Vechain Financial Report Q4 2022

With the purpose of fostering transparent communication on our expenses, accomplishments and push to create tangible economic value using blockchain technology, vechain hereby presents the nineteenth Financial Executive Report covering the period from October 2022 through end December 2022.

As always, we welcome the community to hold us to the commitment of transparency, including, but not limited to, the rigorous monitoring and usage of our funds, and oversight of the growth of vechain and development of the VechainThor public blockchain.

Turning Tides

With 2023 beckoning, vechain ended 2022 with strong momentum. Looking to the year ahead, a jam-packed agenda, comprehensive technical roadmap and exciting plans in the works promised to ignite a new chapter for vechain. With crypto market conditions peaking in negative intensity around this time, we tentatively consider the worst to be behind us, ending the quarter on very strong financial footings.

As always, vechain remains vigilant about the evolving global regulatory situation and continues to proactively take steps to adapt, mitigate and lead in blockchain compliance. We ended 2022 with large reserves of stablecoins and significant holdings in VET, ETH and BTC, guaranteeing many years of financial runway as we inevitably return to growth conditions in the years ahead.

Below, we explore developments and activities that took place in Q4 2022, providing oversight of vechain’s expenditures in fulfilment of our obligations to our community and stakeholders.

Balance Sheet

The balance sheet shows the total value of tokens held by vechain, denominated in US Dollar value.

Towards the end of Q4, the fair value total asset in USD was recorded at 275 million, indicating a 30.68% decline from Q3. This dip was primarily attributed to the prevailing crypto market situation. Despite the unexpected black swan event that occurred in November, vechain remained steadfast in its mission. The foundation expanded its developer team size in the Dublin Tech Center and continued to build more, demonstrating its commitment to growth and development.

P/L Sheet (Total Expenses）

The P/L sheet covers all spending categories and provides an income statement (P/L), a financial statement that summarises the revenues, cost and expenses incurred.

Note: ‘Paid in Token’ refers to an instance where a client was willing to accept payment in VET, a sign of confidence and faith in the value of VET as a utility token.

Marketing Expenses

One of the main marketing expenses in Q4 was the sponsorship fees paid by the vechain. The foundation sponsored several high-profile events and organisations, including the UFC and ATP, which required significant financial investment. Additionally, the foundation sponsored several universities, demonstrating its commitment to education and research in the blockchain space.

As part of the scope of partnership with Boston Consulting Group (BCG) vechain utilised consulting services for sustainability projects which came with an associated cost. Importantly, the release of the whitepaper was only the first step in our partnership with BCG. Vechain together with BCG will be actively seeking business development opportunities for both business-to-business and business-to-customer applications moving forward. The partnership with BCG provides vechain access to a vast network of potential clients and partners, which it plans to leverage in the coming months.

While these marketing expenses were significant, they were necessary for vechain to continue to grow and expand its reach. As the blockchain industry becomes more competitive, it is essential for vechain to establish its brand and reputation as a leader in the space.

Vechain also plans to participate in more industry events to demonstrate the best application scenarios of blockchain technology in the ESG-related digitisation process. By showcasing the potential of blockchain technology in this area, vechain hopes to attract more clients and establish itself as the leader in sustainable and environmentally responsible blockchain solutions.

Tech Expenses

Vechain has made significant investments in technology during Q4 2022, in addition to marketing expenses. The foundation acknowledges that a larger developer team is imperative to develop high-quality products with enhanced security, including internal and external audits of foundation tech products. As a result, there has been a noticeable increase in regular tech-ops and tech-infra expenses.

Vechain’s technical roadmap reflects its dedication to technology, with plans to develop wallets, Vevote, VORJ, bridges, tools and many other products. To achieve these goals, the foundation must invest in research and development, as well as provide ongoing maintenance and support. Vechain understands the importance of staying competitive in the industry and delivering superior products to clients, which necessitates continued investment in technology.

Compliance expenses

The advancements in science and technology have prompted several enterprises to embrace novel technologies like ChatGPT, which is an AI-based application. Blockchain technology also holds immense potential for application, and vechain is leading the way in its development. However, this year, the industry has faced scrutiny and obstacles concerning compliance. In response, vechain has taken the initiative to collaborate with leading consulting firms and entities to tackle the issue. The compliance requirements encompass various domains, including finance, law, cybersecurity, and data protection. Vechain is committed to addressing these challenges and ensuring industry-wide compliance.

The current macro-environment demands a strong emphasis on compliance, and vechain has taken note of this. Vechain is committed to meeting these requirements and investing in compliance-related expenses such as legal and accounting fees are essential. Additionally, staff members undergo regular training and education to stay updated on compliance regulations.

This commitment to compliance not only ensures that vechain operates within legal boundaries but also helps attract high-profile clients who seek these attributes in blockchain partners. As a result, vechain is poised to emerge as a leader in the industry, continuing to set benchmarks for others to follow.

About vechain

Vechain, headquartered in San Marino, Europe, is the curator of VechainThor, a world leading smart contract platform spearheading the real world adoption of blockchain technology.

Through leveraging the capabilities of ‘trustless’ data (information without intermediaries), smart contracts and IoT technologies, VechainThor has enabled solutions across a wide array of fields. Vechain now turns its attention to the greatest challenge of all — building digital ecosystems to drive sustainability and digital transformation at global scale.

Visit https://www.vechain.org to learn more.