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Vechain to 'control' the price of VET? (i.redd.it)
submitted 4 months ago by karakrypto
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[–]GreatWhiteSharkCIAModerator 5 points6 points7 points 4 months ago (4 children)
VET cannot be controlled. Thor Power cannot be controlled other than perhaps by adjusting the burn rate, but that would be a governance issue for which all wallets holding 10K or more VET will have a say over. What this statement is really getting at is that partners operating on the chain will likely hold VET to generate Thor Power, and that this Thor Power will be used for their daily usage on-chain. So in essence, their costs are controlled because they simply need to hold enough VET to cover their Thor Power needs.
[–]ochocincovo 2 points3 points4 points 4 months ago (0 children)
So in essence, their costs are controlled because they simply need to hold enough VET to cover their Thor Power needs.
So in essence, their costs are controlled because they simply need to hold enough VET to cover their Thor Power needs.
exactly how I interpret it as well.
[–]karakrypto[S] 1 point2 points3 points 4 months ago* (1 child)
Thanks. I see what you mean. Will be holding on to my strength node for sure, but I guess I’m still trying to wrap my head around potential rewards.
How does this make it fair for the enterprise users though. Company A might buy 10,000 vet in Jan at $10, and generate 4000 Thor per year (which they use for their transactions). Company B also needs 4000 Thor per year but they buy into Vet a year later when it is $100. The Thor generated by company B would take longer to pay for the initial outlay. This creates an environment where the first to the table benefit a lot more than later enterprise users, which would seem unfair. After all, in the current business world, enterprises might expect to pay the same amount for the same service, not vastly different sums that this new model would suggest.
[–]w0rkinhard 2 points3 points4 points 4 months ago (0 children)
Might be cheaper to buy THOR on the open market then.
If you really want to use VeChain block chain then you gotta decide.
Buy THOR on the open market.
Buy VEN and generate THOR.
You pick whatever is cheaper in the long run for your needs.
[–]alladvantageceo 0 points1 point2 points 4 months ago (0 children)
Yes this makes sense to me. If THOR price is somewhat controlled then once a client buys enough VET to cover their transaction costs, they are effectively "bought in" to the network and the initial budgetary expense (the VET) can be put in the books and accounted for.
At least I hope that is the case, since I obviously want VET to appreciate in value over time, I don't quite have a strength node yet and unless THOR is equal to GAS in USD value (unlikely), the passive income is less of an incentive
[–]D0wnco1d 6 points7 points8 points 4 months ago (6 children)
As much as I love vechain, this is why they have been suppressing VEN to get their partners in the door at a really low cost, enough so they don't rely on us regular folk for Thor, but i believe too much suppression will hurt us in the long run. I really don't want a 6 dollar VEN that puts out a useless thor, cause Enterprises have so much thor. I really hope it is not this, and return will be great.
[–]compromisedaccount 3 points4 points5 points 4 months ago (2 children)
This is my fear. I wonder if it can be suppressed to the point of stabilizing relatively low (sub 10$?) and then companies just generate their own Thor. Or Thor is every worth much. Especially as someone who won't have enough VET to generate a large amount of Thor. If I'm lucky enough to create one Thor a day (2400 Vet) and that's worth a dollar or two well then that's not really much incentive to hold onto my vet. So I'd likely end up selling eventually.
Wish I understood how this will all play out a little better.
[–]D0wnco1d 1 point2 points3 points 4 months ago (0 children)
I feel you on your concerns and this is what worries me. If Vechain is the one suppressing their own coin to market it to investors then we the supporters are the ones to get hurt in the end. But maybe there is light at the end and i am wrong, i really hope I am, i've held on during every dip.
[–]shillingsucks 0 points1 point2 points 4 months ago (0 children)
It shouldn't play out like that. Once the early adopters stop getting handouts then companies will need to buy VET. But that drives up the price. Between speculator holding and company holding VET might become scarce.
