VeChain (VET) is another ‘dinosaur coin’ that aims to reinvent itself during the 2024 bull market. VET traded closer to its yearly highs after announcing the Renaissance Initiative with revamped tokenomics. 

VeChain presented its Renaissance Initiative, with renewed tokenomics and reward incentives. The announcement gave another boost to the native VET token, which trades toward its higher range for 2024. 

VeChain will retain its double-token model, where VET is the main asset and VTHO is used to pay for transaction fees. However, earning VTHO will now be tied to active on-chain behaviors, instead of passively holding VET. Previously, VTHO was minted at a fixed rate for any passive holder of VET. 

VeChain accrued more than 4.5M known wallets, while also growing its node ecosystem. | Source: VeChain Stats

VTHO ownership will become a key role in the ecosystem while incentivizing more VET holding and staking for validators and node owners. 

This incentive structure meant long-term holders or exchanges earned VTHO but had little need for the gas payment token. The new structure will reward active users, developers, as well as network validators. After the Renaissance update, VeChain will decrease the production of VTHO and will reappoint the token to the most active users. 

VTHO will be rewarded to validators, the operators of X-Nodes or Economic nodes, as well as project developers. Those groups will be identified and rewarded, instead of producing VTHO based on any kind of VET ownership. Staking will also increase the share of VTHO earned. 

VeChain to overhaul validator structure

VeChain will also overhaul its node and validator structure. Validators will now have no limit to their staked VET, to encourage more locked tokens. 

Owners of X nodes and Economic nodes will also be able to stake their VET with one of the 101 large-scale validators. 

VeChain will also introduce a new type of node, to encourage new entrants. The new tier will be part of the Economic nodes and will require a stake under the current 1M VET stake. 

After overhauling VTHO incentives, VeChain will also introduce variable fees, which will adjust during periods of network congestion. 

Can VET regain its peak valuation?

VET traded above $0.06, with the highest volumes in 2024 so far. VET returned to price levels not seen since before the 2022 market crash. 

VET peaked above $0.22 during the 2021 bull market and has since gone through significant drawdowns and price stagnation as low as $0.01. VET trading is yet to break above $100M in open interest, lagging behind other older altcoins and tokens. 

The most attractive feature of VET for traders is its years-long accumulation, followed by a steep rally. In the case of a sustained altcoin market, VET may add to its gains. The tokenomics overhaul drew attention to the asset, though with limited immediate price action.

VeChain has also lagged behind other trends, as it is not widely used as an L1 network for building apps. VeChain has also lagged in the creation of Web3 products, instead focusing on its partners and their varied business models. 

VET has underperformed in past years, as it has been obscured by more actively promoted projects. However, VET remains a highly liquid token, with listings on Binance, Coinbase, Bithumb, and other top exchanges. The asset may recover as it remains a staple among the top 50 coins and tokens. VeChain is also tracked by Grayscale as a project under consideration. 

VET was another one of the ‘dinosaur coins’ to rally in 2024, after going through several bull and bear cycles. VET has already gone through one token swap, doing a 1:100 token split to better reflect the asset’s utility. 

VeChain has been around since 2015, aiming for organic growth and partnerships with real-world businesses. VeChain tried to join the NFT trend via VeSea, but the marketplace is no longer active. 

The project focuses on QR codes and RFID chip tracking while connecting physical products to its native blockchain. Despite the Web3 trend and DeFi, VeChain did not develop the same tools as other projects and is not considered a competitor among L1 networks.

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