Deep Dive
1. Hayabusa Upgrade to DPoS (December 2025)
Overview: This was a major network upgrade that changed how the blockchain reaches consensus and how VTHO is created. It moved the network from its old system to a Delegated Proof-of-Stake (DPoS) model.
The upgrade fundamentally altered VTHO's tokenomics by replacing the passive generation of VTHO (simply by holding VET) with an active, staking-based issuance model. Now, new VTHO is generated based on the total amount of VET staked on the network. This change approximately halved the rate at which new VTHO enters circulation, creating a built-in scarcity mechanism.
What this means: This is bullish for VTHO because it directly ties new supply to active network participation, reducing inflation. For users, it means earning VTHO requires staking VET, which promotes network security and can lead to a more valuable token if demand grows while new supply is constrained.
(Bullish)
2. Galactica EIP-1559 Fee Market (July 2025)
Overview: This protocol upgrade overhauled the network's transaction fee structure. It implemented a dynamic gas fee market similar to Ethereum's EIP-1559 standard.
The key change is that 100% of the base fee for every transaction is now permanently burned (removed from circulation). Validators are incentivized by priority tips for including transactions. This creates a constant, usage-driven burn mechanism for VTHO.
What this means: This is bullish for VTHO because it introduces sustained deflationary pressure. As more people use the VeChainThor blockchain for apps and transactions, more VTHO is destroyed, which could increase its value over time. Users benefit from more predictable transaction fees.
(MEXC News)
3. Increased Staking VTHO Generation (February 2026)
Overview: Following the Hayabusa upgrade, the VeChain team announced that staking VET now generates more VTHO than ever before. This optimizes the rewards for users who actively participate in securing the network.
This update is a refinement of the new staking model, ensuring that delegators and validators are adequately compensated for their role in the DPoS system. It encourages more VET to be staked, which enhances network decentralization and security.
What this means: This is bullish for VTHO because it strengthens the incentive to stake VET, locking up supply and supporting the network. For holders, it means potentially higher rewards for contributing to the ecosystem, making engagement more lucrative.
(VeChain)
Conclusion
VeChainThor's recent codebase evolution strategically shifts VTHO from an inflationary, passively-generated token to a deflationary asset with utility-driven burns and staking-based issuance. This dual mechanism of reduced supply and increased demand through active participation lays a foundation for potential long-term value appreciation. How will on-chain transaction growth interact with these new tokenomics to shape VTHO's scarcity?