What Is VTHO Crypto and Is It a Good Investment?

Published: April 18, 2024 | Last Updated: April 21, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

In this post, I will explain what VeChain’s VTHO crypto token is and what it does. Next, I will score it across four different dimensions (team, product, tokenomics, and momentum) to decide whether it is a good investment or not

What is VTHO crypto? 

The VeThor token (VTHO) is used to pay transaction fees on the VeChainThor blockchain. It does not have a fixed supply and its existence is tied to that of VeChain’s native token, VET.

The VeChain token (VET) is used as a medium of exchange on the VeChainThor blockchain for smart contract transactions. It has a circulating supply of 73Mn and a maximum supply of 87Mn VET

The founders of VeChainThor designed this dual system because they wanted transaction fees to remain low and not be dependent on cryptocurrency market speculation. 

Because supply is unlimited VeChain can ensure that the VTHO price does not increase too much.

The bottom line is that investors should consider the VET token when deciding whether they consider the VeChain ecosystem valuable. VTHO

What is the relationship between VTHO and VET? 

The relationship between VTHO and VET is governed by a set of formulas. The parameters of these formulas could be changed in the future. At the time of writing, they are as follows

Firstly, Out of the VTHO that is used to pay blockchain transaction fees 70% is burned and 30% is given as a reward to the master node that added the block. 

Secondly, VTHO coins are rewarded to VET coin holders according to a formula that you can find here. For example, if you held 10,000 VET you would be rewarded with 4.32 VTHO every day. 

What is VeChainThor? 

VeChainThor or VeChain is a blockchain that wants to bring transparency to supply chains. Logging supply chain-related data to a blockchain makes it impossible to tamper with. VeChain was spearheaded by Sunny Lu the former CIO of Louis Vuitton in China. In 2017, after seeing how large a problem counterfeiting was he saw an opportunity in the newly emerging blockchain technologies. 

VeChain is one of the most impressive blockchains in terms of companies using its technology and partnerships. BMW,  Renault, PWC, Louis Vuitton, Bayer, DHL, and DNV are just some of the partners. It has also partnered with the government of China for carbon credits. 

The best way to understand VeChain is to read my article: What is VeChain?

How does the VeChain crypto blockchain work

The VeChainThor platform was originally launched on the Ethereum blockchain but the team soon decided to build its own blockchain given the high transaction costs on Ethereum. VeChain uses a consensus mechanism known as Proof of Authority in which authority masternodes validate transactions and confirm blocks. This is not a decentralized model. It is very much centralized but when it comes to supply chain management this is not such a big issue. When companies care about that authority nodes are trustworthy entities that will monitor their supply chains. 

Is VTHO a good investment? 

Team        

1. Are the founders legit with related experience?     ✔️    

The team is of high caliber. Sunny Lu who launched VeChain was the Chief Information Officer of LVMH. Jay Zhang – CFO has 14 years at big accounting firms. Kevin Feng – COO has over 12 years of consulting experience. You can find more info on the VeChain team here.

2. Have they built Web 3 projects before?    ✔️    

Yes

3. Did they do an exit?    ✔️    

Yes

4. Can you find legit profiles on LinkedIn?    ✔️    

Yes

5. Did they raise funds?    ✔️    

Investors include  Breyer Capital, Draper Dragon, and Draper Venture Network. DNV GL and PwC are the most recent investors.

6. How long have they been around?    ✔️    

Launched in 2014.

7. Public appearances through Interviews/podcasts    ✔️    

Yes you can easily find podcasts etc

Overall team score        100%

Product        

1. Is it easy to understand what they do?     ✔️    

Yes

2. What is it?    –    

A blockchain for supply chain management

3. Is there a demand for their product?     ✔️    

Yes counterfeit goods are the biggest fraudulent activity

4. Is there a use case?    ✔️

Yes bring transparency to supply chains

5. How big is the market?    ✔️

It is big. For example, counterfeiting is worth 600Bn per year. 

