Hi Profitable Team. Here Yann Darwin. Welcome to the personal finance and investing channel. Today we are in the crypto playlist. I'll tell you the story from A to Z of VeChain, the VeChain project, its founder, what happened, why is it interesting as a project, is it interesting to invest, what are the strengths and weaknesses? Here is the goal of today's video. I'll try to brush you through the whole story from the start and just before we start, an important point to understand I am not a financial advisor, I am not an investment professional I act as an enlightened individual, enlightened investor, my goal here is not to make you stupid, my goal here is not to be like Uncle Jean-Pierre at the half-drunk family meal and say to you "Invest in this worry you believe me". It's quite the opposite. My fight is financial education, it is to do the work that we did not have at school.
My goal is to pass it on and understand what we're doing. This video explains the project, it explains the crypto behind it, it explains the technology and the strengths, but this is by no means investment advice, it will simply allow you to save time on your research, possibly earn money on your research, and I beg you, don't be silly to say "The last one who spoke correctly, he said VeChain was cool so I'm going to invest in it" Invest in it if you think it's worth it for you to invest in it, Weighs the pros and cons and especially on the occasion no all-in, no stupid stuff, we have already seen that in enough videos. What is VeChain? This is the guy who has a good face, guys in cryptos often have good faces. It's Sunny Lu, a Chinese. Sunny Lu, the founder of the VeChain project. This guy's story is quite interesting because it starts from the corporate world.
This guy had a career in corporate, a bit of a good student, he was educated at the University of Shanghai. He had a bachelor's degree in Electronics, Communication and Engineering, therefore electronic communications engineer. He started working for Netstar, an IT company. He comes back to do IT. He developed with this box, at the very beginning of his career, stolen vehicle tracking solutions. They notably had a big market in South Africa, where they developed solutions to find stolen vehicles to return them to their owner, to help the police, law enforcement etc. If I say this, it's not for nothing is that it will be reused later. After Netstar, he went to 3M. 3M, brand that everyone knows, multinational, 3M China. He did IT in this company, after he did a stint at Bacardi, and then later it arrives at Louis Vuitton.
This is extremely important because a lot of things will flow in his head and for the future of Vechain. At Louis Vuitton that I do not present, he is CIO, Chief Information Officer, the father of IT. It's the geek daddy who is the biggest geek with an army of geek around him. He manages teams to develop Louis Vuitton China information systems. He becomes aware of everything that revolves around this brand and issues that affect many luxury brands notably Vuitton, which is counterfeit. When you sell bags for thousands of euros, it's easy especially in China to find a small manufacturer who will be able to make them cheaper, stick Louis Vuitton on them and sell them cheaper.
He becomes aware of these business issues, and in 2013, something changed his life, and will change his life, he doesn't know it yet. At Louis Vuitton, he attends a tech seminar for IT and he discovers blockchain technology. He discovers via the speakers and the interventions, what the blockchain is, what is its intrinsic and deep functioning, how can it work in security, how can it work as a system which helps build trust between several actors, how can it operate in a decentralized manner. It changes his view of the world, he becomes extremely inspired. In the process, he will found BitSE. He was traumatized by the blockchain, they found it with associates, they want to set up blockchain solutions etc. Initially, they earn money especially with mining. Why? We are in 2013-2014 at this time, we are more towards the beginning of Bitcoin in the timeline. At the level of mining difficulties, at the level of miners, there are not all the pools that we know now, it's much less structured, even if in China it's already hitting hard, So they decide to go all out on mining with this box, to already enter flows, to collect money and to enable them to develop what will become VeChain.
But VeChain still doesn't exist, they're mining, and they mine so much, that they arrive at 5% of the world supply. They are the ones who mine 5% of new blocks worldwide. This box is therefore a little bit beefy in the blockchain ecosystem. It allows them to make money, absorb their costs, and develop VeChain. You should know that he does this in parallel with his work at Vuitton.
He is still CIO of Vuitton, he develops BitSE, he starts working on VeChain, it rises to 5% of the world's mining capacity. In 2015, VeChain is ready, officially launched in Singapore and there, he wants to leave Vuitton to devote himself 100% to the VeChain project. He leaves Vuitton and becomes full-time CEO of VeChain. We're not talking about VET yet, because now when we talk about VeChain, we have the VET token, but at the time we were talking about VEN.
If you do some research on VET, you will see that by looking for the history, It doesn't go back to those years, 2015-2016, because at the time it was called VEN. We will see later in the story that it has been rebranded, that it has had changes. Why is it called VEN at the time? Because it is, for now, on the Ethereum blockchain like many other cryptos, including DeFi which we often talk about, it uses the Ethereum blockchain to operate.
