VeChain Foundation Announces New Stablecoin, Could It Create Fresh Demand For VET?

Reynaldo Marquez

3 years ago

2 mins read

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The VeChain Foundation has started 2022 with a potential major announcement. Via their official Twitter handle, the organization hinted at the possible released of a new native stablecoin called VeUSD.

The Foundation little details on this new product but announced its followers that it’ll be “something special (…). Something that will allow us to take VeChainThor to the next level in multiple ways”.

The stablecoin VeUSD will be a tool to “unleash” DeFi capabilities for the VeChain ecosystem. The digital asset, according to the official post, was designed following core principles of this ecosystem: sustainability, versatility, scalability.

The blockchain VeChainThor seemed to have been preparing for these new era of DeFi for a while. As NewsBTC reported, 3 months ago this network was upgraded after a community vote approved the implementation of Proof-of-Authority (PoA) 2.0.

Designed to support a “new wave of blockchain mass adoption”, according to the VeChain Foundation, the update was supposed to mitigate any tradeoffs on the consensus layer for the blockchain VeChainThor. At the time, the organization said:

(…) the VeChain Research and Development teams have been working on a massive upgrade of the VeChainThor blockchain called SURFACE (PoA 2.0), standing for a Secure, Use-case-adaptive, Relatively Fork-free Approach of Chain Extension.

In that sense, VeUSD could become one of the first products to leverage the power of this blockchain post the update.

VeChain’s Own Stablecoin, Potential Benefits And Concerns

The VeChain community celebrated the announcement. Recently, a user called “EffortCapital” proposed the possibility for the Foundation to create an algorithmic stablecoin, such as LUNA with VeThor Energy (VTHO) as collateral.

Thus, creating a burning mechanism, similar to the one introduced in Terra with the Colombus-5 upgrade. This mechanism supports a constant demand for the underlying asset and contributes with its appreciation.

Proposal for #Vechain Foundation to create an algorithmic stablecoin backed by $VTHO seignorage style (like LUNA).

More VUSD demand -> burn VTHO -> value accrual to $VET @PeterZh47977516 @sunshinelu24

— D (@EffortCapital) December 30, 2021

This idea saw interest from Sunny Lu, CEO at VeChain. Via Twitter, he asked the community for a tokenomics design for the potential token.

However, not everyone in the community agrees with a stablecoin as the one announced by the Foundation. Some believe VeUSD could change the dynamics in the ecosystem and replaced VTHO, the utility used to power transactions on this blockchain.

Other straight out said that the Foundation and the blockchain has “failed to fulfill their core products”. The network has been implemented in supply chains, and other corporate sectors, but is has rarely focused on developing a DeFi ecosystem.

This approach seems to be changing, as mentioned, with the new upgrades, the DeFi related products, and the stablecoin. Despite the detractors, most users seem to have taken the announcement as bullish.

The Foundation will share more details in days to come, until then everything remains as speculation. As of press time, VET trades at $0.085 with a 1.95% loss in the past day.

VET VETUSDT VeChain — VET trades to the downside in the 4-hour chart. Source: VETUSDT Tradingview

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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