% of the ERC20 VEN tokens have been sent to an unspendable address and swapped for VET on the VeChainThor Mainnet. We will continue providing the token swap service for the ERC20 VEN token holders who have not swapped their tokens via the VeChainThor Wallet application.
VeChain Foundation Expenditure Details
In the winter of the crypto market, our top priority is to stay stable and continue building. We are under no threat of instability and have both the current finances, and future investment options, to withstand any further downturn in the market. We are seeing incoming cash flow from the enterprise solutions we provide and expect to see an increase in incoming cash flow across different regions such as China, EU and South East Asia as those enterprise solutions are standardized and matured. In addition, we are carefully evaluating a few investment offers which we believe can bring additional funding to the project and at the same time benefit the VeChain Ecosystem.
On the other hand, risk management has always been a critical part of the VeChain Foundation’s governance. Since founding, VeChain has been working with professional service providers to establish robust risk management and finance policies. Our finance and treasury team have been closely monitoring the market, fine-tuning the financial plan and practicing precautions in the management of the proceeds that we raised in the token sale.
To faithfully reflect the expenditure, we internally decided that for this quarterly report we will only report the expenditure in USD due to the high volatility in ETH price.
In general, the expenditure has dropped compared with the last period as the focus of this period was on internal projects around mainnet launch and system initialization. The majority of the ecosystem development investment has been shifted to VET as the new token issuances on the VeChainThor Blockchain raised in VET as funds.
A summary of the expenditure in each category is as below:
Technological Research and Development — In this period, after the secure launch of the VeChainThor mainnet, technological research and development expenditure moderated. The development team continuously improves the blockchain and wallet, creates documentation and tools for third parties such as exchange and wallet providers to integrate VET and VTHO. We kicked off a series of VeChain Technical Deep Dive to introduce the features of VeChainThor blockchain, IoT and encryption, and enterprise blockchain solutions. In addition, the beta version of the VeChain portal with VeVID and Authority Masternode application module was launched.
Business Development — In this period, the VeChain team managed to sign a few renowned partnerships which will lead to more enterprise blockchain applications on the VeChainThor mainnet. During the BYD developer conference in Shenzhen, the Digital Carbon Ecosystem by VeChain and DNV GL was announced, and it was followed by the Signing Ceremony witnessed by His Majesty King Harald V and Her Majesty Queen Sonja of Norway Witnessed the Signing Ceremony in Beijing. As usual, the VeChain Team has been tirelessly engaging in business meetings, attending conferences and giving speeches to form partnerships and raise market awareness. With the mainnet launch, we hope to bring the VeChain Blockchain solutions to a broader audience beyond blockchain and crypto industry and showcase the real-life blockchain solutions on general high tech and industry stages.
Announced partnerships and collaborations (Aug — Oct)
- NTT Docomo (Aug 5)
- People Insurance Company of China (Sept 2)
- BYD (Sept 5)
Highlights from the community and marketing events (Aug — Oct)
- Dr. Peter Zhou was invited by SV Insight to share the concept of the VeChainThor Development Plan and Whitepaper (Aug 1)
- Sarah attended “Open Innovation Platform” event which hosted by Singapore IMDA Info-communications Media Development Authority (Aug 3)
- Sunny Lu presented at BYD’s World Wide Development Conference and the live stream was broadcast on National Brand Program CCTV (Sept 5)
- VeChain and PwC co-organized the blockchain stage at World’s leading startup event — Slush 2018 (Sept 7)
- VeChain official meetup in Amsterdam (Sep 19) and Paris (Sept 21)
- VeChain project director Xinli Tian was invited to BYD Qin Pro new car launch conference (Sept 20)
- VeChain was featured in one of the episodes of “Advancements” with Ted Danson on CNBC (Sept 24)
- VeChain was selected and displayed on the partnership display wall of the DHL APAC innovation center (Oct 10)
- Kevin was invited to “EHS in Supply Chain” conference which hosted by Ministry of Emergency Management of the People’s Republic of China and General Electric Company (Oct 15)
- Introducing the VeChain Technical Deep Dive Series (Oct 15)
- VeChain was invited to Digital Transformation World Forum (Oct 16)
- His Majesty King Harald V and Her Majesty Queen Sonja of Norway Witnessed the Signing Ceremony of “DNV GL — VeChain Digital Carbon Ecosystem” in Beijing (Oct 17)
- Sarah was invited to BMW Executive Innovation Conference (Oct 18)
- VeChain was invited to BMW IT conference 2018 which hosted at BMW headquarters (Oct 24)
- VeChain showcased its traceability solution with the influential Singapore sneaker artist — SBTG (Oct 26)
- VeChain Partners with Shanghai Gas and ENN to Pilot Blockchain-enabled Liquified Natural Gas Solution (Oct 30)
Compliance & Legal — VeChain engaged independent third party to inspect the completeness, accuracy and security controls of the entire token swap process. An independent inspection report with satisfactory results were submitted to the Steering Committee during its quarterly meeting. In addition, VeChain continues to work with service providers to enhance the security of the products such as VeChain Portal and VeChainThor wallet.
Ecosystem Development — In this period, the ecosystem development expenditure in BTC/ETH/fiat has significantly reduced. Since the launch of the VeChainThor mainnet, VeChain has been focusing on investing the ecosystem projects running on the mainnet which raise the majority of their funds in VETs. Therefore, we expect more ecosystem development investment will be reflected in the VET category in the future periods.
We are committed to transparency of the financial status to the community and follow what has been laid out in the VeChain Development Plan to maximize the use of the proceeds and VET holdings to grow the VeChainThor Ecosystem to be the most powerful blockchain platform.