The token is launched, it is called VEN, what interests us is to understand, VEN at the time and VET now, What's this? How it works? What does it do? There are 2 main goals for this project and this blockchain. First, it's to do all that is tracking and then, all that is a trusted service, a trusted third party. The tracking side and the trust side are the two main axes that this project and this blockchain will develop. Here are some examples, there are 7, 8, 9 big cases where we will understand the business interest and we saw it with XRP and Ripple and we will maybe see it with other cryptos, If this format of "Père Castor tell me a story" of crypto from A to Z interests you, you can tell me in the comments, I will do new projects.
The projects that interest me the most are the projects that have a business interest in the real world, if we take Bitcoin for example there is not too much business interest, Yes it's the first, yes it's the king, yes it's the biggest, yes it is a store of value, yes we are talking about digital gold, but it does not have an immediate impact on the world, as can have VeChain with the examples that I will give you. The first example is on the trusted third party side and on the retail side.
We will say that added value 1, on everything retail, retail, and it came to him at Vuitton. VeChain how smart they are, and how attached to the real world, they manage to set up partnerships. They have a partnership with LVMH, Louis Vuitton Moët Hennessy which is the group that owns dozens of brands including Louis Vuitton. What does this partnership with LVMH do? We take the bags.
The first were the Givenchy bags. The problem with Givenchy is that it's very expensive, we have counterfeit problems. Inside these bags we put RFID chips, tag systems that can be scanned with an iPhone, with any RFID enabled device. This chip, this tag will follow the product from the start of its design, at the raw material stage, at the factory stage up to the end consumer and beyond the end consumer, on any resales, on any after-sales service, repairs, etc. We will be able to follow, anchored in the blockchain, so secure everything we know, secure a falsifiable, throughout the life of a product. On a bag, one can wonder where the raw materials come from, who is the seamstress who assembled the thing by hand, when was it done, on what date, how it was transported, in which store it happened, who bought it, etc.
For example on a resale, I bought a Givenchy bag, I don't want it anymore, in 2 years I'll sell it to you, the question that always comes up "is it a real Givenchy bag or not?" By scanning the tag with your phone, you connect directly via the blockchain to the LVMH interface, so from the group of the brand that will tell you if this bag is real or not. See even if there are no tags in the bag, this bag is not real. We have the tracking and tracking side and the confidence shooting side. These are solutions implemented, very well explained on their site, as usual, I'll put all the links to you. It's in place it's official, it's effective, there are partnerships that are already in place, and there is also a non-exhaustive list of all partnerships, and we see that LVMH is there, other major retail players are there, there are many Chinese actors that we know less about but there are actors that we know well like Higher, there are actors that we know well like H&M, who are partners of this blockchain and their products, It's well explained here, I'll show you a diagram where we realize that the whole idea it is to go from the creation of the product to the loss management, when we go to transport it, can the product be lost, can it be stolen by an intermediary, we're going to track down the transport, we're going to track it down in the store, we can track how quickly it is sold, is it sold, not sold, is there a surplus, no surplus, how long is left in stock.
We will then be able to track interactions with the customer does the customer check if the product is counterfeit, does he resell to successive customers who themselves will verify we also have all the after-sales service. If the product returns to the factory because the bag strap has broken, we will be able to anchor all this in the blockchain and say on such and such a date the product was sold 2 years ago, he came back to the store, the strap is broken, this is the original product, it has not been tampered with … and we could go down very micro, for example on a luxury product, we could even put several tags in the product to say for example the handle of the bag corresponds with the bag, it matches with the zipper, etc.
For a bag, this is not necessarily interesting, but for expensive products, it could be more interesting. It could be more interesting for my second example, which is also something in place now through partnerships, and we have it in the list of partners a little higher, you may have seen Renault and BMW go by, I will not describe who Renault and BMW are, two key partners for VeChain. The automobile is the same thing.
We need to follow the product, to hunt it down and also to have confidence in what is happening. For example, for a car, we have the diagrams that explain it, at the top, we have a production line with the vehicle that will be connected with tags. My example of having multiple tags in a vehicle makes sense. We can have a tag on the engine and a tag on the body, a tag on this or that part that is important to find out if they have been switched between vehicles, find out if they have been changed, repaired etc.