But once VET is priced too high a company will take advantage of cheap THOR. If you can buy 5 years worth of THOR for cheaper prices then you might go that route rather than grabbing VET. That makes sense for new companies until THOR adds enough value to make VET the better option again.
Depends how scarce VET becomes. If there is barely any VET available on the market then companies will be forced to buy THOR.
It shouldn't matter from the standpoint of a company if the transaction fees are tied to fiat. The cost stays the same. But from VET holders perspective THOR would go up in value.
[–]pyzy24 3 points4 points5 points 4 months ago (2 children)
this is exactly what im figuring out too. if they are suppresing for the enterprises to come in, the enterprises would have enough vet to generate their own thor. who would buy our thor then?
[–]D0wnco1d 3 points4 points5 points 4 months ago (1 child)
Now I am not trying to cause FUD within VEN I really love this project but you telling me these guys are not Vechain guys or enterprise guys, even though we hit 3.30 several times during these crashes and they didn't buy any that low, but yet trying to suppress at the 5.00 range is some BS.
[–]Citizen52 0 points1 point2 points 4 months ago (0 children)
Why do i feel like no one is suppressing anything. People are making gains elsewhere then coming to buy their Vechain thats why its late to go up is my guess.
[–]avisinvestments 9 points10 points11 points 4 months ago (5 children)
early vechain investor/frequent lurker on this thread finally posting as this is the biggest (and perhaps only) remaining question/uncertainty I have on vechain. The economic model as currently explained still doesnt make sense from a company standpoint in my opinion.
The 2 coin system really doesnt fix the issue of companies being able to accurately predict costs as they scale up. Going to use totally made up numbers here but bear with me....
Lets say DIG wants to track 100 bottles of wine a day and that requires 5 THOR a day which requires holding 1000 VEN. They then decide that they now want to track 1000 bottles instead of 100. Now they need 45 more THOR a day and 9000 more VEN to generate that (again, made up figures). If in that time, VEN has increased in price in that timeframe....wont that make expanding their operations more expensive? The idea of companies tying up more and more of their balance sheet to be able to generate THOR also seems somewhat unrealistic.
Am i missing something here?
[–]karakrypto[S] 6 points7 points8 points 4 months ago* (0 children)
That’s my point exactly. Obviously there are other much bigger fish than me involved. Such as Beyer etc, who must be looking to make a serious return off their investment. However, I wonder if Beyer invested in terms of VET or some sort of cash injection. This is very much new territory for all involved, and at the end of the day, as much as I believe in the company and the tech, do I really care if someone else verifies their handbag / wine etc to be legit?... not really. But I would like to see a decent return for my faith and contribution to the company’s growth.
[–]shillingsucks 6 points7 points8 points 4 months ago (1 child)
I keep assuming that they will do what REQ is going to do. You quote the fees in fiat and then the amount needed is relative to value of THOR. That allows THOR to grow based on the number of transactions without the price increasing to the point where you would drive away new clients.
There is mention of the word proportional in the medium article on THOR.
[–]SnatchSnacker 0 points1 point2 points 4 months ago (0 children)
Yes I got this idea as well. I have seen other blockchains use similar structures (HST for example).
[–]squivo 4 points5 points6 points 4 months ago (0 children)
If you have one or more Masternodes that your business owns because you intend on using the vechain blockchain in bulk, the more THOR you and the other businesses burn earns you 30% of the transactions fees in THOR, based on the amount of VET you have, so there is massive incentive there to hold VET and use THOR.
My suspicions are that vechain are lining up enough partnerships with Masternodes which will fuel the demand of THOR. Once they have enough Masternodes on deck ( waiting in the seniority queue ) then they will release vet and thor to other exchanges and at that point will no longer be able to control the price as tightly as they have been.
[–]idk_wtf_im_hodling 0 points1 point2 points 4 months ago (0 children)
You're missing the amount of cost savings for companies that gain major macro efficiency using the VEN network. Imagine it saves a $5 Billion corp 3% in lost/destroyed product and that added benefit is the assurance the consumer is getting exactly what they should. I'd go out of my way to use that product knowing its exactly what i wanted. Companies pay hundreds of thousands per year to use chat clients like slack... why? Because it saves time and adds efficiency. Don't underestimate how much this could transform supply chain as well as business workflow and solve all sorts of other problems that large, bureaucratic slow moving corporations have.
