When it comes to blockchain governance, VeChain has established itself as a leader in the industry

The project's governance model is structured in a simplified yet sophisticated way, making it easy for users to understand while also providing the necessary flexibility to adapt to changing circumstances.

VeChain Foundation

The VeChain Foundation is responsible for the governance of the VeChainThor blockchain. The foundation is guided by the VeChain Advisory Board, which is composed of stakeholders with voting authority.

These stakeholders include VeChain's development team, the VeChain Foundation, and community members. Together, they work to upgrade different aspects of the VeChainThor Blockchain and ecosystem.

4 types of VIPs (VeChain Improvement Proposals)

There are four types of VIPs (VeChain Improvement Proposals) that can be proposed:

• Core
• Application
• Interface
• Information

Core VIPs involve improvements requiring a consensus fork, while Application VIPs involve changes to application-level standards and conventions. Interface VIPs cover improvements around client API specifications and language-level standards, and Information VIPs describe design issues and provide general information to the community.

Flexible Governance

VeChain's flexible governance structure is essential for the long-term success of the project. The blockchain and ecosystem are constantly changing, and such forms of adaptation are crucial in light of various factors such as changing global market conditions and evolving business partnerships.

At the heart of VeChain's governance model is the VET coin. This cryptocurrency drives the VeChainThor blockchain ecosystem and plays a vital role in the project's governance structure. Based on the amount of VET collateralized, each main node type is given a specific and proportional number of votes that can be used to impact the overall strategic direction of the VeChain project.

VeChain's Tiered Governance System

The VeChainThor blockchain utilizes a Proof-of-Authority (PoA) consensus mechanism, with Authority Masternodes (AMs) maintaining network balance. Each transaction on the network is validated through AMs, which are network-connected servers that keep a complete copy of the blockchain. AMs are needed for the on-chain pre-approval of entities that can interact with VeChainThor, and they also produce blocks on the VeChainThor blockchain.

VeChain has a tiered governance system, with different nodes having varying levels of authority. Economic X Nodes (XNs) have 40% voting power and are split into four different tiers based on the amount of VET collateralized. Economic Nodes (ENs) have 20% of the voting power and are divided into three different tiers. Authority Nodes (ANs) have 0% voting power but are still an important part of the network.

The VeChain Foundation oversees the VeChainThor blockchain's governance, with the Steering Committee Board being the project's most important governing body. The board is selected by stakeholders with voting authority (via different types of nodes) and is made up of VeChain Foundation members, Authority Masternode holders, developers, business partners, and independent members.

Functional Committees and VeChain Improvement Proposals (VIPs)

There are five major committees that operate within the VeChain Foundation, with each committee appointed a chair to run the specific operational unit.

These committees include the Technical Committee, Operational Committee, Regulation Committee, Compensation and Nomination Committee, and Public Relations Committee.

The Technical Committee is responsible for the research and development and technical support units, while the Operational Committee covers the finance, human resources, and administrative units.

The Regulation Committee handles legal and compliance, and the Compensation and Nomination Committee is responsible for compensation and nomination. The Public Relations Committee focuses on marketing, public relations, and business collaboration.


To address specific fundamental challenges within the VeChain Foundation, voting is required by committee members.

This voting system ensures that the VeChainThor blockchain and the VeChain ecosystem continue to operate in a way that is balanced and adaptable to changing circumstances.

References:

VeChainThor’s Blockchain Governance via VET Coin | Gemini. (n.d.). Retrieved from https://www.gemini.com/cryptopedia/vechain-vet-coin-vechainthor-governance

elegant_solution. (n.d.). Retrieved January 13, 2024, from https://www.freepik.com/author/user28432665

Freepik - Goodstudiominsk. (n.d.). Retrieved January 5, 2024, from https://www.freepik.com/author/goodstudiominsk

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