At each repair step, we will include everything that is happening in the blockchain. Automatically at its dealership, the product is scanned, we look in the computer, we see that we have done an oil change, an overhaul. We not only digitize the maintenance book, but we come to allow all the people to whom we would give access, for example when this car is resold used and you ask for the history of the car, you scan it, and you have all the history, with whom it was repaired, when, why, how, where it came from, when it was produced. This allows you to follow everything that happens, and we have all the interesting insurance players, independent repairers, manufacturers, but beyond that, the banks that will make loans, who will guarantee this, insurance experts etc. All these people will be able to interact via the blockchain and via this digitized and tamper-proof history of the history of the vehicle from A to Z. 2nd extremely interesting example of application of VeChain. A third example on the tracking side and on the trust side is agriculture.
What have they done with agriculture? They explain it here. What is agriculture? It is producing products, and taking them to the end consumer and if possible we would like to have confidence on where it comes from, why, how, when it was produced, was it mixed, Was it transformed, were there pesticides or not etc. It's still interesting. We also have a problem in agriculture, the heterogeneity of foodstuffs. For example to make flour, grain, wheat can come from 30 different farms. You end up with your flour and you don't know where it comes from. Being able to tag all these farms, all these different flours, all these product qualities, and either on a final product, the flour alone, or on a multitude of ingredients contributing to a final product, we will also be able to track everything down and it is already in place.
For example, I found a funny anecdote in Italy. We follow tomatoes, because Italian tomatoes are like certain French products, they are PDO, they are a guarantee of quality etc. These tomatoes are tagged directly at the producer via the VeChain Blockchain, and we know from a reliable and tamper-proof source where they come from, when they were harvested, why, how, and if possibly they are found in a finished product, we are also able to track him down. Some partners have partners in tea, on tomatoes etc. The entire product life cycle can be tracked, but beyond the producer. The producer can be tracked but also all the logistics to the store, sales, consumers and even connected objects. We could think about tomorrow and we have already talked a lot about connected objects. When I have more tomatoes in the fridge, I ask my fridge to recommend tomatoes and if he can also verify that they come from the same producer as the last time, and that this is the variety of tomatoes that I like.
It could also be interesting. We finally interconnect, and that's the beauty of blockchain, and this project in question, beyond just the blockchain, we come to interconnect real life via secure and tamper-proof interfaces with the blockchain. We also have the example of logistics that they explain on the site. What is the logistics problem? Logistics is a science, it's very complicated. The science and beauty of logistics, it is to transport food from point A to point B, and possibly to store them, but pick them up at the right time in the right storage to send them as quickly as possible to customers. We also have problems that pile up on top, with transport costs, fluctuations in the prices of raw materials, the cold chain for products that require the cold chain.
The proposal in relation to the logistics of VeChain, it's to digitize all this with tags anchored in the blockchain and which allow to follow absolutely everything, from transport times to potential flights, to potential breaks in the cold chain, because it will suffice to compare. If a refrigerated truck is tagged and the packages have a tag that lets you know when they get into the truck, when they get out etc. We can follow the cold chain.
There are other examples on energies. They have a partnership with a company that makes gas, to track where the gas comes from, what is its quality, are there any leaks or not, how is it followed, how it is consumed, at what speed, and all fluctuations, all external factors that there may be if we consume more when it's cold, how much, what is the impact of these external factors, climatic conditions etc.
We also have all the carbon part. They have an interesting partnership with a car manufacturer in China that we don't know in Europe, but which is important in China, which is one of the biggest in the world. This manufacturer's mission is to lower carbon emissions, and there is a system of carbon credits, well-behaved companies are entitled to carbon credits and companies that behave badly have to buy carbon credits, a kind of reverse tax where if I pollute, I have to buy carbon credits to compensate for the pollution, if I reduce my pollution, I receive carbon credits that I can sell in exchange for money.
It is a system that compensates itself. Those who pollute less and less receive carbon credits, and therefore money, and those who pollute too much will pay more and more. which encourages them to pollute less and to receive carbon credits. So much for the economy of carbon credits and thanks to this blockchain, they track down the cars in question, hybrid or electric, etc. we track the whole manufacturing process and also the cars on the road to know their speed, why they consume etc. All this goes into the blockchain, and in real or near real time, we are able to give carbon credits or remove them or make them pay again via this blockchain.
The last 2 examples already exist in the real world, but are digitized, faster and perhaps more secure, and their goal is not to be the best and the only one on all these verticals, because all the examples that I gave you could exist otherwise elsewhere, but what makes the strength of this project it's putting everything together in a big toolbox and we will see it after being able to offer it to turnkey companies.
There are 2 examples left: the digitization of content. We talked about it with examples on the Internet of Value, when a music or film producer is going to get paid live, they have copyright protection applications, to be able to follow a copyright, is it used or not, therefore to do tracking and payment flows. On the filing of electronic documents as we can see with many other applications on the internet, you can sign online, it's secure and it's sent to everyone. They do it the same way. Except that what is beautiful and what I like about this project, which makes me say that they are strong, it is that each time, they have very interesting partnerships. We talked about logistics, they are partners with Kuehne + Nagel, who are completely unknown to ordinary people but I can't imagine people in logistics, when you do research on them, you realize that they are massive. You have 109 companies and 75,000 employees, 15% of global freight that passes by air or sea.