6. Is it being used?     ✔️

Yes large players such as BMW, and LVHM are using it

7. Github activity    –    N/A

8. Has the product launched?    ✔️

Yes you can use it

9. Does it have a strategic moat?     ✔️

It’s got a first-mover advantage since it’s been around since 2014

10. Is it focused?    ❌

No, it wants to build an ecosystem of dApps around itself and NFTs, etc

11. Is the website easy to understand for non-crypto visitors?    ✔️

I’ll say yes though you probably need to understand some blockchain basics

12. Do they have a proof of concept?    ✔️    

Product is live

13. Is the UX good?     ❌    

N/A

14. Is it already being done?     –    

No

15. At what stage is the product?     –    

Live

16. How does it create value?     –    

Allows anyone to track supply chain data and ensure that it is reliable

17. How does the project generate revenue?    –

VeChain company charges for consulting services and tech solutions

Overall product score        95%

Tokenomics        

1. Why is the coin valuable?    ✔️

VTHO is used to pay transaction fees. VET is the native utility token and medium of exchange on the VeChain blockchain

2. Did they do a pre-mine?    –    

9% to private investors and 5% to founders and developers

3. Is supply fixed or inflationary?    –    

VET is fixed at 87Mn. VTHO has no cap

4. Was it a fair launch    –    

No there was a private sale

5. Circulating/total supply    ✔️    

84%

6. Token release schedule    ✔️    

All tokens have vested already

7. Are there incentives to reduce or lock supply?    ✔️

There is no staking in the traditional sense but if you move your VET to a VeChain wallet you earn VTHO

8. How many tokens    ✔️

VTHO and VET which makes things confusing at first

9. How much upside is left: market cap vs industry size    ✔️    

$2.7Bn vs Billions

10. Is it listed on major exchanges    –    

Yes it is listed on tier-1 crypto exchanges

Overall tokenomics score        95%

Momentum        

1. Is it trending on social media?    ✔️

VTHO has been picking up traction in 2024 but does not dominate social media. VET has increased in social dominance.

2. Is the market cap low compared to similar projects?    ❌    

No, it’s pretty high for VET

3. What is the crypto market like?     ✔️

In the middle of a bull run

4. What is the sentiment for the sector this crypto focuses on    ❌    

It’s not RWA, AI, or Gaming

Overall momentum score        40%

Bottom line

Given that VTHO are used as gas tokens and have unlimited supply they won’t make a good investment. The VeChain Foundation hopes to ensure that VTHO prices remain low or stable which does not leave much room for speculation. VTHO’s current market cap is at about 222 million. 

Please keep in mind that this is not financial advice and make sure to do your own research. 

Is VET a good investment

VET on the other hand has excellent fundamentals with a strong team and promising product. It also has a high circulating supply and momentum on social media. My only concern is how much more it can grow and whether I should put my money on it or on other projects that are trending narratives and have higher reward potential. 

FAQs

Can VeThor reach a dollar?

At the time of writing the price of VTHO is $0.003. Since the purpose of VTHO is to keep transaction fees low it is highly unlikely that VTHO will go to a dollar. 

Does VeThor have a future?

VTHO will continue to be used as a way to pay for gas fees on the VeChain network. However, with an unlimited supply and mandate to keep gas prices low, it is not a good investment

What is VeThor’s all-time high?

VTHO’s higher price was $0.0385 which was the going market rate as soon as it launched. In April 2021 it hit a local all-time high of $0.025. 

What is the difference between VeChain and VeThor?

The VeChain token (VET) is the native utility token of the Vechain blockchain. It is used as a means to send value within the Vechain blockchain network. VeThor (VTHO) tokens on the other hand are used to pay for transaction fees to reward authority masternode operators for verifying transactions and adding a new block. 

How do you earn VeThor?

The only thing you need to do to earn VeThor is to hold VET. Holding VET will automatically allow you to accrue VTHOR according to a predetermined formula which currently works out to 0.04% per day. 

Why is VeChain so important?

The VeChain platform is a public blockchain that allows anyone to check the status of supply chain-related data. Want to know if this is an original Louis Vuitton bag? Done. Want to know what temperature your meat was exposed to? DONE. Want to measure mechanical faults in your car model? Done. Blockchain technology ensures transparent supply chains. 

Up next

What is VeChain? A 9 Minute Read to Set You Straight

what is vechain

So I found the following interesting nugget of information last week: what do you think is the largest type of organized crime? Read my explainer about VeChain to find out.

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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