Deep Dive
1. Staking-Based VTHO Generation Boost (February 2026)
Overview: This protocol upgrade enhanced the staking mechanics introduced earlier, making it more rewarding for users to participate in network security. It directly increased the amount of VTHO generated by staked VET.
The update optimized the reward distribution mechanism within the StarGate staking platform. It effectively boosted the annual percentage yield (APY) for stakers, providing a greater incentive to lock up VET in a self-custody wallet and delegate to validators. This move aims to deepen network participation and decentralization following the shift to Delegated Proof-of-Stake (DPoS).
What this means: This is bullish for VTHO because it makes holding and staking VET more attractive, which could reduce sell pressure on VET and increase demand for VTHO as the essential gas for transactions. For everyday users, it means potentially higher passive income from their holdings.
(VeChain)
2. Hayabusa DPoS & Tokenomics Overhaul (December 2025)
Overview: The Hayabusa upgrade was a landmark shift, changing how the network reaches consensus and how VTHO is created. It moved VeChain from Proof-of-Authority to Delegated Proof-of-Stake (DPoS).
This change replaced the old system of passive VTHO generation with a new model where VTHO is minted as a reward for staking VET. It roughly halved the rate at which new VTHO enters circulation. The upgrade also formalized the StarGate platform, where users can delegate VET to validators, with over 10 billion VET staked within three months of launch.
What this means: This is bullish for VTHO because it directly links new supply to useful network activity (staking), reducing inflationary pressure. It creates a more sustainable and decentralized ecosystem where participants are rewarded for contributing to security.
(Bullish)
3. Galactica Gas Fee Market & Burns (July 2025)
Overview: This hard fork implemented a new transaction fee system inspired by Ethereum's EIP-1559. It split fees into a base fee that is permanently burned and a priority tip for validators.
Every transaction now permanently destroys a portion of the VTHO used to pay its base fee. This creates a built-in deflationary mechanism: as network activity increases, more VTHO is burned, counteracting new issuance from staking. The upgrade also improved smart contract capabilities and Ethereum Virtual Machine (EVM) compatibility.
What this means: This is bullish for VTHO because burning fees reduces the total supply over time, which can make the remaining tokens more scarce and valuable if demand holds. For users, it leads to more predictable gas fees and a network that becomes more efficient with use.
(CoinW)
Conclusion
VeChain has executed a coherent multi-year upgrade strategy, transitioning to a staking-based, deflationary model that directly benefits long-term VET holders and aims to stabilize VTHO's value for enterprise use. The combined effect of reduced issuance and active burning seeks to create a healthier economic foundation for the token as network adoption grows. How will on-chain transaction growth interact with these new deflationary mechanics in the coming quarters?