VeChain Faces Community Backlash as Concerns Mount Over Its Ecosystem and VET Token Utility

VeChain, a leading enterprise-focused blockchain, is facing increased scrutiny from its community over concerns about its ecosystem and the utility of its native token, VET.

Enterprise blockchain VeChain is facing closer examination by its community over the state of its ecosystem and the use case for its native token, VET. Speaking on X about the blockchain firm’s recent decisions and weak tokenomics, Progetto Bridge co-founder Andrea Mortarotti voiced some concerns.

VeChain Faces Backlash from Community One of the main concerns raised is about the VeBetterDAO (VBD) initiative. This initiative aims to promote sustainability by using decentralized applications (dApps) like Mugshot, Cleanify, Greencart, and Non-Fungible Book Club, as reported by CNF. However, many in the community feel that it has shifted the focus away from the core issues surrounding the VET ecosystem.

Mortarotti highlights how the launch of VeBetterDAO has overshadowed the need to address the utility and value proposition of the VET token. Despite the development of new projects, VET’s role within the ecosystem has remained limited, sparking questions about its long-term value for users and investors.

Another key issue that was brought up is that the low cost of VeThor (VTHO), the gas token used to power transactions, allows companies to use VeChain’s technology without holding significant amounts of VET. In many cases, VTHO is sponsored by VeChain itself, eliminating the need for businesses to hold $VET.

This practice has left the community wondering, “Why hold $VET?” While VeChain’s management has pointed to partnerships and increased adoption as reasons to hold VET,

VET holders can also generate VTHO and participate in governance. However, some argue that these benefits alone are not enough to drive demand for the token as private companies continue to use the technology without VET. As Mortarotti puts it,

This disconnect between VeChain’s ecosystem growth and VET’s utility limits the token’s appreciation potential and reduces its strategic importance.

Concerns over Governance Structure VeChain’s governance structure has also come under fire, with critics questioning the influence of Authority Nodes. Due to the anonymity of these nodes and their potential links to private companies, the community has expressed concerns about decentralization. If a majority of these nodes are controlled by VeChain and its private partners, some fear that it could lead to centralization.

Furthermore, the launch of the VeBetterDAO has raised questions about the allocation of funds, with Mortarotti suspecting that resources may have been used for unapproved purposes without consulting the governance committee and node operators.

One commenter noted that VeChain’s tokenomics makes it “a poor choice” for investors due to the low gas fees and oversupply of VET. In response, Mortarotti said, “Lowering the cost of gas would have made sense with real mass adoption and not with an assumption of adoption and expiring contracts with giants like DNV.”

He also highlighted the need for a clear strategy from VeChain’s private and third-party companies regarding VET and VTHO tokens. According to Mortarotti, “Private and third-party companies, if run by foundation members, should have had a well-defined plan of action for VET and VTHO tokens, thus incentivizing purchase and retention.”