They are partners with them, they are partners with the Chinese government. We were talking about the digitalization of signature processes, they are partners with Price Waterhouse Cooper, PWC, which is one of the big four, a very large one in auditing, accounting, legal services etc. The list of partners is quite mind-blowing. There is also Walmart, I did not mention it on retail. Walmart is not a small brand and neither is Walmart China. H&M and so on. What is missing from many blockchain projects, is to manage to connect an idea, a white paper, a great vision partners, business applications in the real world are often lacking. The rest of the story. There I explained to you until 2014/2015, launch of the project, Ethereum, I made a small detour through the partners, but between the two, things happened so that we are also advanced today in terms of partners. I will resume my story. At the start of 2018, well after the launch, I do it fast, but I reassure you, they struggled, it took a long time. I shoot the video at the start of 2021, and not all of these partners arrived at the launch in 2015-2016.
At the start of 2018, they set up their rebranding, that is to say that they had already planned for X time to get out of there Ethereum blockchain, for many worries of congestion, speed, costs, and also for their vision and how the blockchain works, which I will explain to you later. At the beginning of 2018, the photo made me laugh so I put it on, they make their big official launch of their blockchain, and they come out of the Ethereum blockchain.
They launch the VeChain Thor blockchain. Why they called it Thor and why they took a hammer, I don't know, they are Chinese, it is perhaps in the culture, it was their delirium, why not. The VEN token at the time is no longer based on the Ethereum blockchain but switch to the new blockchain, the VeChain Thor, and the token will be rebranded, no longer VEN as at the beginning, but VET. So when you look up the history of VET, it starts on that date. The token is rebranded VET, we also decide to multiply the supply by 100. Why? We also saw it on the XRP Ripple video, the more important the supply is for very large business applications like this one, where we talk about making partnerships with the biggest companies in the world etc. The more we have a significant supply, the more we will be able to use tokens who will have a real use in life without moving the prices too much because that scares these boxes there; it is better to have a quiet and gradual increase than price explosions even if history shows us that a larger supply also manages to explode and we need a lot of supply to be able to serve everyone if we look at the project, the big picture over time, in 5/10 years, when you set up this kind of project that's what you look at 5, 10, 20 years old, and that you do the calculations, you realize that you need a significant supply.
They therefore decide to multiply the supply by 100, but they don't do any dilution or anything, they increase the supply by 100, they divide the price by 100, they allow people who had one to end up with 100 with the switch. No one is harmed, it is a multiplier that comes to be set up, a split price as we will do on the stock market when we divide the share price by four because it is too high. Why are they doing this? 'Cause they plan what will happen next and everything that has led to these many partnerships. Switching to their own blockchain, it will allow them to apply the fees they want, to have their own white paper with their vision, to change the protocol because we know the problems of the Ethereum protocol. It will also allow them to implement two great revolutions. The first is going to be the two token system which I will talk about now. The second will be the notion of BaaS instead of SaaS which I will talk about later.
First thing, let's take a look at the two-token system. The implementation of their blockchain will allow them to make a modification on something they might not find interesting on the Ethereum blockchain. We will create two tokens: the VET, we're not really going to create it since we have seen that it is a kind of split price x100 of the VEN, we multiply the supply by 100, we allow people to switch, the VENs disappear and they have VETs. The VET is the utility token of the blockchain, it is he who will allow value to be stored.
Like any crypto, it's a store of value which finances things, activities etc. I will go further in my explanation and create a second token which is also attached to this blockchain, the VTHO or the Thor, his real name. Again, they chose it like this. The VTHO, the Thor or the VeThor. This token will work a bit like gas works on Ethereum.
That is, to pay the transaction fees, we are not going to pay them in VET, in dollars, in fractions of VET, we are going to pay them in VTHO. Why? It's super smart. Their goal is to say that the VET will be used to store value and the VET will be used with a second big vision: when it is detained, therefore stacked and does not move, it produces VTHO. Much like a farm would produce milk or a tree would produce fruit.
