VeChain Financial Executive Report Vol. 6

We are excited to present the sixth VeChain Foundation Financial Executive Report. This financial report covers November 2018 through January 2019. In this period, we reflected on the achievements of 2018 and envisioned the exciting things down the line in 2019. The VeChainThor platform stayed vibrant and achieved significant progress in supporting the long-term growth of the ecosystem.

As advised by our professional financial service provider, starting from 2019 we will restructure the contents of the quarterly financial executive report to make the information more clear and streamlined. 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 new 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

The VET total supply on the VeChainThor Blockchain is 86,712,634,466. As of Jan 31, 2019, the VET circulating amount is 60,231,133,910 which accounts for roughly 69% of the total supply. The VET circulating supply increased by roughly 2% since the previous quarterly financial report.

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. We continue to see many situations where clients, and potential partners, inquire about the option to acquire goods services and the opportunity to fund/invest in technology with VET 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.

3. Notes

i) Enterprise Investor Pool

While during this reporting period the crypto market touched the lowest point since the hype at the end of 2017, quite a few venture capitals actually see this as a good entry point into this space. 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 627 million VET as sixth quarterly rewards to the team. While many projects shrank the team in the bear market, VeChain took this opportunity to recruit more talent to expand and optimize the team. During this reporting period, 11 full-time employees joined us in tech, operation, project management and product teams, including new official members in Europe and the USA. Same as 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.

iii) The Operation, Technological Research and Development

As stated in the 2019 outlook, we have been focusing on enabling the developer community by promoting the VeChainThor Blockchain features and building tools to facilitate the application development in the ecosystem. The development team spent months developing the New Sync, a VeChain application browser and Connex, a newly defined standard interface connecting dApps with the VeChainThor Blockchain and users. With the New Sync and Connex, users can now seamlessly access applications built on the VeChainThor Blockchain. We are also delighted to see the contribution from community developers — the launch of Comet and CometVerse by Totient Labs set a good example of how developers could frictionlessly on-board users who were never involved in crypto.

Also, following the VIP 180 — fungible token standard, we published VIP 181- non-fungible token standard for developers to follow and create non-fungible tokens on the VeChainThor Blockchain. As an ideal scenario to implement the VIP 181 NFT standard, we tokenized the status of VeChainThor Economic (X) Nodes and allowed any third party developer to integrate the VeChainThor Node tokens.

Economic Nodes Reward Pool Change — as stipulated in the whitepaper section 3.6, the VTHO reward pool for economic nodes reduces by 2.5 billion VET every six months from the start of node monitoring (i.e. Sept 1 2018). The first reduction occurred at noon UTC+8, March 1, 2019 and returned to the Foundation’s reserved pool for business development, operations and R&D.

iv) 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 mainnet. VeChain was invited to the first ever China International Import Expo alongside DNV GL, and showcased solutions such as cold-chain logistics, supply chain management and digital carbon ecosystem. We were also very excited to see the launch of MyStory, the first public blockchain based enterprise application launched by a 150-year-old professional service firm, DNV GL, to disrupt its third-party assurance service model.

Announced partnerships and collaborations (Nov, 2018 — Jan 2019 )

  • Invest Cyprus (Nov 2)
  • Fuji MARUMO Tea Garden (Dec 5)
  • MIT Media Lab (Dec 6)
  • Baijieteng Technology Corporation(Dec 26)

Highlights from the community and marketing events (Nov, 2018 — Jan 2019)

  • VeChain released Technical Deep Dive Season 2 and 3 (Nov 3)
  • VeChain showcased multiple blockchain solutions at the First Inaugural China International Import Expo alongside DNV GL (Nov 5)
  • Sunny Lu attended the launch ceremony of “Bright Code” Platform (Nov 10)
  • Sunny Lu attended the “blockchain technology” seminar with Dan Noneh, Stanford University professor, at the “2018 Future Science Awards Ceremony and F2 Science Summit” (Nov 17)
  • Netease interviewed Sunny Lu on the blockchain development and community governance (Nov 19)
  • VeChain General Counsel Scott Brisbin accepted the “Global Scaling Award” issued by Draper Dragon (Nov 20)
  • Mike Zhuang attended the “P.O.D New Block Trend New Trends” Blockchain Summit, and participated in the round table on “how blockchain technology empower real economy” (Nov 28)
  • Kevin Feng delivered a speech of “The future role and development trend of blockchain” at Hong Kong blockchain summit 2018 (Dec 12)
  • VeChain was awarded as the top of the best performed blockchain apps jointly issued by 8BTC and TokenInsight (Jan 4)
  • DNV GL launched MyStory on the VeChainThor blockchain, aiming to build digital trust in the origin of products. Three Italian winemakers are the first to use the blockchain-powered digital assurance solution (Jan 11)
  • VeChain was selected as “the most valuable commercial application in 2018” by the Cointime (Jan 18)
  • Sunny Lu attended the live show “Ask me anything” hosted by TokenGazer, and shared observation and opinions on VeChain ecosystem, governance model, blockchain technology development trend, etc (Jan 17)
  • Renato Grottola, member of VeChain Foundation Steering Committee and senior vice president of DNV GL attended the blockchain expert group meeting held by the Italian Ministry of Economic Development to discuss Italy’s national blockchain strategy (Jan 21)
  • General Manager of SE Asia & Australasia, Sarah Nabaa attended the first Binance blockchain week, and made a speech on “The next decade — driven by business value” (Jan 22)
  • The Norwegian delegation visited VeChain for an in-depth look into VeChain progress on technology development, blockchain application (Jan 23)
  • VeChain, together with Logsafer and PICC attended the Belt and Road logistics innovation seminar hosted by Chang Chun International Land Port (CCILP). VeChain Sales Director Yujie gave a speech on the brand new blockchain based insurance model for logistics industry (Jan 30)

v) Compliance & Legal

VeChain continued enhancing our enterprise blockchain solutions to make it ready for commercial usage. We engaged consultants and service providers to perform risk assessment from compliance and financial perspectives, which helped us polish the products. As usual, before releasing the VIP181 NFT standard and VeChainThor node smart contracts, we engaged SlowMist to audit the security of the source code.

vi) Ecosystem Development

VeChain focused on investing in infrastructure solutions and services to make the platform friendlier to the developers. At the same time, VeChain has been actively looking at more ecosystem projects running on the mainnet which choose to raise the majority of their funds in VET.