[–]bluntspoon 2 points3 points4 points 4 months ago (0 children)
Understand but we are so early in the game it's ridiculous. Maybe one or two favored partners are getting a leg up right now. But if even medium level adoption was happening those sell walls would be gone in a literal instant. Companies would be coming in and eating them up like NOM NOM NOM. I would not worry too much.
[–]jayjayzian 1 point2 points3 points 4 months ago (0 children)
I took this to mean that Thor could be controlled but VeChain wouldn't.
[–]karakrypto[S] 0 points1 point2 points 4 months ago (4 children)
I've just been reading through the Apotheosis part one document again, and something stood out to me.
This passage seems to imply that VET holders will incetivised to hold the token by being rewarded via another structure (presumably Thor tokens), whilst allowing Vechain to keep the cost of VET stable for their enterprise users by means of 'economical adjustments'. This 'economical adjustment' could be manifesting itself in the way that VET has been seemingly manipulated over the last month through huge sell or buy walls (thus keeping it fairly stable) If this is the case, then it could mean that any rises in VET would be down to Vechain allowing it to happen. Or have I got the wrong end of the stick on this?
Surely on one hand, early investors will expect to see greater returns, but on the other if VET rockets in price then it gives VeChain's future enterprise partners a much higher cost of entry for generating Thor Power? And since the price of VET and Thor Power will be not related to one another, it would make sense to keep the price of VET relatively low so that more can reap the rewards of Thor Power generation.
[–]Tilted_Till_Tuesday 2 points3 points4 points 4 months ago (1 child)
They are saying that if some company buys 10,000 VeChain, the blockchain isn't using VET for the transaction fee. Thor will be used thus the company actually receives 10k Vet, and not 9,990 or whatever if it were a traditional blockchain.
[–]jacopocer 2 points3 points4 points 4 months ago (0 children)
I think "Stable and predictable budget" means that companies will know how many THORs will be necessary to use the Vechain blockchain, so companies will know how many VET will be necessary to create a precise amount of THOR
I highly doubt anyone is keeping it "stable" for any reason other than trying to accumulate more.
The price did go 50 cents to $7 which is hardly stable.
Someone is trying to keep price down just in case something happens like say BTC tanks and they can manipulate the price down and get more for cheap.
Like if it was at $20 and then BTC tanked the price may have went like $20 to $12
But thanks to the whale walls price went $7 to $3.5 and the whales could buy a ton more by keeping price low.
If this coin works out you want as many coins as possible so the lower the price the more coins you get for your money.
[–]idgaf- 2 points3 points4 points 4 months ago (0 children)
I believe "economical adjustment" refers to changes to VET that go through the governance/voting structure. Things like THOR payout rate and other variables I don't know about.
Similar to mining difficulty adjustments in PoW chains.
Price manipulation on open markets will just happen all the time, in every market, like it is now.
[–]cdigiola 0 points1 point2 points 4 months ago (0 children)
Price is controlled by buyers and sellers, not by the product itself. That s what I learnt from everyone that failed trying to make a stablecoin.
I think they mean that because there are many people holding vet for nodes in the future the more stable it will become because people wont buy and sell. So stability in price is having it not go down too not just up. That could be in the very long term after it moonshots.
People are praying that bitcoin becomes stable so it can be used as a currency but they also want it to hit 1 mil. So i guess the nodes make people not sell when its high or low and makes the movements more stable for companies to be able to get a prediction
[–]compromisedaccount 0 points1 point2 points 4 months ago (0 children)
What about other block chain companies entering the market and offering a new “vet” type coin that just needs companies to accumulate in order to gain the same services wtc or vet would offer except on the cheap instead of buying Thor or vet? Or is that going to be difficult for a new player to get established? Are there copyright protections?
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