When VET is stored, it produces VTHO. It therefore has a yield. Slowly, every day, a VET produces 0.000432 VTHO. The more VET you have, the more VTHO is produced, because you don't touch these VETs, you stack them. What will it allow? Put yourself in the shoes of a company like LVMH, which will set up more tracking and trust systems, as we have seen with the bags, for example the Givenchy bag, and tomorrow it might be their Vuitton shoes etc, and more and more products. To pay for transactions, we do not use the VET, we use the VTHO. That is to say that at each micro checkpoint where I come to scan the RFID chip, I retain the manufacturing, then it leaves the factory, then in the truck, then the customer, then the client scans because he wants to know what happened, then the customer sells it so the person who buys scans etc.
At each of these blockchain usage points, we just use VTHO. And we come to burn some VTHO. Because we come to pay with VTHO. Now there are two big solutions. I am LVMH, I have three main solutions. 1: I buy the VTHO. Because I have to use this blockchain, so I buy it. The VTHO, although it is not expensive, it may cost me dearly over time. Either I buy VET. If I buy VET, I produce my own VTHO, Finally, I spend a little at the beginning, as if I were buying a factory, but afterwards I can produce, like a factory. The factory may not be a good example because I will need raw materials etc. As if I bought a building, for example. I buy a building, it costs me dearly at the start, but then I have tenants who pay. So I have a return, even if we will remove taxes, repairs, etc. It's a bit the same idea. I buy VET. My VET will produce VTHO for me, and whatever I'm gonna do, it's gonna be free. Or a mix of the two.
I'm going to have a bit of VET and on peak usage for example, or what I have not planned, I will buy some VTHO, time to buy back VET etc. Here is the whole business model of this company, which is not structured like a business, as we had seen for Ripple for example, but it's structured like a foundation. VeChain is a foundation. There is still a big difference between a company and a foundation, the company is there to do business, to earn money, and will eventually be able to pay its shareholders and then make a lot of money. A foundation is there to set up a service, perhaps bring good, better for society, for a class of people, for animals etc. A foundation needs to be profitable in order to continue to operate, to be able to collect money and then spend it again, to invest and grow its teams because a foundation is generally structured like a company. A foundation that grows will hire people and so on. But its end goal is not profit at all costs. Its end goal is not the shareholders. It's a real difference between the two.
This side, we will see later, structured like a business, but it's a foundation with a very smart business model, I find it smart. Now that we have understood this token ecosystem, I talk quickly about how the blockchain works, it's not a proof of work like Bitcoin can be, we have seen that it consumes a lot of electricity, that it was very polluting, that it was slow and expensive, This is not a Proof of Stake as Ethereum will become tomorrow but is not yet, but like many other blockchains are, where it is necessary to stacker at all costs, and it is therefore the richest who come to validate the transactions.
This is yet another another consensus system which is called the PoA, Proof of Authority, which looks a lot like what can happen with XRP, with consensus, where overall we will give an equal chance all validators to find the next block, via a sort of raffle, there is a number of equal chances, the one who validates receives a fee. All these validators are connected to each other, and depending on their involvement throughout the system and the blockchain, and depending on how much VET they have, they are incentivized to own VET and to own millions, tens of millions. Depending on how much they have, they have more or less voting rights. On the other hand, it is not proportional.
We will see the white paper quickly just after, it is not proportional to say you hold 90% more than the others so you will have 90% of the voting rights. There are ratchet effects but it's all calculated intelligently so that no one has the majority of the voting rights and that there is necessarily a consensus that is put in place to accept any changes and we will talk about it later in the events that happened.
I resume my story. The two-token system, the change to the VeChain Thor blockchain, the establishment of the VET and the establishment of the VTHO. We finally understood how it works. But how do they make money? Because I say it's a foundation but it's not a private company, so they are not here to make money, but a foundation needs money to run, to hire people, to continue to chain etc. So how do they make money? There are major axes. The first major axis is the sale of the VETs they hold. We know it quite simply, that's why I like all these blockchains and all those projects that are structured like businesses, is that like a company, they publish their financial reports and their quarterly reports.
We can follow exactly what's going on and it's all very transparent. There we have the last one that was published, and with each report, we see the state of the supply, what is happening, how, why. Like any crypto project launch, they kept some of it for themselves. We have the co-founders who have about 5% of the supply, it is not written but I will explain why later. But we also have a business development part, an ecosystem reserve part which will be used to develop the ecosystem. They will sell part of their VET to the companies we saw before, LVMH etc. who want to use help to store value and who want to use VET to make VTHO. It is therefore the first axis of performance which allows them to earn money and absorb their costs. It is a very immediate axis because even if it will not be tomorrow, now is the time to launch the machine, to set up partnerships. The second axis that they put forward in their report is asset management.
