Vigorous debate about VeChain’s (VET) recent node tokenization decision

VeChain Foundation released an update for their community on their official Medium blog. There is one very important change introduced: VeChain Foundation has tokenized the Status of VeChainThor Nodes including Economic Nodes and Economic X Nodes into VIP181 tokens.

The VIP-181 Standard outlines a set of common methods that all NFT tokens can follow on the VeChainThor Network to transfer tokens, as well as allow tokens to be approved so they can be spent by another on-chain thrid party safely.

As Vechaininsider explains, when a certain amount of VeChain is placed inside a traceable wallet, it can become a node. There are various types of nodes, which all have different benefits, functions, and requirements.

There are two type of nodes: authority and economic nodes, that are further classified to different categories based on the amount of VET a node holds.

X nodes are special kind of an economic node that was launched as an additional reward for early VeChain supporters. The X Node program gives VeChain owners a once in a lifetime to lock. There are 4 subsets of X nodes, differed in their VET holdings and maturity period. “Node Maturity Period” is a term used in the VeChain ecosystem, for the period in which a wallet has to wait before advancing to a higher tier of masternode. Once a wallet has the amount needed to qualify for a particular node, and the corresponding amount stored in a trackable wallet, then the Node Maturity Period starts to count after the user applies in the VeChainThor wallet app.

One of the perks of an X node are VeChain Ico’s whitelist access. The only way to become an X Node holder was to have at least 600.000 Ven on a traceable wallet (not an exchange!) before March 20th, 2018.

As the official Medium post explains, by tokenizing VeChainThor Nodes and open sourcing the smart contracts, node holders, third-party developers and the community in general can all benefit in different ways:

  • Node addresses and tiers information is public on the blockchain available for inquiry or integration into third-party applications.
  • Node holders are able to change the node address by transferring the node token.
  • Node holders can eventually exchange the Node tokens for the liquidity which holders might have been looking for.
  • Other Non-Node holders can potentially participate in node ownership, which will eventually move all nodes into the hands of the community members who want them the most.
  • Node upgrade and transfer is now done through smart contract functions, which allow any third party developer to build applications and user interface to support these functions.

The reaction of the community was predominantly positive with small portions of users unhappy with the decision.

A trustworthy, decentralized public auction option for nodes is freaking awesome. Can’t wait to see what the market is like.

Bummer to have to pay to collect rewards now, but fair enough.

 

There’s greatly added value for both buyers and sellers. The benefits for X-Node holders/sellers/buyers are obvious.

For economic nodes, the node token can have quite a bit of value since it waives the maturity period, which is 30 days for Thunder and 60 days for Mjolnir. Now someone(i.e. a business or investor) can gain access to the extra VTHO generation right away, for the right price.

Also, the ability to set a node up for auction is great. In a few years, economic nodes will no longer have bonus generation, and if VeChain is successful, X-Nodes will become extremely valuable in the long run.

The less satisfied users had their objectives though:

The X nodes were meant to be for the investors who believed in the project from the early days.. now it seems that anyone with a bit of cash will be able to snap one up, potentially a whale buying a basic X node and then upgrading it, thus diminishing vethor returns for the rest of us who’ve already held on through these tough times. I don’t see why X node statuses should be transferable / auctionable.
Whether an x-node sells for $1,000 or $10,000 I do not care. The fact is that people who hold the most amounts of VET have the largest vested interest in buying an x-node and that is not good for the x-node holders who bought in at the beginning under the premise that it was a one time opportunity.

 

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Damian Booker

Damian Booker

First thing to know about Damian is - he HATES shitcoins and has declared a war on them! Damian is a bitcoin hodler since early 2013. He used to mine Ethereum back in the day as well. Nowadays he likes to discuss bitcoin and its potential influence on the society organisation and governance. Damian hates fraudulent projects and his mission is to shed light on the maggoty scammers that have invaded the crypto space with their zero-value projects.

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