VeChain Financial Executive Report Vol. 15

2021-08-06 22:11
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With the purpose of fostering transparent communication with our stakeholders about our accomplishments and the creation of tangible economic value through blockchain technology, we hereby present the 15th VeChain Foundation Financial Executive Report, covering the period from February 2021 through to April 2021.

As always, we sincerely welcome the community to hold us to the commitment of transparency, including, but not limited to, the rigorous monitoring and usage of our funds, and the development processes of all aspects within the VeChain Foundation.

The report structure is as follows:
1. VET Supply Overview
2. VeChain Foundation Expenditure (use of proceeds)
3. Notes
i) Enterprise Investor Pool
ii) Co-Founders, Development Team
iii) The Operation, Technological Research and Development
iv) Business Development
v) Compliance & Legal
vi) Ecosystem Development

1. VET Supply Overview
As of April 30, 2021, the circulating supply including soft-lockups (but excluding the Token Swap reserve) stood at 65,635,322,174, an increase of 393,569,305 compared to the last reporting period. Within the VET circulating supply, 14,731,120,023 VET were held in soft-lockups, totalling 17.13% of the overall supply. During this quarter, 1,125,419,125 VET were released from the Ongoing Operation and Technological Development pool to enable token swaps which now stand at 99.87% complete.  By the end of this reporting period, around 60.51% of the VET total supply is free for trading on the open market.

* The soft-lockup categories are as follows:
Authority Masternode collateral - each Authority Masternode must hold a minimum of 25 million VET
X Node staking - each X node holds a minimum amount of VET based on four node tiers
Economic Node staking - each economic node holds a minimum amount of VET based on three node tiers
Team Lockup - According to the whitepaper, 5% of total VET supply is allocated to the co-founders and development teams.  For long-term confidence and to provide greater incentives for team members, the Foundation started to release the lock-up pool from November 2020.
**Token Swap Reserve
The VeChain Foundation announced the start of the VEN to VET token swap service in June 2018 following the launch of mainnet. From January 2020, the VeChainThor Wallet remains the only token swap channel for our community. As of April 2021, the Foundation swapped 1,125,419,125 VET via the VeChainThor Wallet, accounting for 1.31% of the total supply.

As of April 2021, the token swap is now 99.87% complete. To more clearly display the amount of VET that is kept in reserve by the Foundation for the token swap, we have moved this VET from the Ongoing Operation category to a new category called the token swap reserve.

The VeChain Foundation continues to monitor the token swap progress and share updates with the Steering Committee. If any further decisions are made about the continuation of the process,  decisions will be put to the Steering Committee Vote and be announced later.

***Ecosystem Reserve

The ecosystem reserve was acquired by the VeChain Foundation on the open market. This reserve will be used to facilitate the long term growth of the VeChain ecosystem. VeChain Foundation is evaluating institution-level custody services and the reserve will be deposited into custody and disclosed when the custody service is available.

2. VeChain Foundation Expenditure (use of proceeds)
We summarized below the USD value of the expenditure in fiat for the reporting period. For spending in BTC or ETH, the USD value was booked based on the rate when the transaction occurred. In many situations our service providers and partners prefer to receive VET as direct payment or investment compared to using fiat or BTC/ETH. Therefore, the total expenditure for operation, technological and business development comprises a combination of direct VET payment and use of proceeds (fiat, BTC/ETH) depending on the associated parties’ preference.
3. Notes

i) Enterprise Investor Pool
Due to the ongoing impact of COVID-19 and the related economic turmoil, no enterprise investor was accredited during this period. 

ii) Operation, Technological Research and Development
During this period, there have been some notable improvements announced to the public, highlighting our great efforts in R&D which have resulted in some huge technological achievements, illustrated as follows:

- On March 16, The Developer Preview for VeChain's new consensus mechanism PoA 2.0 was deployed on TestNet with faster transaction confirmation, higher security, transaction finality and more capacity for new partners.
- On March 28, The VeChainThor Mobile Wallet was updated to version 1.5.7 on the iOS platform. This update greatly improved stability and fixed several ongoing bugs, including wallet creation that had affected the previous build.
- On April 12, The VeChain core dev team implemented the Base GasPrice reduction on VeChainThor mainnet. A new version of the VeChainThor mobile wallet which reflects the reduced Base GasPrice has also been released to the App Store and Play Store.

iii)   Business Development
The Foundation sticks ardently to its mission of delivering real world economic value through our service offerings for ecosystem business owners. This quarter saw significant progress in terms of adoption in the sustainability and traceability sectors. The new digital assurance service by key channel partner DNV built on VeChainThor, ‘Tag. Trace. Trust.’ aims to allow anyone to instantly check the validity, data and authenticity of a product’s environmental profile, and successfully onboarded some notable clients including Norweigan Aluminium manufacturer, Hydro. 

The ReSea Project, a Danish company building a community-driven solution to remove plastic from oceans and rivers, used a VeChainThor-powered solution to develop a digital tracking system that secures real-time data and tracks all steps of oceanic plastic removal within the scope of certification.

With the purpose of exposing products and services built on VeChainThor, the Foundation also increased support in business expansion and long-term business development. This quarter has witnessed the success of integrating the Salesforce adapter with our products. 

Announced partnerships and collaborations (February, 2021 - April, 2021)
YIZHIJI cosmetics

Highlights from the business development and marketing events (February, 2021 - April, 2021)

- On March 16,  Sunny Lu, co-founder and CEO of VeChain, joined a special AMA hosted by through its official Twitter, Facebook and YouTube channel.
- On March 19, VeChain joined the 15th Shanghai Retail Conference 2020 China Retail Summit, and was invited to speak during "Technology-empowered New Retail Scene" to share potential blockchain applications, and received the "Best Science and Technology Innovation Award of the Year in the Retail Industry"
- On April 8th, Jay Zhang, Partner of VeChain was invited to attend Blockchain Business Bridge and took part in a panel discussion looking at how blockchain solves food safety challenges.
- On April 9th, Sunny Lu, co-founder and CEO of VeChain, was interviewed by the KOL Thinking Crypto through his YouTube Channel & Podcast. It was an insightful discussion around VeChain's history, adoption, and partnerships, together with progress such as Proof of Authority 2.0
- On April 28, Sunny Lu, co-founder and CEO of VeChain, and Peter Zhou, Chief Scientist of VeChain, attended The VeChain X /r/CryptoCurrency AMA 

iv) Compliance & Legal 
VeChain hires professional service providers in cybersecurity and legal to address a confluence of regulatory and business changes that are placing high demands on compliance currently. The increasing collaboration of VeChain with government-backed alliances and projects further demonstrates the security and compliance of VeChain’s solutions, which we firmly believe is the prerequisite of mass adoption by global enterprises.

v) Ecosystem Development
In order to provide better support for community developers and improve the quality of contributions incorporated participation, the Foundation team initiated and improved the Foundation Grant Program, which has been implemented following communication with our community. Besides incentive programmes, we are also working with consultants to approach for more resources and to create diversity in ecosystem productivity. The team continues to evaluate projects and currently holds productive discussions with several teams.