Because by selling everything we saw above, they still make money. With the VET when we have companies like LVMH etc, we bring in money. With this money, they are smart, they do asset management and investment, and it earns them interest that allows them to cover a large part of their costs. The third axis is the famous BaaS, it's very smart. We know SaaS, Software as a Service, which are softwares allowing to be very flexible and set up your organization in your company and which adapts to each company etc. They created the same thing with the blockchain: the BaaS, Blockchain as a Service. They said to themselves: We have partnerships, we want to put things in place, we have lots of ideas that are smart, it can all be very interconnected, but wouldn't that be smart to allow anyone, any business to either plug into our own blockchain and use what we already offer or to plug into our own blockchain in part or in whole or even not at all, to make their own blockchain with their own involvement.
Because we haven't thought of everything. It turns out, tomorrow Airbus will want to work with us for something very specific, for example being able to follow the constraints on the planes. When planes fly, there is turbulence and mechanical stress and we want to follow them to see if there are no microcracks etc. Ideas that come out of nowhere but it could be an example. They said to all these future customers, we will create the BaaS, Blockchain as a Service, they did, and they just allow any company wanting to work with them to plug in in whole, in part, or not at all to their blockchain and to use in whole, in part, or not at all their services, the VTHO, the VET etc.
It's super smart because it makes money. When you do turnkey solutions for companies, and you let them follow exactly what they want why, how, their supply chain, their logistics, sales, interaction with their customers, after-sales service, etc. it costs money, and therefore it is a major source of income. So this is their third income stream. And that's all. I come to take a break from the team, since we saw it, they had 5% of the supply as full of blockchain projects. What did they do with these 5% of the supply? Why does it not appear on the reports? It's very simple, it actually appears just below. There is a team lock up in place and it's super cool because when they made the switch between the old blockchain and the new one, between the VENs and the VETs, they gave 5% of the supply to the founders of VET, these founders have engaged in the white paper to block this supply and not to sell it, not to trade it and not to enrich yourself personally with it.
Every time there's a quarterly they recommit themselves to continue to block their supply and not to sell it, it's cryptographically blocked, as usual, smart contract in a blockchain ledger. It's cool since we are talking about 5% of the supply being blocked, we are talking about 3 billion VET. It shows the commitment to the success of the project and the foundation. This is an interesting point for me, and another point which may be of importance; In 2018, we saw what happened, crash, explosion etc.
Back then VET was among all cryptos, the whole ecosystem exploded, rose to the top, bullrun etc, and after, fall of the bellows in 2018. We realize that at the time the VET underperformed less than the others, when the others have made -80%, the VET over certain periods has managed to increase in value and others to do -60 from -20 … He survived better, and I found a few articles from the time, "There is only one survivor it's VeChain" "There are two survivors, it's VeChain and BNB" at the time. It was a crypto that survived the previous bear market well, we are increasingly in a bull market situation, we don't know how far it will go, it comforts me on the fact that it is interesting, even if the past does not prejudge the future.
Another strong point that I put aside for you, all the white paper is available in link. We're not going to study it in full because it's still pretty geeky, but if you are interested in the project, it can be interesting. There is the governance part which is very interesting where they explain that even though it is a foundation, they're really structured like a business. Today there are people, employees and it is something quite solid. There are smart moves that I want to salute, like this one, they get more and more involved politically, it's up to you to decide if it's good or not. They joined the China Animal Health and Food Safety, Alliance CAFA, when we look at the other boxes that are in it, we see that there are partners like Walmart, or no partners yet but interesting McDo-like boxes and all the Chinese boxes that we do not know but which are all extremely massive. We see IBM here that we know better, and if you research the size of this device and boxes that are inside, it's interesting.
They are also partners with the Chinese government, it's either good or bad, but these are smart moves because today to do something relatively big, it's easier to be a partner with the government, especially in China. So much for everything that is vision of the project, positive points. Now let's see the weak points, since everything is not all rosy in life, all projects have weak points or unknown points. The first big and easy to find by researching VeChain, and it is perhaps a point of concern that comes out from the beginning, it is the business of the hack. On December 13, 2019, there was a VeChain hack. It means everything and nothing. Because we say there was a hack of this or that project, this or that crypto, you never know if it's a fault on the blockchain, which is very serious. If it is a defect of a wallet that has been hacked, but that comes from a code defect or human error, etc. There are plenty of possibilities behind the word hack. A hack doesn't mean anything.
There may be 10,000 entry points, some severe and some less severe. The history of the hack, we had the press which made the fat of this story, we are still talking about almost $ 7 million, the story of this hack is human error. VeChain, at the time, was buying back. The same thing that companies on the stock market can do, that is to say that for a company on the stock market, we will buy back part of the shares to reduce the number of shares in circulation.
VeChain at the time bought VET to collect more VET to incentivize the people they bought back since he was getting cash, to do more VTHO. There are plenty of reasons to buy back, but overall it gives investors a good image, it makes them want to continue and there must have been some arrangements with some of the big partners we saw. They were buying back. There was a special wallet. On the blockchain, there are always wallets. There was a special buy back wallet. The person in charge of this wallet made a mistake, did not follow the procedures that were in place, maybe created a too simple password, maybe put his recovery key in a place where it was hacked on his computer, or photographed etc. In short, a hacker managed to steal the wallet. He did not break into the blockchain, the blockchain was not broken, there was no attack 51 or things that you can see sometimes, it's a wallet theft.
It's serious, it's a major security breach and in particular we are talking about a box that holds billions of VET so it would be nice if she paid attention to her security protocols. There were a lot of decisions that were taken as a result. The first is the resignation of the CFO, the Chief Financial Officer, he is the one who manages all that is finance, and who has in his spectrum the management of these buybacks, the management of finances, the management of wallets, the management of various bank accounts, etc. therefore resignation. At the same time, they contacted all the exchanges to give all the addresses that had been hacked. There was not only one address, since once the wallet was stolen, the hacker was clever, he threw all the VETs on 469 addresses, which were subsequently found since the blockchain is transparent, everything is traced, we are able to say where it started, where it happened. So he sent this to 469 addresses, they contacted all the exchanges, give the address codes so that these addresses are blocked, that they cannot make sales, they found three quarters of the tokens, 727 million tokens out of the 1.1 billion that had been stolen.
The hacker has had time to make sales. From there, what they did and it appeared at the time as well, the CFO is gone, they launched an update on the blockchain, since the blockchain is a computer program and a computer program can and do require updates. So here, I am not reminding you of the principle of validators, the principle of consensus, etc. but they sent an update on the network by asking all the actors of the network, therefore nodes, masternodes, validators, it's like many other blockchains, there are knots which are more or less large, according to their interactions, the number of coins they have stacked and their size, they have voting rights.
They sent this update, and asked to vote on what they came up with on this update, to block cryptographically, because it is not possible to block these coins, these addresses on any blockchain. It was not planned at the beginning. But since there was a hack, they told people to vote to be blocked, that it is not only the exchanges that block them, but that they are frozen. The vote was yes, they froze these tokens which were found, finally the large part of these tokens which have been found.
There was a second vote which was sent later, everything was done very quickly, in 2 weeks, it was settled. Update the blockchain, revote and now that they are blocked, they were asked if they agreed to burn them down completely. We are not going to leave them stranded for life, they have been stolen, loss of confidence. We burn them, they disappear, we remove them from the blockchain. We are therefore going to lower the supply a little, but not too much either. It was voted yes so these tokens were completely burnt. It was pretty well managed, after like any business, any big project because we understand that it is a foundation that respects itself. Then CEO Sunny said he was going to cut his salary by 50% for the next year, given the fault, it is well managed, in terms of communication.
He therefore lowered his salary by 50% and we realize that the course has reacted rather well, that is to say that even the day after the hack we made -11%, which is not very important compared to other courts in general, it varies a lot in the crypto market. In the medium term, we were more at about a 5% drop, since they were able to manage well. It shows that to err is human but that they were able to anticipate and reason like a business. It reassures me too. 2nd negative point for me, maybe more important than the 1st, which is my big minus point. There is a lack of figures on partnerships. We are told of LVMH, BMW, etc. partnerships. We've seen them all here, all the big boxes.
The list is a bit old, there have been new announcements since. We are told of partnerships but we do not have precise figures, on what are the volumes, what are the products considered by these partners, what do they do, how, how much does it cost them, how much VTHO? We lack numbers. There is noise, there are rumors, but there are no consolidated, clean figures etc. I would like more vision on this, even if in the quarterly there are a few but we do not arrive, as we could do with a company listed on the stock exchange, to realize what is really going on.
We know that things are happening, we realize that it works, we realize that brands are interested, but we do not realize how much. So it's hard to say it's gonna explode tomorrow, it's the best project in the world, it's clearly undervalued, or on the contrary, it is already well priced. When you invest in an asset, it is very important to tell yourself it's undervalued, so I believe in it and invest, or else I anticipate that it will increase because I see that something is going on. We can anticipate that it will rise because we believe in it with partnerships, the super ecosystem, but we cannot say by A + B, they fit so much so the box is worth so much, so the market hasn't priced it yet. It's a lot of anticipation, a lot of speculation and relatively little accounting reality. It bothers me a little bit, and last point of concern, it is the price of the VTHO. Today the price of VTHO is low, it is quoted, you can find it very easily. At the time of shooting this video, the VET is at 0.046, the VTHO is 0.0048 so it is much cheaper.
We still see that the VET curve looks like this like all crypto globally at the moment. The VTHO curve looks like this, we can see that it is volatile, since we are on low prices, I imagine that there is not only use, we wouldn't be in bullrun times, I will see him do that I would say to myself: everyone wants VET, VTHO, companies buy it because partnerships are becoming more and more important. But here we are in a bullrun period, and we are in a period of increasingly stupid market. So, are these not beginners who have not understood well, who see marked VTHO 0.048 who think that this crypto will explode like the others. The psychological effect where we see that it exploded, little pullback there on interesting fibo levels, we say to ourselves that it will start to rise again so we buy. Typically speculation, not usage. So this is my point of attention. What is going on with this VTHO? Unfortunately, I think we are purely in the speculation, but wouldn't there be some use. It is very difficult to know. We do not count to say, we burned so much VTHO, companies use so many VTHOs.
There is also the possibility that all people who have VET, have VTHO, VTHO is starting to be listed on more and more exchanges, especially Binance. So if we got some free VTHO and that's what everyone would say, if I have X VET and it's been 6, 8 months, 1, 2 years since I had them, I have already recovered so much VTHO. Free money, I look at how much it's worth, it's 500 euros, so I sell them.
We do not know exactly what is going on. Now let's talk about the future since it is still something important. What will happen in the future, what can we think? There are some future points for me. The first is that we do not buy from a vertical market. If following this video you have the fomo to tell you I'm going to buy VET, it's a bit complicated, because the accumulation period was more in the past, around here, not too vertical. At the 1st break out, volume, return to the pivot, there was a second super period, 2nd break out, volume, correction, consolidation, a nice consolidation figure here possibly, but this is hard to buy.
There we have a nice return on the 0.38 fibo, a continuation figure here, there was possibly an interesting buying level there. Now come home right away, if that was me and I didn't have a VET, I have a fund of course, I have to disclose what I have is important, I am an investor in VET, I have since after the previous bull run, I have never sold it. There if I had to buy now, or strengthen myself now, I do not find that we are in a superb location.
After the notice, it's always a matter of allocation and if you tell me i'm a gain, it depends. If you tell me I'm new to a crypto, all in VTHO at a location that is not super optimal, I'm telling you no. If you tell me, I've been in cryptos for 1 or 2 years, I am at +100, 120, 200, 50, 60% whatever I am very largely positive, I started to take gains and I plan to put 2, 5, 7%, on VET, the speech is not the same.
It is a question of risk, return, allocation, control of this risk. There will be no buy or no buy, this video is not investment advice. I can not say more. Now there are a few more points that I like, there is this initiative that was launched recently. It is a foundation started by an insurance company which is called the RISI project, who wants to clean the oceans like many other boxes. They clean the oceans, they collect pollution, they fish for plastic and they're using the VeChain blockchain to track it all down. How much, where, how to beep, follow behind the industry that will recycle etc. We see the guy there with his phone, there are QR codes everywhere, there are tags, they weigh etc. This project is relatively new which I find interesting for 2 reasons. It is ethically cool, ecological and that it is the present. It attracts a bit of spotlight on the project so I find it interesting. Don't forget, if I have to conclude, that we are rather in a debilitated phase, be careful, we are increasingly entering a market weakened phase, on the other hand, we are at the time of filming in early 2021 maybe you are in 6 months, in 1 year, I don't know what will happen.
Maybe this very long-term project as we could see with Ripple on a previous video as we will see on other videos with other projects and like lots of blockchain projects, we have some who are going towards a real disruption, a real change of the world and they are registered over a significant period of time. I think this project takes place over a long period of time. I think that we should not necessarily give in to the sirens of I buy right away because it will explode, i will resell and make a profit. It can also be healthy to say to yourself for someone who would have missed, I'm going to let this bullrun go by, I'm pretty invested in cryptos, I'm happy with what I have. On the other hand, in the bear market when things are going to go down, when things are going to be lateralized, this project is an example, or any other I believe in, I will take the opportunity to invest intelligently like a institute, like a fat man, like a whale, and I will accumulate during the periods of lateralization when nothing is happening or no one believes it to take advantage of the next explosion.
But I don't know what's going to happen, so tomorrow it's x100,000. Thank you for watching this video, you can put me in comment, your questions, your comments. I would like to say one important thing. The like we haven't popped it, we forgot it, we made our video, we are happy, and we don't freak out at the like button. You take Thor's hammer, the hammer we saw, and you blow the face of the like button to thank me, because it's nice, it helps this channel, it helps SEO and the little SEO comment is nice too.
See you soon, the team, the future is us..